Home GRASP GRASP/Japan Japan Caved to Trump on Trade Talks. Now the Real Haggling Begins.

Japan Caved to Trump on Trade Talks. Now the Real Haggling Begins.

225
0
SHARE

Tokyo could offer minor concessions to give Washington a face-saving deal, but already the U. S. is signaling a tough stance on autos and agriculture.
TOKYO — When Shinzo Abe sat down for a three-hour dinner with President Trump at Trump Tower in New York in September, the pair celebrated the Japanese prime minister’s 64th birthday.
By the end of that week, it looked like Mr. Abe was the one who had given Mr. Trump a gift.
Japan acquiesced to direct, two-way trade talks with the United States, dropping its two-year insistence on trying instead to hammer out a pact that included multiple countries. It gave crucial momentum to Mr. Trump’s campaign to redraw trade pacts with longstanding allies like Japan, Canada, Mexico and the European Union, even as he widens a trade war with China.
Japan won some prizes with the move, like forestalling threatened American auto tariffs. Still, holding on to those gains could be tough. The Trump administration has already indicated it may want more from Japan on autos and agriculture. And it has shown it won’t hesitate to turn up the heat when dealing with traditional allies, as it did when it demanded that Canada open its market to American dairy products.
The negotiations will be particularly delicate for Mr. Abe, who has spent a considerable amount of energy developing a personal relationship with Mr. Trump.
Japan has options. It could try to avoid substantive concessions simply by using patience as a bargaining tool. Even as it goes forward with negotiations, it can take some comfort in the fact that, rhetoric aside, the new pacts Mr. Trump has struck with South Korea, Canada and Mexico are not dramatically different from previous deals.
“I think the strategy of the Japanese government is to give them something which doesn’t really hurt Japanese interests, but is something that the U. S. president can say was a big concession,” said Takuji Okubo, managing director and chief economist at Japan Macro Advisors in Tokyo.
Mr. Trump noted Japan’s apparent capitulation in remarks to reporters in New York last month.
Entering bilateral talks “was something that, for various reasons over the years, Japan was unwilling to do,” Mr. Trump said. “And now they are willing to do so.”
In an interview in Tokyo last week, William F. Hagerty, the United States ambassador to Japan, said Japanese officials had not fully grasped political realities in the United States when they pressed for regional talks.
Japan had championed a return to the Trans-Pacific Partnership, the 12-nation pact that Mr. Trump killed during his first week in office. That move, Mr. Hagerty argued, had its roots in the 2016 election and crossed party lines.
“The way it was being portrayed was that it was some sort of unilateral action on behalf of President Trump that took place the first week of him being in office,” said Mr. Hagerty. “I think they thought that we could come back to it.”
“My job has been to convey that political reality,” Mr.

Continue reading...