[CTC] Trade on agenda for Trump-Abe talks; currency manipulation not seen as a focus

[Arthur Stamoulis]

INSIDE US TRADE
 
Trade on agenda for Trump-Abe talks; currency manipulation not seen as a focus
February 09, 2017 

President Trump and Japanese Prime Minister Shinzo Abe will discuss trade and the U.S.-Japan bilateral economic relationship during a working lunch at the White House on Friday, a senior administration official told reporters on Feb. 9. That official also said currency manipulation is not a top agenda item for Trump, despite his recent rhetoric on the issue.

The working lunch will be held following a meeting in the Oval Office between the two leaders where their discussion is likely to touch on a broad range of issues, including the bilateral economic relationship, the official said. Following that, Trump and Abe will “delve more deeply into the economic piece of the relationship” during a lunch that will feature a “slightly larger group” of government officials.

“And so I think that they'll have pretty in-depth discussions about the overall relationship as well as reaffirming the interest in seeing a free and rules-based trading order in the region,” the official said. He declined to delve into specific deliverables that are expected from the meeting.

On Feb. 10, before heading to the White House, Abe will attend meetings at the U.S. Chamber of Commerce, according to a schedule from the Japanese Embassy. Trump and Abe depart Friday for Trump's Mar-a-Lago property in Florida and spend Saturday there, where the official said the two will golf and “relax.”

When asked if discussion of a bilateral free trade agreement is on the agenda, the official, demurred and reiterated the Trump administration's preference for bilateral deals over multi-country deals, arguing that bilateral arrangements allow for terms to be negotiated that are more favorable for the U.S., but mulitlateral deals result in standards at the lowest common denominator.

“So I’m not going to get ahead of discussions tomorrow to see where discussions go,” the official said. “But I think that this is a first, it’s really a first summit since they’ve come into office, so they’re going to be talking on a pretty wide range of subjects and certainly touching on possible paths forward with relation to the overall economic relationship.”

The official also noted that, “Abe is well acquainted with president Trump's priorities, which you could sum up in three words -- jobs, jobs, jobs -- when it comes to the economic relationship.”

Senate Finance Committee Chairman Orrin Hatch (R-UT) floated the idea of a bilateral deal with Japan shortly after Trump's election, suggesting it as an alternative to the Trans-Pacific Partnership.

Discussions of a U.S-Japan bilateral FTA did not come up during a meeting last week between Trump and the leaders and ranking members of the House Ways & Means and Senate Finance committees, but Hatch told Inside U.S. Trade on Feb. 7 that with Abe coming to meet with Trump it makes sense for the two leaders to discuss a bilateral deal.

Sen. Pat Roberts (R-KS), asked that day whether he would be in favor of a bilateral deal with Japan, said, “of course, except Japan has always signed up with Australia for beef and wheat.”

“I mean TPP would have answered that but it didn't,” he continued. “You can always sell additional product but that's our market, that's what happens when you twiddle your thumbs on trade.”

Roberts has previously said that withdrawing from TPP was “a mistake, especially for agriculture.”

Along those lines, the National Cattlemen’s Beef Association and the National Pork Producers Council sent a letter to Trump on Feb. 7 urging him to initiate trade talks with Japan <https://insidetrade.com/node/157496>, arguing that stronger access to Asian markets is a priority -- especially in the absence of any U.S. participation in TPP.

“Under terms of the Trans-Pacific Partnership (TPP) agreement, Japan’s 38.5 percent tariff on fresh and frozen beef would have been cut to 9 percent over the agreement’s phase-in period and would have given the U.S. beef industry parity with Australia in the Japanese market,” the letter said.

But notably, according to data from the U.S. Meat Export Federation, the U.S. in 2016 shipped 258,653 metric tons of beef to Japan, up 26 percent year-over-year. Export value totaled $1.51 billion, up 18 percent from last year. Chilled beef exports to Japan totaled 112,334 metric tons, up 44 percent from 2015, according to USMEF.

 “Despite facing higher tariff rates in Japan compared to Australian beef, U.S. beef displaced its competition and won back significant market share,” USMEF president and CEO said in a Feb. 8 release.

The U.S. and Japan had negotiated a set of rules governing automobile trade in TPP, and the senior administration official said Trump and Abe were likely to discuss autos over the course of the weekend.

“Automobiles is certainly going to be an important topic of conversation in both directions, because it's such an iconic and critical part of the Japanese economy,” the official said. “It's of high interest to President Trump. And I'm sure that that will come up in discussion.”

Trump's move to withdraw the U.S. from TPP left the region looking for a path forward to liberalize trade. Australian Trade Minister Steven Ciobo has spoken with TPP partners about a means to lock in the benefits of the deal without the U.S. if required, but Japanese and Canadian officials have rejected the notion of TPP sans the U.S. Chile has invited all TPP countries plus China, South Korea, and Colombia to a March 14-15 trade summit <https://insidetrade.com/node/157509> to discuss next steps.

Regarding the prospects of Trump raising the issue of Japan's alleged manipulation of its currency with Abe, the senior administration official said, “I can tell you that’s not something that’s at the top of the list, but whether it comes up naturally in conversation, we’ll see over the course of that meeting.”

Trump slammed Japan for allegedly manipulating its currency in remarks at the top of a meeting with pharmaceutical industry executives on Feb. 2.

“Because our country has been run so badly, we know nothing about devaluation,” he said. “You look at Japan. They play the money market, they play the devaluation market, while we sit here like a bunch of dummies.” -- Jack Caporal (jcaporal at iwpnews.com <mailto:jcaporal at iwpnews.com>)
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.citizenstrade.org/pipermail/ctcfield-citizenstrade.org/attachments/20170210/4c6fe27a/attachment.htm>