August 1, 2018 / 5:31 AM / in 21 days

Japan's deputy chief cabinet secretary says US trade talks not a prelude to FTA

TOKYO (Reuters) - Talks next week between Japanese Economy Minister Toshimitsu Motegi and U.S. Trade Representative Robert Lighthizer are not a prelude to a two-way free trade agreement (FTA), Japanese Deputy Chief Cabinet Secretary Yasutoshi Nishimura said on Wednesday.

Nishimura also told Reuters in an interview that Japan did not intend to set numerical targets on either exports or imports.

The Aug. 9 talks in Washington come as U.S. President Donald Trump’s administration explores raising tariffs on foreign auto imports, including those from Japan, a step that officials say would do serious damage to the two economies and world trade.

The United States is a major market for Japan’s automakers, which produced 3.8 million vehicles at their U.S. plants in 2017, roughly one-third of the 12 million total units produced in the country each year.

An additional 1.7 million vehicles were exported from Japan last year.

Trump wants a two-way trade pact as a way to reduce America’s trade deficit with Japan but Tokyo is wary of FTA talks because they would increase pressure to open sensitive markets such as agriculture.

“Japan does not desire an FTA and these talks are not at all preliminary discussions on an FTA,” Nishimura said.

Nishimura reiterated that Japan would keep trying to persuade Washington to return to a multilateral Trans-Pacific Partnership pact abandoned by Trump soon after he took office last year. However, he acknowledged that Washington’s preference was for bilateral deals.

“We will be looking for the best path for both the United States and Japan,” Nishimura said.

He repeated that Japan was expected to increase imports of liquefied natural gas from America and buy U.S. military gear needed for its defence. Japanese firms want to invest in the robust U.S. market and Japan wants to support that, he said.

However, Nishimura ruled out setting a numerical limit on Japanese auto exports to the United States, a tactic taken during trade wars in the 1980s and early 1990s, before the 1995 launch of the World Trade Organization, which generally bans such steps.

“Whether it’s exports or imports, we will not set numerical targets,” Nishimura said. “The fundamental thing is to maintain free and fair trade.”

Nishimura declined to say what steps Japan would take if Washington raised its tariffs on auto imports.

“Raising tariffs on autos would have a big impact on the world economy and would be a big minus for the American economy, so we want to talk firmly so that does no happen,” he said.

Additional reporting by Yoshifumi Takemoto; Writing by Linda Sieg; Editing by Paul Tait

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