March 29, 2018 / 3:08 AM / 8 months ago

Japan's Aso rules out bilateral trade deal with U.S.

TOKYO (Reuters) - Japanese Deputy Prime Minister Taro Aso on Thursday ruled out the chance of opening up talks for a bilateral trade deal with the United States, stressing that such a deal would do no good to his country.

Japan's Finance Minister Taro Aso attends an upper house parliamentary session in Tokyo, Japan March 19, 2018. REUTERS/Issei Kato

Aso, who heads Tokyo’s delegation for a two-way dialogue with the United States on broad economic matters, said Japan should not be drawn into talks for a bilateral free trade agreement (FTA) in exchange for exemptions from steel and aluminum tariffs.

“When two countries negotiate, the stronger country gets stronger” and would only create “unnecessary” pain for Japan, Aso told parliament.

“We’ve been saying all along that we would definitely avoid” bilateral trade deals with the United States, said Aso, who is also finance minister.

Aso’s comments came after the United States agreed with South Korea to revise their trade pact with a side deal to deter competitive currency devaluation by Seoul and with concessions for U.S. autos and pharmaceutical companies.

Some analysts say the agreement could set precedence for U.S. trade deals with other countries, which would be a headache for Japanese policymakers keen to avoid bilateral FTA talks and any unwelcome yen spike.

Japan and the United States remain at logger-heads on how to frame future trade talks, with Tokyo pushing back against U.S. calls to enter negotiations for a bilateral FTA that could force Japan to open up its highly protected agricultural markets.

Fears of a trade war mounted this month after Trump imposed tariffs on steel and aluminum imports, and then on Thursday specifically targeted China by announcing plans for tariffs on up to $60 billion of Chinese goods.

Japan has been pushing for exemptions from U.S. tariffs on steel and aluminum imports, with little success.

“Japan only exports special steel products in which it has outstanding market share and U.S. companies cannot produce,” Aso said. “If U.S. companies want these products, they need to buy them from Japan. It will be U.S. companies that suffer.”

Reporting by Leika Kihara; Editing by Chris Gallagher and Sam Holmes

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