Finance Minister Taro Aso said on Friday that Japan must avoid entering a free trade agreement (FTA) with the United States to rectify trade imbalances.
Fears of a trade war have mounted this month as US President Donald Trump’s administration imposed tariffs on steel and aluminium imports and unveiled plans to slap tariffs on up to $60 billion of imports from China.
Japan and the United States are at loggerheads on how to frame future trade talks, with Tokyo resisting US calls to enter negotiations for a bilateral FTA that could force Japan to open its highly protected agricultural markets.
Aso, who leads Tokyo’s delegation for US-Japan economic dialogue, said Japan supports the global trend of promoting multilateral trade frameworks.
The recent signing of the Trans-Pacific Partnership free trade deal was a significant development even without the participation of the United States, Aso told reporters after a cabinet meeting.
“We want to avoid falling into a bilateral deal” with the United States in exchange for exemptions from steel and aluminium tariffs, Aso said.
Japan has been pushing for exemptions from US tariffs on steel and aluminium imports, with little success.
According to Reuters, Japan believes that US trade deficits should be tackled by global trade partners as a whole, not just by bilateral framework, Aso said.
The United States has agreed with South Korea to revise their trade pact with a side deal to deter competitive currency devaluation by Seoul and with concessions for US autos and pharmaceutical companies.
Some analysts say the agreement could set precedence for US trade deals with other countries, which would be a headache for Japanese policymakers keen to avoid bilateral FTA talks and a spike in the yen.
