US, Japan focus on trade to boost both economies

For the last two decades, Japan's stagnant economy has taken a back seat to China's explosive growth. But the economic agenda for the United States and Japan is heating up, presenting new opportunities for the US and trade frictions reminiscent of the 1980s.

In White House discussions on Friday, US President Barack Obama and Japanese Prime Minister Shinzo Abe took up a range of security concerns. But their minds were largely focused on one thing: getting their economies growing more rapidly.

Obama would like to see Japan join the US, Canada, Mexico, Australia and seven other countries in negotiations for an Asia-Pacific free-trade agreement. The administration sees the pact as a vital part of its "pivot to Asia" to secure US strength in an increasingly wealthy region of the world, where China's influence has grown.

But the US car sector and Japanese farmers, important constituents for Obama and Abe, have balked at Japan entering talks that could expose their industries to greater foreign competition.

On Friday, the US and Japan issued a carefully worded statement suggesting that although all goods would be on the table in the trade talks should Japan join, there could still be a deal in which each side protected its most sensitive sectors.

"The two governments confirm that, as the final outcome will be determined during the negotiations, it is not required to make a prior commitment to unilaterally eliminate all tariffs upon joining the TPP negotiations," the statement said, referring to the Trans-Pacific Partnership.