Bilateral trade talks with Trump could prove costly for Abe at home
Leaders could begin talks on two-way trade deal, undermining Abe’s promises to Japanese businesses that expanded export opportunities would be created under now-defunct TPP
The leaders of Japan and the US spoke positively of their decision on Friday to set up a dialogue on bilateral trade, but forthcoming negotiations may cost Japanese Prime Minister Shinzo Abe political capital at home.
Stopping short of declaring the start of bilateral free trade agreement negotiations, Abe and US President Donald Trump agreed to establish a “bilateral dialogue framework” helmed by Japanese Deputy Prime Minister Taro Aso – who doubles as finance minister – and US Vice-President Mike Pence.
Under the banner of his “America First” agenda, Trump pulled the US out of the 12-party Trans-Pacific Partnership (TPP) trade agreement shortly after taking office on January 20. With its largest signatory by gross domestic product gone, the TPP cannot come into force under its current terms.
That was galling news to Abe, who expended a great deal of effort to convince key agricultural and industry lobbies to agree to the TPP’s wide-ranging tariff cuts in exchange for the promise of enhanced export opportunities.
“Both Japan and the United States have a great chance to expand free trade and investment in the Asia-Pacific region, which is achieving ever more rapid growth,” Abe said at Friday’s press conference. “But that must be done in a fair manner.”
