The United States and Japan announced Wednesday they will open negotiations on a bilateral trade agreement between the world’s first- and third-largest economies.
It’s a significant shift by Tokyo which has been a strong advocate of a multi-nation trans-Pacific trade pact that President Donald Trump withdrew from soon after taking office.
Trump made the announcement after meeting with Japanese Prime Minister Shinzo Abe in New York on the sidelines of the U.N. General Assembly.
He said that Japan had been unwilling in the past to enter into such talks, but now is and such a deal “will be something very exciting.”
Abe has cultivated close ties with Trump since after his 2016 election but trade relations have been difficult, since the Republican president withdrew from the 12-nation Trans-Pacific Trade Pact that had been negotiated by the Obama administration and championed by Abe despite considerable domestic political opposition in Japan.
The Trump administration, pushing to narrow the U.S. trade imbalance with Japan, has since imposed steel and aluminum tariffs on its ally. The U.S. has also been threatening to impose higher tariffs on auto imports that would have escalated trade tensions significantly.
It was not immediately clear if Japan won relief, but a U.S.-Japan joint statement released by the White House said, “we will make efforts for the early solution of other tariff-related issues.”
“We’ve agreed today to start trade negotiations between the United States and Japan,” Trump told reporters, alongside Abe.
“This was something that for various reasons over the years Japan was unwilling to do. And now they are willing to do. So we’re very happy about that. And I’m sure they will come to a satisfactory conclusion,” he said.
Abe said that Japanese Economy Minister Toshimitsu Motegi and U.S. Trade Representative Robert Lighthizer had held very productive discussions in New York this week. Abe said he wanted to find “ways to reinforce the economic ties between Japan and United States.”
The joint statement issued said negotiations will begin after completion of necessary domestic procedures in each country.
Lighthizer told reporters that he would be talking to Congress on Thursday about seeking trade promotion authority for the president to negotiate the agreement.
The statement said the proposed agreement will cover goods, and other key areas including services, that can produce “early achievements.” The U.S. and Japan would then negotiate on other trade and investment items.
Source: The Associated Press