Japan Abe Agrees With Trump On Need for Fair APAC Trade Rules

     TOKYO (MNI) - Japanese Prime Minister Shinzo Abe said Monday he and

visiting U.S. President Donald Trump agreed that "fair and feasible" trade and

investment rules must be established for the Asia-Pacific Region.

     In a joint news conference with Trump, Abe also said the two leaders

confirmed that key bilateral economic issues were being discussed in high-level

dialogue chaired by their top deputies.

     Abe argued that Japan is the largest investor in the U.S. in terms of

creating jobs. He said Japanese firms have generated 17,000 jobs in the U.S.

since Trump took office.

     Earlier Monday, Trump said  unfair trade practices were hindering sales of

U.S.-made automobiles in Japan, and that he would resolve the issues through

bilateral free trade talks.

     However, Japanese officials are wary of opening bilateral free trade talks,

because they expect the U.S. will demand that Japan open up more drastically its

politically-sensitive agricultural sector to imports.

     Deputy Prime Minister Taro Aso has said in parliamentary hearings that

Trump, who has blamed Japan's trade policy for hurting U.S. growth, needed to

update his memory of bilateral trade ties, which he said was stuck in the 1980s.

Since then, he says, Japanese manufacturers have set up many factories in the

U.S. and hired tens of thousands of local workers, particularly in the

automotive sector.

     In April, Aso and Vice President Mike Pence, co-chairs of the new bilateral

trade dialogue, agreed to set three policy pillars: a common strategy on trade

and investment rules and issues; cooperation in economic and structural

policies; and cooperation in certain commercial and industrial sectors.

     In January, Trump also made what the Japanese see as an ill-informed

allegation about the Japanese auto industry, accusing Japan of "do[ing] things

to us that make it impossible to sell cars in Japan."

     Japan imposes no tariffs on imported cars while the U.S. levies a 2.5%

tariff on cars, government officials have noted.

     Still, foreign-made cars have only a 7% share in the Japanese market but

they remain popular, with German models Mercedes-Benz, Volkswagen and BMW

topping the list.

     Compared to largely similar models among Japanese-made vehicles, European

brands offer various styles and functions to meet a diverse taste of the

Japanese consumers while the variety of American-made cars available in Japan is

limited.

     Auto critics in also point out that mini-vehicles with small engines up to

660 cc displacement are extremely popular in Japan because of lower ownership

taxes and their ability to navigate through tight roads. Americans have argued

that this category of vehicles is unfair because it would not be economical for

foreign manufacturers to produce those cars that could only be fit in the

Japanese market.

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com

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