Trump, Abe announce start of trade negotiations

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US President Donald Trump and Japan's Prime Minister Shinzo Abe announced an agreement to start negotiations on a trade deal on Wednesday, dampening the prospect of Washington imposing tariffs against another trading partner.

After talks in New York on the sidelines of the United Nations General Assembly (UNGA), the two leaders issued a joint statement about talks to produce "early" results, without giving any firm details on a timetable.

Although the two leaders enjoy warm ties, Trump has frequently grumbled about a "very high deficit" with Japan, the world's third-largest economy, and has already shown a willingness to impose tariffs on allies such as Canada and the European Union.

"The United States and Japan will enter into negotiations, following the completion of necessary domestic procedures, for a United States-Japan Trade Agreement on goods, as well as on other key areas including services, that can produce early achievements," said the statement issued by the White House.

"The president reiterated the importance of reciprocal trade, as well as reducing the trade deficit with Japan and other countries. The prime minister emphasized the importance of free, fair, and rules-based trade," said the statement.

"Against this backdrop, we reaffirmed our determination to further expand trade and investment between the United States and Japan in a mutually beneficial manner, including through further concrete steps, as well as to realize free, fair and open development of the global economy."

Trump's administration activated tariffs on 200 billion US dollars worth of Chinese goods earlier this week while speculation has been growing that Tokyo could be next on his target list.

On June 1, Trump imposed tariffs of 25 percent on steel and 10 percent on aluminum from the European Union, Canada and Mexico.

In recent comments to The Wall Street Journal, Trump stressed his good relations with the Japanese, before adding menacingly: "Of course, that will end as soon as I tell them how much they have to pay."

Last year's deficit in goods traded with Japan was 68.8 billion US dollars, third behind China (375 billion US dollars) and Mexico (71 billion US dollars), and less than a tenth of the total US deficit with the rest of the world (796 billion US dollars).

The deficit amounted to 40 billion US dollars in the first eight months of this year, according to official US statistics.

Vehicle and parts exports from the auto sector account for 80 percent of the imbalance. While Japanese cars are among the most popular in the United States, few American cars are on the roads in Japan, whose motorists usually prefer small, fuel-efficient cars.

Abe, addressing the UN General Assembly on Tuesday, said that Japan supported 856,000 jobs in the United States – more than any country except Britain.

Source(s): AFP