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Despite his rejection of the North American Free Trade Agreement (which Japan supports), US president Donald Trump has hosted a visit by Japanese prime minister Shinzo Abe, where the two leaders committed to economic dialogue and stronger military ties. Timothy Conley reports.

Japanese prime minister Shinzo Abe’s February summit with US president Donald Trump reaffirmed many of the foundational principles associated with the Japanese-US alliance, including trade and security co-operation. 

Besides indulging in golf (and notably awkward handshakes), Mr Trump and Mr Abe agreed on the creation of a new US-Japan ‘economic dialogue’ and expressed their intentions to strengthen the US-Japan military alliance. 

As a presidential candidate, Mr Trump argued for the elimination of multilateral trade agreements, which he says are unfair to US manufacturers. In his first week as president, Mr Trump called for renegotiations on the North American Free Trade Agreement (Nafta) and the creation of a border tax against Mexican imports.

Mr Trump’s ‘America First’ platform has already affected the investment plans of suppliers and manufacturers worldwide, including Japanese automakers. Most notably on January 24, Toyota announced a $600m investment in an assembly plant in Indiana, which would result in the creation of 400 additional US jobs.

Mr Trump steered away from any direct criticism of Japan’s auto industry in his February meeting with Mr Abe. However on March 8, the Trump administration submitted a statement to the World Trade Organization headquarters in Geneva that urged Japan to “remove non-tariff barriers that impede US manufacturers’ ability to compete on a level playing field with their Japanese competitors, both in the area of automobiles and beyond”, according to the US State Department. 

Besides Nafta, in his first week as president Mr Trump withdrew US participation from the Trans-Pacific Partnership (TPP), a multilateral trade deal backed by Mr Abe. In their joint press conference on 10 February, Mr Abe acknowledged Mr Trump’s decision to leave the TPP, yet remained fully confident that the US and Japan would continue to establish “a free and fair market based on rules” throughout the Asia-Pacific. 

In terms of their post-TPP plans, Mr Abe and Mr Trump agreed to establish an “economic dialogue” that would allow both countries to discuss mutual economic interests, such as trade regulations and investment standards, in a non-compulsive manner, according to a joint statement signed by both leaders. This dialogue has the potential to expand into more comprehensive bilateral deal, but for the moment, it will allow for increased communication between both countries. 

“If TPP is not the answer and Nafta is going to be renegotiated, [then] the prime minister and corporate leaders in Japan want to get a better understanding of just how far the new administration wants to disrupt this value chain,” says Sheila Smith, a senior fellow at the US Council for Foreign Relations.  

Mr Trump also reaffirmed the US’s defence commitment to Japan, telling a joint press conference: “This administration is committed to bringing these ties even closer.” Mr Trump’s words were tested later at his Mar-A-Lago estate in Florida, as both US and Japanese policymakers reacted to reports of a North Korean missile launch. 

On his return to Japan, Mr Abe declared at an upper house legislative meeting on February 16 that he intended to purchase US defence technology. “I believe that buying US defence equipment will contribute to the US economy and job creation,” he said, according to Tokyo-based daily newspaper Ashai Shimbun.

After repeatedly criticising Japan as a candidate, Mr Trump backed the essentials of the US-Japan alliance during his meeting with Mr Abe. “The two nations confirmed the relationship as the cornerstone of peace in the Pacific – effectively, an impenetrable US-Japan military industrial complex,” says Marie Thorsten, a visiting scholar at the London School of Economics.

This article is sourced from fDi Magazine
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