Given the increasing importance of the Indo-Pacific region, Japan, with the number three economy in the world and strategically located near China, North Korea and Russia is, to the United States, the “indispensable country.”
Friday’s visit (followed by golf on Saturday) commences a crucial period for US-Japan relations. Over the coming months, both sides are going to be making decisions that will either strengthen or weaken this important alliance.
The first involves North Korea. Other than South Korea, no country faces a greater threat from Kim Jong Un’s rogue state than Japan — a fact reinforced in 2017, when North Korea twice fired missiles over the Japanese mainland.
While Japan would welcome an agreement to denuclearize North Korea, there is a concern in Tokyo that Washington will cut a deal to eliminate Kim’s long-range missiles capable of reaching the US mainland, while ignoring the shorter-range ones that threaten Japan. Japan also would like the US to continue to exert pressure on North Korea to fully account for “abductees,” Japanese citizens who were kidnapped by North Korea in the 1970s and 1980s.
First, President Trump’s “America First” rhetoric has caused allies, including Japan, to question the reliability of the US as a partner. The administration, for its part, has explicitly reaffirmed the US commitment to defend Japan.
Of course, this lesson is not limited to friends of the US. A united US-Japan approach to North Korea will also place more pressure on Kim Jong Un and his main benefactor, China. At the same time, it is important to ensure that engagement with the North Korea does not emerge as a wedge issue between Japan and South Korea.
A less serious but perhaps more immediate issue to be discussed on Friday involves the US-Japan economic relationship. Last fall, the US and Japan agreed to begin negotiating a bilateral free-trade agreement. The two nations’ economies are closely linked. The US is the second-most popular destination for Japanese exports, while Japan provides a major market for US exports, including agricultural products.
Still, the US runs a persistent trade deficit with Japan. Although Japan trails only the UK in the amount of money it invests in the US (and much of that is used to create manufacturing jobs), the trade deficit has provoked Trump to take a hard line with Japan on trade; it likely played a role Trump’s decision to withdraw the US from the Trans-Pacific Partnership.
The major cause for the trade deficit between US and Japan is the tremendous imbalance between the import of automobiles between the two nations. Japan is not the only country to run an automobile trade surplus with the US, and the Trump administration has been investigating whether to apply tariffs of up to 25% on imported automobiles. Just as with Trump’s steel and aluminum tariffs, which also apply to Japanese exports, the administration is relying on section 232 of the Trade Act of 1962, a provision that allows presidents to use a national security justification to limit imports.
The meeting will come at an odd time, in tariff deliberations. Section 232 requires an investigation by the Commerce Department, which was completed and which Trump received in February. He’s now on a 90-day clock to decide whether to put those tariffs in place. Friday will be the final scheduled meeting between Trump and Abe before that time is up.
Perhaps the administration will figure out a way to finesse or delay the 90-day deadline. If so, the terms of a potential agreement are obvious: no auto tariffs in return for Japan lowering its agricultural tariffs to levels consistent with those offered to its partners in the arrangement that replaced TPP — a deal that might be difficult for Japan to accept.
There are few good alternatives. If the US imposes tariffs on auto imports, it will hurt Japan’s economy. It might also lead Japan to retaliate, which would harm a US economy already suffering from a trade war with China. The most serious damage, however, would be to the US-Japan relationship, at a time when that relationship is critical to the economic and foreign policy goals of both countries.
Hopefully, Trump and Abe can avoid that result.
Source : Nbcnewyork
