Abe’s Trump Trade Pitch

Japan’s PM needs a reform victory that the U.S. can provide.

 
 

Japanese Prime Minister Shinzo Abe hands with President Donald Trump during their meeting at the White House, February 10, 2017.
Japanese Prime Minister Shinzo Abe hands with President Donald Trump during their meeting at the White House, February 10, 2017. PHOTO:CHIP SOMODEVILLA/PRESS POOL
 

Shinzo Abe is heading to Mar-a-Lago for a two-day “working summit” with Donald Trump, and officially the top issue is North Korea. Japan’s Prime Minister wants reassurance that the U.S. won’t let Kim Jong Un wriggle out of sanctions with more empty promises of denuclearization. Mr. Abe will also try to convince Mr. Trump to follow through on his recent order to explore rejoining the Trans-Pacific Partnership trade pact. The chances of success may be slim, but Mr. Trump can solve several problems by following his ally’s lead.

Since he pulled the U.S. out of TPP last year, Mr. Trump has pushed Japan to conclude a bilateral trade agreement including similar market-opening measures, especially lower tariffs for American beef and farm products. But Mr. Abe has resisted. Instead he took up the leadership of the remaining 11 nations, which signed a new treaty in Chile last month.

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That led to a cooling in U.S.-Japan relations. After Mr. Trump imposed tariffs on steel and aluminum last month, he granted exemptions to such U.S. allies as Germany, Canada and South Korea. Japan was not on the list. If U.S. officials thought this cold shoulder would force Mr. Abe to the negotiating table, it seems instead to have reinforced resistance in the Japanese government and public.

Mr. Abe’s political weakness at home has also made it impossible for him to make concessions on the bilateral agreement, even if he wants to. Two long-running favoritism scandals have re-erupted and hurt his approval rating. That will embolden rivals to challenge Mr. Abe in the ruling Liberal Democratic Party leadership election in September, and he could use a political victory. 

But the most important reason Mr. Abe wants to change Mr. Trump’s mind on TPP is the Prime Minister’s commitment to opening Japan to foreign competition. After initially resisting TPP, Mr. Abe embraced it as the centerpiece of his reform program to end Japan’s nearly three decades of deflation and economic stagnation.

TPP is a battering ram to overcome resistance from Japan’s protectionist farm lobby. The breakthrough required the assistance of Japan’s largest companies, which want the new markets and simpler trading across their supply chains promised by TPP. Ratifying the pact in Japan’s Parliament won’t be easy without U.S. participation, but as long as there is hope of Washington returning, the political support should hold.

Will Mr. Trump at least agree to pursue TPP talks? He tweeted last week, “Would only join TPP if the deal were substantially better than the deal offered to Pres. Obama. ” The other 11 nations are reluctant to make further concessions to the U.S., and time is running out as the ratification process is getting underway. But as with all trade deals, deadlines can be stretched and face-saving compromises found if there’s a chance of getting to yes.

Mr. Trump still seems convinced that Japan is cheating on trade, and that is Mr. Abe’s biggest hurdle. But he can make a strong case that TPP is a tool to tackle the trade abuses and imbalances that the President rails against. At a stroke it would also create a “coalition of the willing” to prod China into better behavior without ceding U.S. trade leadership. Mr. Abe was one of the first world leaders to bet on building a relationship with Mr. Trump, who now has a chance to repay him for it.

Appeared in the April 17, 2018, print edition.

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