Japan, U.S. agree to accelerate trade talks from July

OSAKA (Reuters) - Japan and the United States agreed on Friday to hold working-level meetings intensively from early next month to accelerate progress towards a two-way trade agreement, Economy Minister Toshimitsu Motegi said.

Japan's Minister of Economic Revitalization Toshimitsu Motegi speaks during the signing agreement ceremony for the Trans-Pacific Partnership (TPP) trade deal, in Santiago, Chile March 8, 2018. REUTERS/Rodrigo Garrido

The agreement between Motegi and U.S. Trade Representative Robert Lighthizer comes after a meeting of the world’s largest and third biggest economies on the sidelines of a G20 summit of world leaders in Osaka, with trade issues high on the agenda.

The two leaders agreed to accelerate trade talks and had agreed the alliance was stronger than ever, a Japanese government official told reporters.

The prospects for a two-way deal raise fears that Japan may cave into pressure from the United States to open up its highly protected agriculture markets, such as beef and rice.

“We share understanding of each other’s thinking and stance and where our gap lies. Based on that, we are discussing ways to narrow our differences,” Motegi told reporters, without elaborating.

The two sides confirmed the outcome of working-level meetings during the last two weeks focusing on agriculture and industrial goods. They did not discuss the timing for conclusion of a deal, Motegi added.

Analysts widely expect the two sides will be unlikely to strike a deal at least until after Japan’s upper house election next month, since farmers are a key pillar of support for Prime Minister Shinzo Abe’s ruling Liberal Democratic Party.

U.S. President Donald Trump has vowed to resolve what he calls unfair trade imbalances with trading partners, under his “America First” protectionism agenda.

To achieve this, Trump has also threatened to slap higher tariffs on car imports, including those from Japan, which he said could threaten the U.S. national security.

China and the United States are locked in a trade dispute and expectations have dimmed that Trump and Chinese President Xi Jinping can ease tension when they meet on Saturday in the western Japanese city.

Reporting by Tetsushi Kajimoto; Editing by William Mallard and Clarence Fernandez