TOKYO (Reuters) - Japanese Finance Minister Taro Aso said on Tuesday that Japan would not enter a bilateral free trade agreement (FTA) with the United States as a means to resolve the two countries’ trade imbalance.
Speaking to reporters after a cabinet meeting, Aso said it was true that the United States was running a trade deficit but said the situation was different from that of the 1980s, when trade friction strained bilateral relations.
“In the 1980s, Japan accounted for 53 percent of U.S. trade deficits, but the situation is totally different now,” Aso said. He added that his country now accounts for only 9 percent of the U.S. trade deficit, compared with China, which accounts for 47 percent of the deficit.
“We won’t do an FTA to deal with the issue. We agreed we are going to discuss how we should rectify the U.S. trade deficit with Japan through our economic dialogue. There are various ways so we will consider” how to proceed, he said.
Aso’s comments came a day after U.S. President Donald Trump, during his visit to Japan, bemoaned the trade imbalance and called for “free, fair, and reciprocal” trade.
In a second round of economic talks in Washington last month, U.S. Vice President Mike Pence and Aso, who doubles as deputy premier, failed to bridge differences on trade issues.
The two sides are at odds over how to frame future trade talks, with Tokyo pushing back against U.S. calls to discuss a bilateral FTA.
Japan is firmly committed to the Trans-Pacific Partnership (TPP) pact, which Trump announced Washington would abandon soon after he took office. The 11 remaining nations in the TPP are edging closer to sealing a comprehensive free trade pact without the United States.
Reporting by Tetsushi Kajimoto; Editing by Chang-Ran Kim and Sam Holmes