Japan and U.S. hold 'frank and good' trade talks: economy minister

WASHINGTON (Reuters) - Japan’s economy minister said he had “frank and good” trade talks with his U.S. counterpart on Monday, but stressed that currency rates should be discussed in a different context, between finance ministers.

FILE PHOTO: 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/File Photo

The meeting comes after U.S. President Donald Trump and Prime Minister Shinzo Abe agreed last September to start trade talks in an arrangement that protects Japanese automakers from further tariffs while talks are underway.

Trump has made clear he is unhappy with Japan’s $68 billion trade surplus with the United States - much of it from auto exports - and wants a two-way agreement to address it.

Economy Minister Toshimitsu Motegi told reporters that most of the three-hour meeting with U.S. Trade Representative Robert Lighthizer was centered on goods.

Abe has stressed that the new framework would be a Trade Agreement on Goods, or TAG, not a more wide-ranging free trade agreement that included investments and services that Japan had resisted.

U.S. Treasury Secretary Steven Mnuchin said over the weekend he sees good cooperation with Japan on exchange rates, looking to include a currency provision in any trade agreement to avoid currency manipulation.

When asked about exchange rates, Motegi said on Monday that Japan and the United States have already agreed that currencies should be discussed between respective finance ministers.

Motegi also said he confirmed with Lighthizer that new trade talks would proceed based on the two nations’ joint statement issued last September. It said talks “will respect positions of the other government,” drawing lines on autos and Japan’s agriculture sector.

“We had a frank and very good exchange of views on trade issues,” Motegi told reporters. He declined to be more specific, but said he would explain the contents of their talks after the second day of talks on Tuesday.

A spokeswoman for U.S. Trade Representative declined to comment.

“The U.S. probably doesn’t want to spend much time on trade talks with Japan and wants an early achievement,” said Junichi Sugawara, senior research officer at Mizuho Research Institute.

“The focus will be how Japan and the U.S. will find a common ground as Japan doesn’t want to compromise on farm products and can’t accept auto export restriction.”

Abe is scheduled to meet Trump in the U.S. in late April for talks on North Korea and Japan-U.S. trade.

Reporting by David Lawder in Washington, writing by Kaori Kaneko in Tokyo; Editing by Malcolm Foster & Kim Coghill