Japan’s Abe to Make Trade Case to Trump in New York Meeting

(Bloomberg) -- Japanese Prime Minister Shinzo Abe will make the case for free trade and seek to build trust with Donald Trump when he meets the U.S. President-elect later this week in New York.

During his election campaign, Trump vowed to drop the Trans-Pacific Partnership, a regional trade pact that covers 12 countries that make up 40 percent of the global economy, saying its enactment would be "catastrophic." The pact is currently under discussion in Japan's parliament, with Abe's government hoping to ratify it in the current session that ends this month.

In remarks to parliament Monday, Abe said he would convey his thoughts on free trade in the meeting being arranged for Thursday, adding that it was "unfortunate" that protectionism was on the rise in the U.S. While the Japanese leader acknowledged that it would be "extremely difficult" for the TPP to come into effect, he said the deal was far from finished and it remained important for Japan to show willingness to move forward.

Trump's administration will “reverse decades of policies that have pushed jobs out of our country," according to his website. A lawmaker in Japan's parliament on Monday mentioned the possibility of a TPP that doesn't include the U.S., citing reports that Mexico's Economy Minister Ildefonso Guajardo said such a scenario should be considered. Peruvian President Pedro Pablo Kuczynski also made similar comments over the weekend.

The pact is a prominent part of Abe's structural reform agenda, and was intended to help him open up protected sectors of the economy such as agriculture. Bank of Japan Governor Haruhiko Kuroda said Monday that enactment of the TPP would be "groundbreaking" and a positive for the Japanese economy.

"Trump said he opposed it when he was the presidential candidate. and while I don't know what policy actions the new administration will take, if we can't finalize the TPP, we could lose what should have been a huge plus," Kuroda told reporters in Nagoya. "You could say that that would be a negative."

In the talks set for Thursday, Abe will likely become the first major world leader to meet Trump since his election. While trade will be a central issue of their talks, Abe will also seek to clarify Trump's position on a number of issues affecting Japan.

During his campaign, Trump alarmed many by threatening to withdraw U.S. troops from Japan and South Korea, and saying they might have to develop their own nuclear arsenals.

"The U.S.-Japan alliance is the foundation of our security and our economy, so I want to have candid talks and build a relationship of trust," Abe said Monday. The meeting in New York was arranged during a phone call between the two last week, which Abe described as "frank and relaxed."

Abe also said there is no way Japan would ever own nuclear weapons, citing his nation's three non-nuclear principles of not possessing, producing or permitting their introduction.

Stationing Cost

Trump has accused Japan and South Korea of failing to pay enough for the services of the U.S. military stationed in the two countries -- this is despite Japan's budgeted payment of about 377 billion yen ($3.5 billion) this year alone. Japan's own military is restricted by a pacifist constitution drafted by the U.S. after World War II.

On a visit to Tokyo last month, Trump security adviser Michael Flynn said Japan and the U.S. should discuss the cost-sharing arrangement for U.S. troops in Japan. Defense Minister Tomomi Inada said last week that the country makes sufficient contributions to the upkeep of U.S. forces in Japan.

--With assistance from Toru Fujioka and Masahiro Hidaka To contact the reporters on this story: Isabel Reynolds in Tokyo at ireynolds1@bloomberg.net, Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net. To contact the editors responsible for this story: Daniel Ten Kate at dtenkate@bloomberg.net, Andy Sharp, Sam Kim