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Japan-U.S. dialogue to cover trade, possibly bilateral FTA

High-level economic dialogue that Japanese Prime Minister Shinzo
Abe and U.S. President Donald Trump agreed Friday to launch will
cover trade, macroeconomic policy, as well as infrastructure and
energy projects, Japanese officials said.

Trump did not call for talks on a Japan-U.S. free trade
agreement during a meeting with Abe, but the possibility of exploring
a bilateral FTA will not be ruled out and it will be handled by the
new dialogue to be headed by Japanese Deputy Prime Minister Taro Aso
and U.S. Vice President Mike Pence, according to the officials.

Trump withdrew the United States from the 12-nation
Trans-Pacific Partnership trade deal last month, saying he prefers
bilateral trade deals to multilateral ones like the TPP, which he
called a job-killing "disaster."

Currency issues will not be covered in the ministerial dialogue
as it will be handled by the finance ministers of the two countries,
according to a Japanese Finance Ministry source.

During Friday's summit at the White House, Abe pitched Japan's
advanced technology for use in promoting infrastructure projects in
the United States, citing maglev technology for a high-speed railway
system, a senior Japanese official said.

Abe said a maglev train could link New York and Washington in an
hour, and Trump expressed significant interest, the official said.

The two governments have yet to decide details of the dialogue
such as its specific contents and composition because the Trump
administration was launched just three weeks ago.

The timing of the first meeting was also not immediately known,
except that Abe and Trump agreed to arrange "an early visit" by Pence
to Tokyo.

Trump did not criticize Japan over its monetary and economic
policies during the summit, or its sizable trade surplus with the
United States, according to the Japanese official.

Trump also did not raise currency issues or attack Japan's
automobile trade, the official told reporters.

In recent weeks, Trump has accused Japan of devaluing the yen to
gain unfair trade advantage. He has also slammed Japan's auto trade
practices as "not fair" to U.S. carmakers.

Citing a joint statement issued after the summit, the Finance
Ministry source said the two sides affirmed Japan's policy of
monetary easing as a means to beating chronic deflation, meaning that
Trump has given a tacit nod to the Bank of Japan's efforts that have
led to the weakening of the yen against the U.S. dollar.

The two leaders "reaffirmed their commitments to using the
three-pronged approach of mutually-reinforcing fiscal, monetary and
structural policies to strengthen domestic and global economic
demand," the statement said.

Trump did not demand Japan shoulder more of the cost of
stationing U.S. forces in the country, according to the Japanese
official.

During the presidential campaign, Trump repeatedly pressed Japan
and other U.S. allies to increase their host nation support for U.S.
troops -- or else defend themselves. (Feb. 11)