Sputnik discussed the reasons behind Japan's intentions with Dr. Seijiro Takeshita, Dean and Professor of the School of Management and Information at the University of Shizuoka.
Sputnik: What has prompted Japan to consider this step? How much is non-exemption from US-imposed tariffs a factor in this decision?
Dr. Seijiro Takeshita: Usually, in most cases because US and Japan are allies, basically, Japan tends to back off quite a lot of these unreasonable, I say, sanctions, but that said, this time around I think it’s extremely clear not only to Japan but to many other countries including Europe, it shows this quite unreasonable start or kick off of a trade war that could really trigger protectionism around the world, and, obviously, there's really no true logic to the accusations that the Americans are making, and I think Japan had no other choice but to basically appeal to the WTO or else other future negotiations would only worsen.
What the Japanese are expecting is that there will be a bilateral negotiations, there will be a lot of conflict and retaliation that will take place but to get a better bargain they needed to get some back up, and this is why one of the reasons why they went through the WTO to make this move.
Sputnik: You've just said that normally Tokyo would be very hesitant to retaliate but what are the chances that Tokyo in this situation will actually go through with it or is there going to be a lot of back-and-forth negotiating?
Dr. Seijiro Takeshita: I think it will be both. In order to make the negotiations smooth the Japanese, have basically, have gone through a third party to justify their position to make a better negotiation with the United States in the future. That’s probably the only real feasible reason that the Japanese are doing this. In most cases in the past, if you look at the history of trade wars with the United States, Japan tended to back off, but this time around what we're seeing is a clear populism move by President Trump, be it the Paris Accord or be it the lift off of sanctions together with other nations of Iran.
All these issues that President Trump is making is stirring up a trade war in a very unnecessary move without a lot of logic which really defies the unity that we’ve been building up over the years, and it’s not only an economic but it is a political issue as well which is being conducted with, I think very, very bad timing.
Sputnik: Let’s look at a scenario where Tokyo does impose these tariffs, how’s it going to affect the US-Japanese trade relations? Japan is one of the main major US export markets.
Dr. Seijiro Takeshita: Of course, and again at this point, if you look at the kick off of this trade war, if you look at you this accusation about steel and aluminum backed up by security issues it’s very, very strange, because Canada, well Canada is lifted off for the moment along with the EU, but Japan allies of the United States firstly, and secondly, if they're really worried about security of, for example, China’s exposure, the fact is that the steel the Chinese are exporting to the US is on the low-end side which does not really interfere with their security measures.
They're imposing these taxes on their allies, including Japan, and this is obviously a stunt almost by President Trump, and that’s exactly how the Japanese government is feeling. So basically you usually have a one-on-one negotiation, bilateral negotiation, and you try to work these things out, but it is extremely clear that President Trump is pulling this stunt, not only targeted towards Japan or China, but it’s also including Europe as well, as you can see very recently from their move about departing the Iran deal.
So, I think it’s very clear that the Japanese have felt like they have to arm themselves for future negotiations. They have to either appeal to a third-party or even when they go for the negotiations with the United States there will be quite a harsh catch-ball on this issue compared to the past, because in the past there were lots of accord on the political issues, but what we're seeing is the deterioration of the political factor as well, so I think this is going to get very ugly from my point of view.
Sputnik: If we look at the Japanese economy at the current moment, what impact has the introduction of duties by the US already had?
Dr. Seijiro Takeshita: This is really bad timing. The fact of the matter is we've been seeing a very good growth and we saw a blip, but the fact is that we're still having a very steady growth trend, but that’s very much led particularly by capital expenditure, which is investment by the corporations, but what corporations are seeing right now is when they look at these external factors, that is triggered by President Trump, you can clearly see that there’ll be moves of protectionism throughout the world, and, obviously, with a very heavy emphasis on reliance on exports, the Japanese companies are very reluctant to make aggressive capital expenditure at this point.
Sputnik: Just a short while ago, just last week Japan, China, South Korea had three-way talks in Tokyo and they vowed to accelerate negotiations for a trilateral free trade agreement. What is the perspective of this kind of an agreement between these three nations, obviously, it would be very beneficial.
Dr. Seijiro Takeshita: It would be, for example, with Japan, along with Korea and China, the political situation is extremely cold, but the economic situation is pretty hot, especially between Japan and China, and as we are seeing these quite questionable moves that are taking place by the United States, many of the nations, including the three nations I've just talked about, have to arm themselves or protect themselves in many senses, I guess these are very unreasonable issues that are going around.
Sputnik: What about other Japanese partners, could we expect Tokyo to deepen economic cooperation with Europe, with APEC, ASEAN?
Dr. Seijiro Takeshita: Obviously, they have to, and there needs to be a lot more unity that could take place in order, firstly, to halt this domino factor protectionism from happening, we can’t have this. And secondly, Japan basically has to secure its ties continuously; we don’t want the secondary sections, that Europeans might be getting from the United States on this Iran deal.
We don’t want the repeat of that in another areas, so obviously Japan would be willing to continue to expand their bilateral negotiations or Chinese negotiations or what have you in order to basically shield themselves from further aggression from Mr. Trump.
The views expressed in this article are solely those of the speaker and do not necessarily reflect the official position of Sputnik.
