Sep 30, 2019 (Nikkei) - Donald Trump may be famous -- among other things -- for his book "The Art of the Deal." But last week Japanese Prime Minister Shinzo Abe schooled the obsessively transactional U.S. president on how a real deal is done.
With Chinese trade talks in tatters, U.S. farmers fuming over tariffs and impeachment now a live threat, Trump was desperate for a win on the global stage. Any win would do. Abe’s team exploited Trump’s anxiety and time pressures to score an artful dodge for Asia’s number-two economy.
Trump can claim negotiating supremacy all he wants, but Abe pretty much gave him only what Barack Obama got back in 2016 when he was president.
Don’t take my word for it. As Wendy Cutler, a key negotiator of the Trans-Pacific Partnership, tweeted: "Glad to see our President calling the Japan trade deal ‘phenomenal.’ Has anyone broken the news that it’s amazingly similar to the provisions and market access commitments of TPP!!"
The #minideal hashtag trending on Twitter said it all. The pact on agriculture, notes Tobias Harris of strategic consultancy Teneo Intelligence, is "for the most part the same with TPP." Notable exceptions include rice, where the pact is in Japan’s favor. The digital trade opening -- which lowers levies on transmitted videos, music and software -- mirrors TPP, while cuts in industrial tariffs here and there mean little pain for Abe’s economy.
Japanese farmer harvests rice with a combine harvester: notable exceptions include rice, where the pact is in Japan's favor. © Getty Images
So far, the trade team led by Toshimitsu Motegi, now Abe’s foreign minister, has quietly but firmly got the better of Trump’s. In August, Motegi told Lighthizer: "You are the ones who want a quick agreement. I'm only offering things I can deliver on."
Days later, China’s move to retaliate with $75 billion of tariffs on U.S. goods played right into Tokyo’s hands. Team Trump blinked, dropping demands for low-tariff quotas on dairy and other products beyond what Japan accepted under TPP.
This slimmed-down deal matters, of course. Trump gets to tout selling more beef, cheese, corn, pork, wheat and wine: in theory, the pact reduces tariffs on $7.2 billion of agricultural goods. Abe gets Trump off his back for a while -- and wins a key bargaining chip. When Trump needed a victory the most, his pal Abe delivered.
Yet the accord, cobbled together in extreme haste, ignored the most contentious question: whether Trump will go ahead with 25% import taxes on cars and auto parts. It is less than comforting that U.S. officials qualified reassurances there was no plan to devastate Japan Inc. with the words "at this point."
