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US, Japan to start talks on 'trade deals': Abe

Mr Abe said he would not be drawn on whether the talks would lead to a US-Japan pact or a broader Trans-Pacific pact.

Palm Beach, Florida

FACING US pressure, Japanese Prime Minister Shinzo Abe said that Tokyo was ready to begin talks about "trade deals" with the US, but was careful not to commit to a bilateral deal.

After rising demands for fairer trade from his US host President Donald Trump, Mr Abe said on Wednesday that "we have agreed to start talks for free, fair and reciprocal trade deals".

But he would not be drawn on whether that path would lead to a US-Japan pact, or a broader Trans-Pacific pact, which Mr Trump currently opposes.

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Mr Abe said aides would discuss possible solutions and report back, buying some time to bring Mr Trump back on side with the so-called Trans-Pacific Partnership (TPP) - a regional agreement inked by Mr Trump's predecessor Barack Obama.

Mr Trump would like to see a bilateral deal that is likely to much more sharply target sensitive political issues for Tokyo - including access to agricultural and car markets.

The US leader notably did not exempt Japan from steel and aluminium tariffs, as he did for Washington's other allies and partners.

Mr Trump has repeatedly seen trade as a zero-sum game, with trade deficits - like the US$60-plus billion deficit with Japan - being bad and trade surpluses being good.

Sceptical of multilateral institutions and agreements, the Republican businessman-turned-president has preferred a trade strategy of divide and conquer, although that has yet to bear fruit.

"The media has not covered the TPP correctly," Mr Trump complained, standing next to Mr Abe after their talks in Florida.

"I don't want to go back into TPP, but if they offered us a deal that I can't refuse on behalf of the United States, I would do it. But I like bilateral better. I think it's better for our country. I think it's better for our workers and I much would prefer a bilateral deal," he said.

For months, Mr Abe has repelled Mr Trump's demands to start bilateral talks, but the dispute spilled into public earlier on Wednesday.

During an earlier sit-down meeting, Mr Trump issued a blunt face-to-face challenge to Mr Abe in full view of the cameras, demanding more favourable terms on trade.

"As the prime minister knows, they have done very well with the United States. We have a very big deficit," Mr Trump said as they sat across the table from each other at the Mar-a-Lago retreat in Florida.

Insisting the "relationship is a very good one", Mr Trump nonetheless broke with the usual diplomatic niceties, urging Mr Abe to do more to make trade "free, fair and reciprocal".

"We have a massive deficit with Japan," he said, pointing to passenger plane and fighter jet orders that could plug the gap before railing about unfair practices.

"The word 'reciprocal' is that when you have a car come in, we charge you a tax. When we have a car go through Japan, which aren't allowed to go there, we have to take down the barriers and we have to pay the same tax," Mr Trump said.

"But that goes for other countries too," he said, vowing to "weed" the deficit down.

The blunt talk will appeal to Mr Trump's domestic political base, which was promised a better economic deal and a tougher "America First" stance under his administration. AFP