Press Conference by the Chief Cabinet Secretary (Excerpt)

Q&As

REPORTER: I would like to ask about the trade deficit issue. According to the U.S. Department of Commerce, last year the U.S. trade deficit with Japan grew for the third year in a row, and Japan is second only to China when comparing by country. President Trump views the U.S. trade deficit with Japan and other countries as an issue. How does the Japanese Government perceive those statistics?

CHIEF CABINET SECRETARY SUGA: First of all, it is true that Japan is second following China. However, although Japan’s proportion of the U.S. trade deficit was 37% in 1995, by 2016 it had declined to 9%, and the trade deficit with respect to GDP also declined by half. Additionally, Japanese firms have invested heavily in the U.S., and according to the announcement by the U.S. Department of Commerce, the outstanding direct investments are $411 billion, and beyond that Japanese firms have created employment for approximately 840,000 people. Particularly in manufacturing, it is a fact that among foreign enterprises investing in the U.S., Japanese firms have created employment for the largest number at 380,000 people, centered around the automotive industry. In this way the economic relationship between Japan and the U.S. is maturing, and along with working to achieve the understanding of the Trump administration, we would like to firmly respond to further deepen and develop the Japan-U.S. economic relationship.

REPORTER: I have a related question. You just mentioned working to achieve the understanding of the Trump administration. This Friday the Japan-U.S. summit meeting will be held, and the U.S. side has stated that trade will be one of the themes. It is possible that President Trump will seek a reduction in the trade deficit, so what explanation do you expect the Japan side to make in that case?

CHIEF CABINET SECRETARY SUGA: While nothing is currently decided in regard to the summit meeting discussions, as for the Japan-U.S. economic relationship, I believe it is extremely important that constructive discussions take place on building win-win economic relations for both countries through further deepening of the Japan-U.S. economic relationship and collaboration.

(Abridged)

REPORTER: In relation to Japan, according to the announcement regarding balance of international payments for 2016 made by the Ministry of Finance, the current account surplus is 20.649 trillion, the highest level for the nine years since 2007, and since the Lehman Shock in 2008. How does the Government perceive this?

CHIEF CABINET SECRETARY SUGA: I would say that it is a sign that the overall Japanese economy is making a positive transition. The primary cause is the reduction in yen-based value of imports through the drop in oil prices and the strengthening of the yen, which caused a conversion from the goods trade deficit of last year to a surplus. Furthermore, in services earnings, the deficit was narrowed through a major expansion in the travel earnings surplus, to achieve the smallest deficit historically. In regard to the future of the current account, it is extremely difficult to currently provide an accurate forecast due to the large effects of internal and external economic conditions, exchange rates, the price of goods and the movements in interest rates, but we will monitor future movements closely. However, as I mentioned, the expansion in travel earnings in the services earnings will have an impact on the current account surplus.

(Abridged)

REPORTER: The trade minister of Australia stated on Bloomberg Television that a TPP-related meeting will be held in Chile next month, in which Australia intends to promote the TPP without U.S. membership. The minister stated that while the participation of six countries (85% of the combined gross GDP of the 12 original signatories) is required, if this is slightly adjusted the TPP can be put into effect. As for Japan, it appears to be the case that next month the Government wishes to discuss this stance on the TPP without the U.S.

CHIEF CABINET SECRETARY SUGA: Japan is naturally aware of that movement. The Government wishes to first of all negotiate even more closely with the U.S. on content that includes what you mentioned.
 
REPORTER: The Australian trade minister has basically stated that if the procedures of participation are slightly adjusted, the TPP can come into effect, but is it truly that simple? Can the TPP come into effect with such minor adjustments?

CHIEF CABINET SECRETARY SUGA: I think if there is an overall agreement, it is a possibility. Japan, however, has not yet conducted such research. That is my understanding.