The Journal The Authority on Global Business in Japan

Each year, a delegation from the American Chamber of Commerce in Japan (ACCJ) travels to Washington, DC, to meet with US lawmakers. Known as the DC Doorknock (DCDK), it is one of the ACCJ’s most important annual events and serves to strengthen ties between the US government and US businesses in Japan.

This year’s DC Doorknock took place from April 1 to 4 and was carried out by a delegation of 14 chamber leaders—inclu­ding 10 chief executive officer of Japan-based US Fortune 500 companies. It was the ACCJ’s largest and most senior delegation yet.

The DCDK was timed to precede the bilateral trade nego­tiations between Japan and the United States that took place on April 15 and 16 in Washington.

The timing also served to boost the potential benefits to US businesses of expected visits to Japan by US President Donald Trump in May and June, during which he will meet with Japanese Prime Minister Shinzo Abe.

Led by ACCJ President Peter M. Jennings, this year’s delegation emphasized the need of a comprehensive, high-quality US–Japan Trade Agreement (USJTA).

During the four-day visit, they met with more than 20 congressional leaders and representatives of the:

  • Office of the Vice President
  • National Security Council
  • Office of the US Trade Representative
  • Department of Commerce
  • Department of State
  • Department of the Treasury

Through these meetings, the ACCJ communicated the importance of the Japanese market to US businesses and how both countries can benefit from a bilateral trade agreement.

Outlining their vision for a successful USJTA, the ACCJ delegates presented four actions that should be taken:

  • Eliminate tariff and non-tariff barriers
  • Prioritize highest-potential innovation
  • Support US–Japan cooperation
  • Build on Japan’s domestic reforms

In particular, they said that US-dominated industries, such as life sciences and digital trade services, should receive more attention during the bilateral negotiation.

Although trade talks with Japan have been delayed due to renegotiation of the North America Free Trade Agreement—the text of which was signed in November—and ongoing dia­logue with China, the ACCJ delegation felt a sense of urgency on the part of those with whom they spoke to address the concerns presented.

Japan and the United States are each other’s second- and fourth-largest trading partners, respectively. It was reinforced by the meetings that Washington continues to see Japan as a crucial market for a broad range of US business activities.

While pursuit of a bilateral agreement has been sidelined by other negotiations on the US side, Japan has implemented two significant trade pacts:

  • The EU–Japan Economic Partnership Agreement
  • The Comprehensive and Progressive Trans-Pacific Partnership (TPP11)

Both went into effect earlier this year and have placed the United States at a competitive disadvantage in the Japanese market.

For example, the EU–Japan Economic Partnership Agreement slashed tariffs on agricultural food products, including meat and wine. It also lifted barriers on a range of industrial products, such as chemicals, plastics, and cosmetics. The TPP11 achieved a similar degree of tariff reduction on such products coming from many Asia–Pacific nations, as well as Canada and Mexico. Corresponding sectors in the United States expect to lose market share in Japan unless a favorable bilateral trade agreement can be negotiated.

As the ACCJ delegation explained, goods and services are equally critical components of an inclusive bilateral agreement. Reduction or elimination of tariff and non-tariff barriers in all major sectors—including agriculture, automobiles, and pharmaceuticals—is critical.

Peter Fitzgerald, president, Google Japan (left) and US Vice President Mike Pence

The US withdrawal from the Trans-Pacific Partnership in 2017 raised concerns that Washington’s influence on business in the Asia–Pacific region could be seriously weakened. Such worries appear valid in light of the ongoing negotiation of the Regional Comprehensive Economic Partnership (RCEP), a process over which China’s weight is being felt. RCEP is a proposed free-trade agreement that would include the 10 members of the Association of Southeast Asian Nations (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) and six of their Asia–Pacific trading partners: Australia, China, India, Japan, New Zealand, and South Korea.

Negotiation of RCEP began in 2013 and has yet to be finalized. The ACCJ believes that, in the absence of such a large-scale multilateral pact, a USJTA would be a great opportunity for the United States to formulate a fair and sophisticated standard for trade agreements that can be leveraged for bilateral and multilateral negotiations with other jurisdictions in the region.

This year’s DCDK was highly successful, and the way in which leaders and lawmakers welcomed the delegates, and listened to their concerns and recommendations, was promising. Now that direct bilateral talks have begun, the ACCJ looks forward to playing a role in the creation of a comprehensive trade agreement between the United States and Japan. The meetings in Washington, showed how vital it is to have an open dialogue between the US government and its citizens who do business in Japan. Thanks to the warm reception and attentive ears, the ACCJ delegation returned to Japan feeling optimistic that a comprehensive USJTA—one that benefits both economies—is on the horizon.

Nathalie Muto is a staff writer at Custom Media, publisher of The ACCJ Journal.