According to press reports, the U.S. expressed “strong interest” in a potential free trade agreement with Japan during the second round of the U.S.-Japan Economic Dialogue Oct. 16. The U.S. runs a substantial trade deficit with Japan, and President Trump has voiced support for pursuing bilateral trade agreements to ease such shortfalls. However, there was some resistance to the idea from Tokyo, which maintains a preference for the Trans-Pacific Partnership Trump withdrew the U.S. from in January. Further discussions on trade relations are expected to take place when Trump visits Japan in November.

A joint statement issued at the conclusion of the latest talks reports the following additional developments.

- Japan will streamline noise and emissions testing procedures for U.S. automobile exports certified under Japan’s Preferential Handling Procedure.

- Technical-level work is underway that is to (1) result in more effective enforcement activities against unfair trade practices by third countries and (2) identify new areas of common interest for promoting high trade and investment standards.

- The two sides concluded a memorandum of cooperation in the transportation sector, including infrastructure development, financing, and maintenance as well as intelligent transportation systems.

- Earlier this year the U.S. lifted import restrictions on Japanese persimmons and Japan reciprocated on U.S. potatoes from Idaho.

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