U.S. victory in trade talks with Japan would have little impact on deficit
AuthorAffiliation Staff Reporter of The Wall Street Journal</br></br>"This is already indicated by the fact that [U.S. trade officials] have suggested if they apply retaliatory measures, it'll only [affect] about $1 billion," said William Cline, an economist with the Institute for International Economics. "The direct effect would be small," he said.</br></br>Though European Union and Canadian trade ministers also will be represented at the talks, the auto dispute between the U.S. and Japan is by far the marquee event of this week's "quadrilateral" negotiations. The huge auto-trade imbalance is called the biggest glitch in their economic relationship and so, with the dollar at historic lows against the yen and the U.S. trade deficit at record highs, the talks have gained increased relevance.</br></br>U.S. officials say they will make a strong bid for settlement this week. But they insist there can't be one unless Japan agrees to a so-called "voluntary plan" for its auto makers to purchase more U.S. car parts. Last week, a Tokyo trade official insisted Japan won't do it.</br></br>"We have lots of room for negotiation and compromise in some areas, but there's no room for compromise on the voluntary plan," he said.