Washington Insider - Tuesday

President on the Road in Asia

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

Trump Trip Could Determine Direction of KORUS Talks

Trade analysts believe President Donald Trump's trip to Seoul, South Korea, may go beyond North Korean-related security issues and help determine the direction of talks to amend the Korea-U.S. Free Trade Agreement (KORUS).

Trump arrives in the South Korean capital Nov. 7 tomorrow to meet with President Moon Jae-in for the second leg of his five-nation swing through East Asia, and the visit is likely be dominated by a defense-laden agenda.

On the sidelines, U.S. Trade Representative (USTR) Robert Lighthizer and South Korean Trade Minister Kim Hyun-chong will discuss the next step in the thorny issue of KORUS. "There's a possibility that Trump will mention the need to cut the U.S. trade deficit" with South Korea, Kim said during a parliamentary audit October 31. But Kim said he does not expect the U.S. president to bring up specific sectors such as auto and steel.

Focus On Asia As China Looks For Trade Deal at APEC

The World Trade Organization's (WTO) top negotiator will head to Vietnam this week to meet with trade officials at the November 8 Asia-Pacific Economic Cooperation leaders’ ministerial meeting, along with President Donald Trump, in Da Nang, Vietnam.

WTO Director-General Roberto Azevedo will deliver a keynote speech on trade, technology and globalization. The meeting comes at a pivotal time for the WTO as its members ready for the 11th ministerial conference December 10-13.

WTO officials said their uncertainty about prospects for the biennial trade confab are due, in part, to the Trump administration's lack of engagement in the ministerial preparations. "We don't know what to expect from the Americans,” WTO Spokesman Keith Rockwell told reporters in Geneva last month. "Normally you had a pretty good idea of what they were thinking and hoping for. Now it is not so clear."

Washington Insider: President on the Road in Asia

The Washington Post, along with most other urban media, is reporting that the president continued his “tough” rhetoric on Monday, his second full day in Asia. He used a meeting with business leaders in Japan, his first stop on a five-country swing through the region to push for more “fair, open and reciprocal trade with Japan.”

“We want fair and open trade, but right now our trade with Japan is not fair and it’s not open — but I know it will be, soon,” he said Monday, speaking at the residence of the U.S. ambassador to Japan. “We want free and reciprocal trade, but right now our trade with Japan is not free and it’s not reciprocal, and I know it will be.”

Trump’s comments came a day after he delivered a speech to hundreds of U.S. troops at Yokota Air Base. Although he did not mentioned North Korea by name, the president offered a similarly strong message focused on pushing the region to contain Pyongyang’s nuclear ambitions. He told the assembled troops that they will have his administration’s support “to fight, to overpower and to always, always, always win.”

Trump and Japanese Prime Minister Shinzo Abe had scheduled bilateral meetings to discuss security and trade and held a news conference later Monday. But Trump's tough talk in Japan seems aimed at establishing the tone for his five-nation tour through the region, during which he confirmed that he is likely to meet with Russian President Vladimir Putin.

Trump told reporters during his flight here that he wants “Putin’s help on North Korea,” as his administration attempts to consolidate support for its strategy to pressure Pyongyang over its nuclear weapons program.

Trump told the troops that he has proposed a bigger military budget, and that “We’ve got a lot of stuff coming — use it well.”

The boisterous scene, during which the troops cheered and chanted “USA!” was closely watched in capitals across Northeast Asia, where governments from Seoul to Beijing are looking for signals of how Trump will address the threat on his first trip to the region. The president’s heightened rhetoric aimed at North Korea and the Kim regime has set the region on edge over concerns that increasing tensions could result in a military confrontation.

And he seemed unconcerned about the prospect that North Korea might use his trip to the region to demonstrate its military might by firing a missile. “We’ll soon find out,” he said. “Good luck!”

In a Sunday interview, Trump said he would be open to direct talks with Kim but emphasized that it “remains far too early” for such an idea. “I don’t think it’s strength or weakness; I think sitting down with people is not a bad thing,” he said. Last spring, Trump also said he was open to talks with Kim; but more recently, after Secretary of State Rex Tillerson said he was probing for direct channels of communication with Pyongyang, Trump wrote on Twitter that such a strategy was a waste of time. “Save your energy, Rex,” he wrote. “We'll do what has to be done.”

As Trump arrived in Japan, North Korea warned him not to make “reckless remarks” during his trip to Asia, saying that the “unstable” president risked inviting “nuclear disaster into the U.S. mainland.”

After speaking at the air base Sunday, the President spent the day with Abe, playing nine holes of golf, although a White House official said they did not keep score. At the golf course, Abe took pains to ensure that Trump felt comfortable: He presented Trump with white baseball caps with the embroidered words: “Donald & Shinzo: Make Alliance Even Greater,” which both men signed, and he served Trump, who can be picky about his food, a burger specially made from American beef.

Trump confirmed that he expects to meet with Putin, probably on the sidelines of the Asia Pacific Economic Cooperation summit in Da Nang, Vietnam, later in the trip.

The president promised repeatedly that trade will be a key focus of his trip, with China — a frequent target of his trade-related ire — looming largest on the economic front. Chinese President Xi Jinping consolidated power last month at the 19th Communist Party Congress, and Trump is preparing to face a newly emboldened Xi on his home turf.

When a reporter asked him about Xi’s elevated position, the president cut off the questioner, saying, “Excuse me, so am I.” He then listed highlights of U.S. power, including the surging stock market, low unemployment and success in confronting the Islamic State in the Middle East.

“I think he’s viewing us as very, very strong, in and also very friendly,” Trump said. “But we have to do better with trade with China because it’s a one-way street right now and it has been for many years. And we will. But the reason our stock market is so successful is because of me. I’ve always been great with money.”

So, the President has a tough agenda in Asia this time, and may well have a hard sell awaiting him as he pushes his trade vision—one that is being questioned increasingly by even some of his most ardent ag supporters. Clearly, this is an effort that should be watched closely by producers as it proceeds, Washington Insider believes.

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