Japan's exports at a decline in March as shipments to China dropped more than 9%, pulling the nation's trade surplus sharply lower.
 
The data released Wednesday by the Finance Ministry was almost in line with forecasts. The report followed two days of trade talks with the U.S. in Washington aimed at redressing the chronic imbalance in Japan's favor, that totaled $67.6 billion in 2018 according to U.S. figures.
 
Exports from Japan, the world's 3rd largest economy, fell 2.4% from one year earlier to 7.2 trillion yen ($64 billion), while imports rose 1% to 6.7 trillion yen ($59 billion). The trade surplus dropped 32% from a year earlier to 528.5 billion yen ($4.7 billion), customs figures showed.
 
Exports to the U.S., Japan's biggest single overseas market, rose 4.4% while imports fell, increasing the politically sensitive trade surplus by nearly 10, to 683.6 billion yen ($6.1 billion), up 9.8% from the same month a-year earlier.
 
Japan's exports to China fell 9.4% from a-year earlier, highlighting smaller demand as the economy slows down amid a trade conflict with the U.S. over Beijing's technology ambitions.
 
Darren Aw of Capital Economics stated in a commentary that the deficit in March was not a significant concern and that overall, trade might have contributed to economic growth in the last quarter.
 
'The bigger picture, however, remains unchanged — the outlook for external demand remains weak,' he said.
 
U.S. Trade Representative Robert Lighthizer's office said in a statement that he and Japan's trade minister Toshimitsu Motegi agreed to continue talks soon.
 
In Tokyo, Chief Cabinet Secretary Yoshihide Suga said to a regular news conference that he obtained a report from Washington that the two sides had started negotiations consistent with an agreement last September between Trump and Prime Minister Shinzo Abe. The talks included trade in agricultural products and autos.
 
'I expect we will have constructive talks so that we have meaningful results that serve our national interest,' he said.
 
Motegi explained reporters that he told Lighthizer that Japan is not going to compromise on imports of agricultural products, saying that the conditions agreed in past negotiations are as far as Japan could go.
 
Japan made significant concessions on imports of dairy and other farm products while tough negotiations on the Trans-Pacific Partnership, a Pacific Rim trade deal which President Donald Trump withdrew from shortly after taking office in 2017.
 
'In the area of agricultural products, conditions we have promised in past economic cooperation is as far as we can go. I have told him that that's the line Japan cannot go beyond,' he stated.
 
Japan's conservative ruling party, the Liberal Democrats, have usually depended on strong support from rural voters and have sought to defend the country's farm sector from foreign competition.
 
This article is originally posted on tronserve.com