Re: Request for Comments on Negotiating Objectives for a U.S.-Japan Trade Agreement

The Securities Industry and Financial Markets Association (SIFMA)1 welcomes the opportunity to submit comments regarding the negotiating objectives for a U.S.-Japan trade agreement.

The relationship between the U.S. and Japan in financial services trade and investment is an important one. Both are amongst the world’s largest economies and, as a result, important members of the G20 and other multilateral fora that help frame rules for crossborder trade and investment in financial services. Strengthening the foundation of this relationship creates significant potential for enhancing cross-border trade and investment in financial services and throughout every other sector of these economies that are supported by financial services.

The links between U.S. and Japan’s capital markets are already deep. Two-way portfolio transactions in securities between the U.S. and Japan totaled $1.95 trillion in 2017, a 4.3 percent decline from 2016. In 2017, U.S. portfolio holdings of Japanese securities totaled over $1.0 trillion and Japanese portfolio holdings of US securities reached $1.98 trillion, 74% and 65% increases respectively since 2007.

Focusing on government bonds, U.S. holdings of Japanese government bonds has nearly tripled since 2007 to $149.2 billion. Japan is the second-largest holder of U.S. Treasuries, holding $1.0 trillion, roughly 83% above its 2007 level. Clearly, we are important investors in one another’s countries.

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