Excerpts of the interview with U.S. Ambassador William Hagerty follow:

(Hagerty: U.S. frustrated at pace of trade talks with Japan)

Asahi: Let me ask about the U.S.-Japan trade agreement. How much positive impact on the U.S. economy do you expect from this agreement, if we reach an agreement?

Hagerty: I would think the potential is large, because if you look at it, the United States' economy is the largest economy in the world. Japan is the second largest free economy and the third largest overall economy. China is not a free economy, as you know.

But the notion of the largest economy and the third largest economy coming together and smoothing, whether it be tariff or nontariff barriers or any type of subsidies, the elimination of those, will, I think, facilitate more trade. That will be better for our producers and it'll be better for the consumers in both countries. So, I would expect positive benefits, from both sides.

As you know, there's been a persistent trade deficit with Japan, over many, many years. The United States is the largest--is the most open, I should say--of the major economies in the world.

Japan, I believe, exported some $170 billion (18.7 trillion yen) worth of goods to the U.S. market last year, so certainly Japan is benefiting from our openness, and I hope that we'll find ways to make both of our markets more open, but in particular to make the Japan market more open to our producers.

Q: Compared with the TPP (Trans-Pacific Partnership) agreement, which former President Barack Obama reached, what level of trade would the Trump administration expect, particularly regarding the Japanese food market and the automobile market?

A: Well, two things. One, I'd like to clarify that President Obama never delivered the TPP agreement. He had the opportunity in 2016 and he didn't do it. The political dynamics changed significantly in the United States, and he promoted an agreement that he could not deliver.

We're trying to put forward an agreement that we can deliver, on a bilateral basis. So, I have every confidence that President Trump is going to work out an agreement that works, again, for both the United States and Japan, and that we can finalize.

The terms of the agreement, while there has been considerable negotiation around the TPP, my expectation is that the agreement may take on a different light, in a number of respects. But I don't want to try to get in front of the negotiators. It certainly is up to (U.S. Trade Representative Robert) Lighthizer and his team. They've gone through a pretty extensive process called "Trade Promotion Authority," to lay out the objectives of the negotiation. And it will be up to them to prioritize those objectives, and then work with Minister (Toshimitsu) Motegi on the exact parameters of the negotiation. So, I'm very reluctant to get into the specifics.

My objective has been to create the right environment for a trade agreement to be realized.

There is one thing that the president has made very clear. Given the strength of our security alliance and the strength of our diplomatic relationship, he would expect an economic trade agreement to be no less favorable than any other country that Japan works with, and I think that expectation has been made clear, that the agreement that we work out would be no less favorable, because we have such a strong relationship on every other dimension.

But again, that's broad. The specifics will have to be worked out by Ambassador Lighthizer and Minister Motegi.

Q: In referring to the trade framework, there is a kind of linguistic difference between Japan and the United States. Tokyo calls it a "trade agreement on goods (TAG)," while Washington is seeking a "U.S.-Japan trade agreement." What is the difference?

A: I don't think there's really a linguistic difference because we came to an agreement in New York. The only agreed joint statement was the one in English. And I will get you a copy of it. It very clearly says "a trade agreement on goods, as well as other key areas, including services, that can produce early achievements." Including services.

Q: The Japanese government emphasized that "TAG" is totally different from an FTA (free trade agreement). From your perspective, from the U.S. perspective, what are the differences between TAG and FTA?

A: Again, we don't use the term "TAG." It's not consistent with our understanding, so I want to be clear about that. Our goal is to have a trade agreement, again, that is no worse than any other terms that Japan has, with other countries. We already have agreements in place with six of the original TPP countries.

When Japan is added to that, that comprises about 90 percent of the total trade volume originally intended. I think it presents a big opportunity. But the agreement between Japan and the United States is the most important part of this. Our goal is to have an agreement in place that facilitates more trade in goods, a more open market in services, and it will also touch on trade and investment rules.

Q: Let me just confirm, agricultural products are one of the most important issues between the countries. Does the United States expect the same level of TPP market access, or a decrease in the level of the tariffs?

A: I think the point of this statement, it's not as specific as your question, but it acknowledges the respect we have for the hard work that's already been in place on both those agreements, and the sensitivity that our partners in Japan make very clear, about the agricultural market.

So, I think that they will go into those discussions carefully and without a desire to do damage to the Japanese agricultural market, but certainly with a desire to open the market more for U.S. products, not to put U.S. products at a disadvantage in any way. I think that will be good for Japanese consumers. It will mean more variety, better pricing, and it will be good for, certainly, for U.S. producers, too.

Q: As you mentioned Section 232 of the Trade Expansion Act, the Japanese government is really concerned about whether or not the U.S. government would put an additional high tariff on Japanese-exported cars. What is your view, and is it realistic to put the additional tariff?

A: Well, I think that we're in a good place right now. The president has agreed to withhold the implementation of the tariffs, as long as we're negotiating quickly and in good faith with the Japanese side. My sense is that we will negotiate in good faith and in a rapid fashion.

I'll say this: There was a great deal of frustration, trying to get together with our counterparts in Japan. As I mentioned in 2016, the TPP became politically impossible in the United States. In April of 2017, Vice President (Mike) Pence and Wilbur Ross, our commerce secretary, visited Japan and raised the need to enter into trade negotiations. "We need a trade deal." No response.

I was with Vice President Pence in October, in a bilateral dialogue discussion, where the issue was raised again, directly by the vice president. We said that we need to enter into trade negotiations. Again, no progress.

The president was here in November of 2017 and met with Prime Minister (Shinzo) Abe. Trade was discussed at length, but no progress. We met in April of 2017, at Mar-a-Lago. That's the time when Prime Minister Abe appointed Minister Motegi to work with Ambassador Lighthizer. I was very optimistic then, "Now we're ready to go." But, things didn't move very fast.

Then Section 232 has been brought out, for national security reasons. The president said that economic security and national security are the same, and he wants to achieve reciprocity. He wants to have a trade agreement with our major partners that is no less favorable than any other country, and so that's the goal. We're on path, I think, to achieve that goal, and I hope we're able to do that in a timely fashion, and my expectation is that we'll be negotiating entirely in good faith. So, I hope that the 232 never becomes necessary. That would be my wish.

Q: How much concern do you have about Chinese telecom Huawei's practices and its link to the Chinese government? How serious is it that Huawei could build a backdoor into the products on behalf of the Chinese government? Do you have concrete proof?

A: The U.S. government is taking very seriously the situation with any company that is building critical infrastructure that is subject to the undue influence of another government. And Huawei would meet that definition.

We are concerned about dependence of our infrastructure on any company that could be subject to another government's influence. I think that concern is shared by many of our allies, including Japan, including Australia, including New Zealand, and a number of European allies as well, that I know have a shared concern in this regard.

How does this move forward? The United States market is large and open. We have a market-based economy, not a centrally, state-controlled, economy. That's led to innovations that have been incredibly powerful, throughout the years. Japan has also been a very innovative economy. We need to protect our intellectual property, and I think, by protecting our intellectual property, we will continue to innovate and provide great solutions and great technologies.

When companies take advantage, or when countries take advantage, of our intellectual property, by stealing it or forcing the transfer of technology for us to take part in their market, I think that presents serious problems. That's a non-market behavior that needs to stop.

So, I think that you will see the discussions and the negotiations that you mentioned focus very much on intellectual property protection, on forced technology transfer, and on cyber theft, that we know many examples of here in Japan and in the United States, where cyber theft is occurring. But those sorts of threats, all of those, lead us to be very concerned about any company that's providing critical infrastructure, if it is controlled or subject to the influence of a state.

Q: As you said, this is shared with America's allies, like Japan and Australia. What kind of cooperation would the U.S. government expect from the Japanese government, to cope with Huawei and ZTE, since Australia has banned that country's carrier from buying equipment for the next generation, 5G, networks, from Huawei and other Chinese companies?

A: I think Japan has taken some steps already, in terms of government procurement, that have sent a broader message, and I hope that private carriers, that the companies here in Japan, will pay close attention to the perspective of the Japanese government on its procurement, to the perspective of the U.S. government and the Australian government. We have access to intelligence that they would not have access to.

But, our decision has been to keep companies of that nature out of our networks and out of our infrastructure. So, I would hope that would have a positive influence on the private sector operators that are involved here.

Q: China is developing the capability of middle-range missiles, like the DF-21 and DF-26, which is a range covering U.S. bases in Japan. How do you assess China's recent development of its missile capability?

A: I think the recent military activity of China is a grave concern, should be to Japan and is to the United States. The actions that China has taken in the South China Sea with respect to the militarization of some of those features, the build-up of some of those features has been provocative, in a way that's not helpful. I think it potentially endangers free trade and commerce in the region.

Actions like that you described of building up nuclear weapons capability, again, create more tension in the region, and are something that I think both the United States and Japan share the belief that these types of activities, whether they be the build-up of weapons, or provocations, or militarization of assets, is not desirable. My hope is that we come to a new place with China.

Right now we have an extensive trade negotiation under way with China. But that trade negotiation also touches on something I think is very important to both the United States and Japan, and that is cyber security.

Both Japan and the United States have been victim of Chinese pilfering, through cyber security. It threatens us both economically and from a national security standpoint. As we begin to address those issues, I hope that we'll begin to make progress with China, to bring them more into line with international norms.

But today they stand out of alignment with international norms. That's why they're under immense pressure from us.

As you know, the pressure, from an economic standpoint, is twofold. One is direct pressure, with tariffs that we are imposing. The other is structural pressure that we are doing, in agreement with Japan and the EU, to come in and reform the WTO, to address the malign behavior that China has used, again on an economic basis, to damage other companies and other countries.

That malign behavior, I think, would also reach into national security, and I think we will all benefit, to the extent we're able to get China to change its behavior and behave in a more market-oriented fashion.

Q: The Trump administration has just announced that the United States will withdraw from the INF (Intermediate-Range Nuclear Forces) Treaty with Russia. After scrapping the INF Treaty, do you think the U.S. will deploy ground-based middle-range missiles, like the Tomahawk, to the Asia-Pacific region, in order to counterbalance China's missile capability?

A: Let me first talk about the INF Treaty itself. We acted, on Feb. 2, under Article 15 of that treaty, to give six months' notice to Russia of our intent to withdraw. We have been negotiating with Russia for more than five years. Our government wants our counterparts to know that we expect and we demand compliance.

So, I think that we're sending the right message. I appreciate the support that NATO has given us, and I hope that we have broader support from our allies, like Japan, as we move forward in this. But again, there is a six-month window now, for Russia to come into compliance.

Q: But, it is said that the true target of U.S. withdrawal from INF is not Russia; it's China.

A: Well, I'm familiar with China's posture, as you mention. As I said, that's a matter of concern to us. I'm also familiar with the speculation that goes on by people who may have been former officials. But I'm not going to speculate myself. At this point I think we need to be focused on bringing Russia into compliance.

We need to be focused on our negotiations with China on the economic front, and I hope that that will extend into an opportunity to bring China into a broader nonproliferation regime.

Q: As the president proposed, do you think the new treaty, including China, to ban the middle-range missile, is important?

A: I think that would be a very desirable. Having China included in a nonproliferation treaty would certainly be a more desirable position than where we are today. China is not a party to any of this. So, we have only the United States complying. Russia is not complying. China is not even a party to the agreement.

So, this is a construct that I think is not working well for us. There are many better options. The one you suggested I certainly think would be better. But, the position we are in today is not tenable.

Q: The next question is about Okinawa. Although Okinawa Governor Denny Tamaki opposes the current Futenma relocation plan, the Japanese government has started landfill work in Henoko Bay. Okinawa will conduct a referendum on the current plan, which could trigger rising tension between the Japanese government and Okinawa. How do you view the current tension between Tokyo and Okinawa?

A: Well first, I'd like to say that the U.S. government greatly appreciates the hospitality of the Okinawan people. We have a significant presence in Okinawa. That presence is critical to the safety and security of this entire region, and we very much appreciate the support and the good neighbor that we have in Okinawa.

I've met Governor Tamaki. We've had a friendly exchange. We both realize that we need to be on good terms, given the sizable presence of the United States in Okinawa. He's also made clear to me his opposition to the Henoko facility, the Futenma Replacement Facility.

But the decision has been made to replace Futenma. And, you may have been there to see it's in the middle of a very populous area. So, I understand the need to go to a less populated area. This is the one solution that has been identified. This certainly predated me. It's been a long time in process. I think that there is no other viable option at this point than to continue to pursue that facility.

I don't want to comment on the issues between local governments and the central government in Japan. That's for them to work out. But I would like to say that we appreciate our relationship with the people in Okinawa, and we don't see another option than the one that's being pursued right now.

Q: You believe the current plan is the best solution to close Futenma Air Station. Is there any possibility for the U.S. and Japanese government to re-examine the current plan?

A: There's no plan at this point to do that.

Q: Okinawa Prefecture has requested the Japanese government to negotiate with the United States to revise the Japan-U.S. Status of Forces Agreement, which has not been revised since 1960. Do you think the revision of the agreement itself is possible?

A: Again, I'm aware of no plan to revise the Status of Forces Agreement either. And that, at this point, is not under consideration.

Q: Japan and South Korea are currently engaged in disputes, such as South Korea's demand for compensation for forced labor, and the recent incident in which the South Korean destroyer's radar was locked onto Japan's aircraft. What is your view of the recent tension between the two countries, and do you have some concerns that this relationship might have a negative influence on the environment or security cooperation in East Asia?

A: The most important point is our security environment, and our trilateral cooperation has been very effective. The cooperation with Japan, South Korea and the United States was the most critical aspect of our ability to bring (North Korea) to a point that they're at the negotiating table now.

When I first came here, the North Koreans were flying rockets over Hokkaido, and they exploded a hydrogen bomb, and the school children here were doing evacuation drills, with hardhats on. And the success of our "maximum pressure campaign" should, I think, continue to be the focus. We should continue to look forward, together, and focus on how we can best support one another as allies.

The situation that you mention, I'm well aware of, and the escalation that's occurred. I was encouraged by Defense Minister (Takeshi) Iwaya's determination to let a cooling-off period happen. I think that's a mature way to deal with any type of escalation. So, hopefully that type of cooling off will offer an opportunity to, again, begin to look forward, toward some very critical challenges that confront all three of our countries.

Q: What kind of role do you expect of Japan to ease the tension?

A: I think that's going to be between Japan and South Korea, at the end, to determine their way through this. These historical issues have been in play for some time. But the escalation that you mention, I think, probably corresponds to some particular anniversaries that are taking place in South Korea right now.

I think that the decision taken by your defense minister was a wise one, just to let this de-escalate for a time, and perhaps let the environment cool down a bit.

But, with respect to specific suggestions, I'm going to refrain from offering specific suggestions. But I would say that I was pleased to see the approach of a cooling off.

Q: Prime Minister Abe is negotiating with Russian President (Vladimir) Putin over the Northern Territories. How do you view the current negotiation? Russia has expressed concern about the presence of a U.S. military base on the Northern Territories if they are returned to Japan, and asked Japan to confirm that it will not allow a U.S. military presence on the Northern Territories. Do you think that kind of agreement between Russia and Japan is acceptable to the United States?

A: I know this has been an important issue for Prime Minister Abe for some time, and this has been an open issue for many, many years. But I also understand it's quite complex.

I think that I will refrain from commenting on these hypothetical questions that are being raised.

Q: I understand President Trump raised the issue of the abduction issue before. In the coming second summit between Trump and Kim Jong Un, do you expect President Trump will raise the abduction issue?

A: He's raised it every time. He knows it's important to Japan. He knows it's important to Prime Minister Abe. And certainly it's important to me. I've met with the families. The president has met with the families. Everyone now knows her story, in America. And also, our special envoy for North Korea, Stephen Biegun, came here and we took Steve to meet the families as well.

To all of us, it's a very heartfelt desire to be helpful. My sense is, talking with the families, that they have a great deal of hope. But they need us to move quickly. Too much time has already passed. So I hope that this opening with Kim Jong Un will create the opportunity, then, for this issue to be resolved, between Japan and North Korea, once and for all.

The president certainly has maintained it on the agenda and my expectation is that he will continue to do so.

Q: President Trump is going to announce the State of the Union tomorrow. What is the expectation for the second summit?

A: My sense is that they are having, now, deliberate meetings setting conditions in place. The first summit was without a lot of staff-level engagement. And that's what has to happen; the staff need to be able to engage at a working level.

The first summit was really intended to create a window, to create an opportunity, for something new to happen. That's why the president agreed to it immediately. I think he caught Kim Jong Un by surprise.

Now it's up to Biegun, it's up to the working-level staff, to begin to put the pieces in place. Biegun is having those meetings now, and that's, to me, very encouraging.

So again, I don't know what will happen exactly. But I'm optimistic that we will begin to see now substantive progress because of the fact that we now have working-level meetings taking place.

Q: When I visited Washington, D.C., last month, many experts' concern was whether President Trump will decide to withdraw or reduce dramatically the U.S. force in South Korea quickly. How do you see the possibility of withdrawal of U.S. forces in South Korea?

A: It's not on the table. I'm aware of that speculation. It's been going on for a long time. But I think, in fact, it's not constructive speculation and it's never been put on the table.

That would not be an outcome I would expect from the second summit.

Q: This year the G-20 summit will be held in Osaka. Reportedly the Japanese government is considering inviting President Trump as the first guest, following the crown prince's accession coming this May. What kind of outcome do you expect from the visit of the president to Japan?

A: The president has a great relationship with Prime Minister Abe and he loves being here in Japan. I think he would be very pleased to be the state guest of the new emperor. The G-20 also will be another wonderful opportunity to be present here in Japan, and I know that his scheduling team are working very hard to accommodate both of these events.

At the same time, his schedule has been incredibly busy and demanding, with several changes to his schedule that have occurred just recently, with respect to a need to come to this region for a meeting with Kim Jong Un. Perhaps he'll meet with President Xi (Jinping) while he's in the region.

So it's difficult for me to predict, except to say that he's told me he would love to be here and very much appreciates the kind invitation to be a state guest of the new emperor. So I'm hopeful, again, that that will happen.

And, if it does, I think that will be a great opportunity for us to highlight the strong relationship that we have with Japan, and also to highlight our goal of really furthering our presence in the Indo-Pacific region.

The opportunity for us to work with Japan in this area, I think, is really great, and we are looking for infrastructure projects, energy projects, digital infrastructure projects that we can do, to really fulfill, I think, the potential for growth in this region. Half the world's population is here, and tremendous growth potential.

The United States and Japan already have a significant presence here. In fact, the U.S. private sector has over $1 trillion invested in the region. I think the important point about our approach, the U.S. approach, Japan's approach, is that it's private sector-led, not state-led.

So, I think it has the opportunity to leverage many, many more billions of dollars, in a way that will be supported by market economics, the projects will be economically sustainable, because that's the way the private sector analyzes and evaluates projects. You know, "the debt trap diplomacy," as Vice President Pence has called it.

These will be economically viable projects that will support the development and growth in the region. I think we've got great potential to do that, and I think the presence of the president here with Prime Minister Abe offers us a great chance to really push that forward.