The US and Japan have signed a limited trade deal that opens markets for US farmers and brings Tokyo a degree of assurance that US President Donald Trump will not impose new tariffs on auto imports for now.
The accords on agriculture and digital trade cover about US$55 billion worth of commerce between the world’s largest and third-biggest economies, US Trade Representative Robert Lighthizer said at a ceremony in the Oval Office alongside Trump.
The accord is a “game-changer for our farmers” and ranchers, Trump said at the event.
The finalization of the agreement increases the chances Japan will pass it in the current session of parliament, which ends on Dec. 9, and meet the goal of bringing it into effect on Jan. 1.
In Tokyo, Japanese Minister of Finance Taro Aso yesterday asid that the deal was a “win-win” for both countries and that he expected quick ratification.
Trump, who faces re-election next year, was eager to make a deal with Japan to appease US farmers who have been largely shut out of the Chinese market as a result of his trade dispute with Beijing.
US agricultural producers — also reeling from bad weather and low commodity prices — are a core component of Trump’s political base.
Under the deal, Japan is to lower or reduce tariffs on about US$7.2 billion of US-grown farming products, including beef and pork, which face higher levies than competitors from countries including Australia.
Japanese Prime Minister Shinzo Abe’s priority was to win a pledge that the US will not slap tariffs on Japanese vehicle exports, a sector valued at about US$50 billion a year and a cornerstone of the country’s economy.
The written text of the deal does not explicitly cover auto tariffs, but Abe has said that he received assurances that Japan would be spared from them.
The proposed pact would not lower the barriers protecting Japan’s rice farmers — a powerful group supporting Abe’s ruling Liberal Democratic Party.
The Central Union of Agricultural Cooperatives last month issued a statement saying that farmers would be relieved at the result.
The US has said this agreement — which was signed in principle on the sidelines of the UN General Assembly last month — is just the first phase of a broader pact.
“The parliamentary debate starts now,” said Japanese Minister of Foreign Affairs Toshimitsu Motegi, who headed Japan’s negotiating team.
“The most important thing is to bring it into effect quickly and I want to tackle this process with all my strength,” he said.
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