Abe, Trump sign Paper confirming Japan-U.S. trade deal

September 26, 2019

New York--Japanese Prime Minister Shinzo Abe and U.S. President Donald Trump on Wednesday signed a joint statement confirming their countries' final agreement on a bilateral trade pact, after only about a year since the two leaders agreed on the launch of negotiations.

Abe and Trump also affirmed that the United States will not impose additional tariffs on automobiles and auto parts shipped from Japan while the trade pact is in effect.

Under the trade pact, Japan maintained its agricultural market liberalization on a par with levels of the Trans-Pacific Partnership free trade pact among 11 countries.

The United States stopped short of abolishing its tariffs on Japanese imported vehicles, a step it had promised under the TPP framework, from which Washington withdrew in 2017, apparently forcing Japan to make a concession in the sector.

Against this backdrop, Japanese opposition parties have expressed their dissatisfaction over the content of the deal.

"The outcome of this negotiation is a win-win solution," Abe said after signing the document. "We will be able to develop both the economies of Japan and the United States as we move forward."

Trump said, "This is a huge victory for America's farmers, ranchers and growers."

"In the fairly near future, we're going to be having a lot more very comprehensive deals signed with Japan," the president also said, suggesting that the United States will aim to continue trade negotiations with Japan.

The signing took place during the two leaders' meeting in New York. Japanese Foreign Minister Toshimitsu Motegi and U.S. Trade Representative Robert Lighthizer had concluded the bilateral trade negotiations Monday.

The pact has not passed domestic legal checks in Japan or the United States. Representatives of the two countries will sign the pact shortly, after the legal checks are completed.

The Japanese government will seek parliamentary approval for the trade deal during an extraordinary parliamentary session that will start on Oct. 4.

The U.S. government plans to skip congressional approval for the deal.

As the trade pact is set to take effect 30 days after domestic procedures are completed, the focus of attention will shift to discussions in the Diet, Japan's parliament, pundits said.

As for agricultural products, Japan will lower its 38.5 pct tariff on U.S. beef in stages to 9 pct by fiscal 2033, as it promised under the TPP.

Tokyo will set its threshold for invoking its safeguard emergency restrictions for beef imports at 242,000 tons in the first year, establishing a de facto low-tariff import quota. The country will eventually expand the threshold to 293,000 tons.

On pork, Japan will ultimately cut its tariff on low-priced products from 482 yen per kilogram to 50 yen.

Among sensitive items for Japan, the country will not set a tariff-free import quota for rice produced in the United States. During TPP negotiations, Japan set such a quota of 70,000 tons for U.S. rice.

As for industrial products, the United States will lower or abolish tariffs on industrial machinery, chemical products and steel products.

But the United States did not accept a request from Japan that U.S. tariffs on Japanese automobiles and auto parts be eliminated.

Although a supplementary document to the trade pact will refer to possible tariff abolition for automotive products through further negotiations, it will not clarify when such talks will start.

On whether the United States will impose additional tariffs on Japanese automotive products based on Section 232 of the 1962 Trade Expansion Act, the joint statement said the two countries will "refrain from taking measures against the spirit" of the trade agreement while it is faithfully implemented.

At a press conference after his talks with Trump, Abe said he and the president affirmed that the additional tariffs will not be imposed on Japanese products.

Meanwhile, Japanese Foreign Minister Toshimitsu Motegi said at a separate press conference that the deal turned out to be a "well-balanced" one regarding farm and industrial commodities.

"I think farmers will be relieved, and the industrial world will be satisfied," he said.

On the possibility of the United States abolishing its 2.5 pct auto tariffs in the future, Motegi said the two sides will have discussions with an eye to "a time of change" the auto industry is facing, including moves for electrification and autonomous driving.

Japan and the United States also reached a separate agreement on digital trade that includes a ban on imposing customs duties on digital products transmitted electronically, such as videos, music, software and games.

After signing the joint statement, Abe and Trump discussed the situations in Iran and North Korea. Abe explained the outcome of his meeting with Iranian President Hassan Rouhani on Tuesday.

Abe and Trump agreed that their countries will continue cooperation to ease tensions in the Middle East and build stability in the region.

Referring to attacks on oil facilities in Saudi Arabia earlier this month, Abe said it is difficult to believe that Yemen's Houthi rebels were able to conduct the attacks, suggesting Iran's involvement in the incident.

Also in their talks that lasted some 90 minutes, Abe and Trump exchanged opinions on issues related to China and South Korea. Jiji Press