US and Japan sign trade deal on agricultural products and digital commerce

The limited deal, agreed on the sidelines of the UN General Assembly on Wednesday, is potentially the first step in a broader trade deal between the two countries.

"Japanese tariffs will now be substantially reduced or totally eliminated for beef, pork, wheat, cheese, corn, wine and much more," said Trump, adding that the agreement would open the markets to about $ 7 billion worth of US agricultural products.

Last week, Trump told Congress that the United States and Japan were ready to sign a limited deal that would lower some tariffs and set conditions for digital commerce. The United States and Japan have limited the scope of the negotiations to prevent the Congress from having to decide on the agreement.

Messrs. Trump and Abe had previously announced in August, at a summit of the Group of Seven in France, that they had reached an agreement in principle on the reduction of agricultural and industrial tariffs.

Lower Japanese agricultural tariffs would allow American farmers to compete better in Japan. Exporters of US agricultural products have been at a disadvantage in the Japanese market since Trump retired from the Trans-Pacific Partnership of 12 countries at the beginning of his presidency. The other eleven countries had finalized this agreement and had obtained lower tariffs on the Japanese market.

The US Trade Representative's office said US agricultural products would now enjoy the same advantage in the Japanese market as the countries that signed the TPP.

Japan will lower tariffs on about $ 2.9 billion of beef and pork and eliminate tariffs on $ 1.3 billion worth of goods, including almonds, some fruits and nuts, and sweet corn. An additional $ 3 billion will gradually eliminate tariffs, including wine, cheese and whey, ethanol and other products.

For its part, the United States will reduce or eliminate tariffs on certain industrial products from Japan, including certain machine tools, fasteners, steam turbines, bicycles, bicycle parts, and musical instruments. announced the USTR. The United States will also reduce tariffs on agricultural products, including certain plants and flowers, green tea, chewing gum and soy sauce.

Tokyo and Washington also agreed on a set of digital commerce provisions, including the prohibition of tariffs on digital products transmitted electronically, including videos, music, ebooks, software and games, according to the USTR. The transaction guarantees cross-border data transfers without hindrance.

In the letter to Congress last week, the Trump administration left open the possibility of concluding a comprehensive trade deal in the future and said it would continue to work with Congress for future negotiations. Mr Trump said Wednesday that such an agreement would be signed in the future.

Business groups welcomed Wednesday's deal, but urged the Trump government to continue negotiations on all trade issues between Japan and the United States.

"Today's news will spur economic growth and sales on both sides of the Pacific, particularly for US farmers and ranchers and the digital economy," he said.

Myron Brilliant,

Head of International Affairs at the American Chamber of Commerce.

"However, that's not enough," said Brilliant. "The Chamber urges the Administration to firmly maintain its commitment to reach a comprehensive and high-level trade agreement with Japan, which covers all of our trade priorities, including services, protection of intellectual property and regulatory barriers to trade. "

The president promised that this agreement would help "reduce our chronic trade deficit" with Japan. In 2018, the United States exported $ 75 billion worth of goods to Japan, but imported $ 142 billion, resulting in a trade deficit of $ 67 billion.

For its part, Japan expected to benefit from protection against tariffs threatened by the Trump administration on imports of motor vehicles. The Trump administration determined that such imports threatened the national security of the United States and had the power to impose tariffs on that basis. The initial US announcement, however, made no reference to Japan's assurance of avoiding tariffs.

A joint declaration signed by the two countries, however, provided indirect assurances that the United States would not hit Japan with car tariffs, claiming that the two sides "will refrain from taking action against the spirit of the United States. these agreements ".

The nations reached a similar deal when their talks began a year ago and the United States has since refrained from adding tariffs to Japan. The statement also said that "the two countries will make efforts for a quick solution to other problems related to tariffs", without specifying a timetable.

Write to Vivian Salama at [email protected] and Josh Zumbrun at [email protected]