September 3, 2019

U.S.-Japan Agree On Outline Of Potential Bilateral Trade Agreement

At last week’s 6-7 meeting in France, President Donald Trump and Japanese Prime Minister Shinzo Abe agreed to the broad contours of a bilateral trade agreement that would reduce Japanese penalties on American beef, pork and other agricultural products and that would delay the threat of additional levies on Japanese auto exports to the United States.

President Trump said, “We’ve agreed in principle … We’ve agreed to every point.” While the White House offered very little information about the specific provisions in the agreement, the president said Prime Minister Abe had agreed to a “massive” purchase of wheat and a “very, very large order of corn” from the United States.

U.S. Trade Representative Robert Lighthizer said the proposed deal also would open Japanese markets to $7 billion of U.S. products and would reduce tariffs on some industrial products.

U.S. officials reportedly are also hoping that a final deal will include efforts to address competitive currency devaluations. A full list of the Office of the U.S. Trade Representatives objectives for a deal with Japan is available here.

President Trump and Prime Minister Abe said they hope to finalize an agreement by the end of this month.

Last week’s pact came more than two years after President Trump withdrew the United States from the Trans-Pacific Partnership (TPP), a regional Asia-Pacific trade agreement that included the United States, Japan and nine other countries. (Japan is still part of the TPP, which went into effect at the end of 2018.) The U.S. goods trade deficit with Japan totaled $59 billion in 2018, a figure that was down 8.1 percent from the previous year.