Advertisement
Advertisement
Trade
Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more
US President Donald Trump and Japanese Prime Minister Shinzo Abe. Photo: AP

Donald Trump says Japan trade deal will be ‘tremendous for farmers’

  • Coming to terms with Japan is especially important because Trump withdrew from the Trans-Pacific Partnership on his fourth day in office
  • Leaving the TPP meant American farmers in particular faced higher tariffs for their sales to Japan than US trading partners
Trade
US President Donald Trump said on Monday he had reached a trade deal with Japan but provided no details of its terms including whether he had agreed to rule out imposing tariffs on Japanese automobiles.

“I am pleased to report that my administration has reached an initial trade agreement regarding tariff barriers … with Japan and I intend to enter into the agreement in the coming weeks,” the president said in a statement released by the White House.

The statement came less than a month after Trump had announced an agreement “in principle” with Japan at the G7 summit in Biarritz, France. The president told reporters it was “a very big transaction,” which would be “tremendous for the farmers”.

Explained: the difference between the RCEP and the CPTPP

At that time, Japanese officials did not confirm the agreement, saying instead that the two sides had a “convergence of views”.

Trump is expected to meet Japanese Prime Minister Shinzo Abe later this month at the annual United Nations General Assembly session. White House officials had been hopeful that they could announce major progress regarding the talks during the meeting with Japan, the world’s third-largest economy.
Coming to terms with Japan is especially important because Trump withdrew from an earlier Pacific trade deal called the Trans-Pacific Partnership (TPP) on his fourth day in office.
Japan’s Prime Minister Shinzo Abe and US President Donald Trump. Photo: Reuters

The president castigated that agreement, which the Obama administration had concluded with 11 other nations, as disastrous for American manufacturing. But leaving the TPP meant that American farmers in particular faced higher tariffs for their sales to Japan than US trading partners.

Throughout the year-long talks with the Trump administration, which Japan entered into reluctantly, Tokyo has resisted giving the US better terms than it provided in the TPP.

When those talks began last year, Robert E. Lighthizer, the chief US negotiator, said there would be “an awful lot of differences between what was negotiated in TPP and the kind of agreement we expect with Japan”.

What this notice means is they have actually completed the details of what tariffs both countries will cut
Lori Wallach, Public Citizen’s Global Trade Watch

The president’s announcement of an agreement with the Japanese on Monday was contained in a just a few paragraphs, and it was issued under a provision of law that gives lawmakers no role in approving the deal, according to Lori Wallach, director of Public Citizen’s Global Trade Watch.

“What this notice means is they have actually completed the details of what tariffs both countries will cut,” she said.

The president said he also plans to reach an “executive agreement” regarding digital trade, a focus of industries from financial services to retail.

That accord will not require legislative approval and is likely to resemble the provisions of other trade deals such as the US-Mexico-Canada Agreement, according to William Reinsch, a former Commerce Department official now at the Centre for Strategic and International Studies.

Trump also repeated his intention to move on eventually to a second step in the negotiations with Japan, which he called “a comprehensive trade agreement that results in more fair and reciprocal trade between the United States and Japan”.

Will Donald Trump’s trade crusade ultimately benefit Southeast Asia?

One of the president’s central objectives in his “America First” trade overhaul is narrowing the US trade deficit. Last year, Americans spent US$67 billion more on Japanese goods than Japan bought from American suppliers.

Trump has often focused on the auto industry as a barometer of overall US-Japan trade. Despite years of effort, US carmakers have struggled to gain ground in Japan. Ford withdrew from the market in 2016 after years of woeful results, which it blamed on Japanese trade barriers.

Many analysts are sceptical that Japan’s Abe, who faces opposition at home from politically powerful groups like Japan’s farmers, will move on to a second deal.

This article appeared in the South China Morning Post print edition as: Interim trade deal reached with Japan, Trump says
Post