NEW YORK: US President Donald Trump and Japanese Prime Minister Shinzo Abe signed a limited trade deal that cuts tariffs on US farm goods, Japanese machine tools and other products while further staving off the threat of higher US car duties.
Trump said the deal would open up Japanese markets to some $7 billion worth of American products annually, cutting Japanese tariffs on US meats, wheat and cheese.
US Trade Representative Robert Lighthizer said after a signing ceremony between the two leaders on the sidelines of the United Nations General Assembly that cars - the biggest source of the $67 billion US trade deficit with Japan — were not covered in the announcement.
Japan wanted further discussions on this issue, Lighthizer said.
It was not the US intention to impose so-called Section 232 national security tariffs on Japanese autos and auto parts and the two sides would work together in good faith, aiming to start talks on phase two of an agreement next April, he said.
Japanese Foreign Minister Toshimitsu Motegi, who had negotiated the pact with Lighthizer, was more direct in saying that Japan received assurances that car tariffs would not be implemented.
“As long as the agreement is implemented faithfully, Section 232 will not be applied. This is what Prime Minister Abe confirmed with President Trump at the summit meeting,” Motegi told reporters.
A Japanese government statement also said further talks would seek to eliminate the existing 2.5 per cent US tariff on Japanese cars and would not result in the imposition of US import quotas on Japanese autos.
Lighthizer, during a previous stint at USTR in the 1980s, helped negotiate voluntary export restraints on Japanese autos, which led to increased US production by Japanese automakers. But Japan still exports about 1.7 million cars a year to the United States, making up about 10 per cent of US vehicle sales.
Wednesday’s deal was met with cautious praise from farm groups and lawmakers, who said they looked forward to a more complete deal.
Representative Jackie Walorski, an Indiana Republican, said she was “encouraged the deal will mean fewer barriers to digital trade and more certainty that costly auto tariffs will not threaten American jobs or raise prices for consumers.”
The US-Japan talks, launched a year ago, hit a snag earlier this week as Japan had sought last-minute assurances that Trump would not impose the Section 232 tariffs.
The US Trade Representative’s office characterised the agreement signed by Trump and Abe as “early achievements” from their negotiations on market access for agriculture, industrial goods and digital trade.
— Reuters
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