Japan-US trade negotiations open the car tariffs in the Japanese agricultural market

Japan and the United States have reached a basic agreement on trade negotiations, which is expected to be signed in late September. Japanese media reported that Japan and the United States reached an agreement on three areas including agricultural products, while Japan’s most concerned part of the automobile tariffs may be decoupled from trade negotiations.

The Nihon Keizai Shimbun and the Japan News Agency reported that the Japanese and US governments have reached a basic agreement on the negotiation of a new trade agreement on the 25th and are expected to sign in late September. Japan’s US agricultural products, such as beef and pork, will open to the market at the Trans-Pacific Partnership (TPP) level, which came into effect at the end of last year. However, the United States has yet to guarantee that it will not impose tariffs on Japanese cars.

Japanese Prime Minister Shinzo Abe and US President Trump held talks in Biarritz, France on the 25th. As the two sides confirmed the conclusion of a basic agreement, emergency instructions include the production of agreement documents and other business operations.

● Japan and the United States agree on three areas
On the 23rd, the ministerial-level negotiations on Japan-US trade negotiations reached a general agreement on important items. Trump said on the 25th that the two sides have reached a basic agreement; the Minister of Economy and Finance of Japan, Mr. Mokumi, said at the press conference that it is aimed at agricultural products, industrial products and digital In the three areas of economy, “it seems to have been agreed.”

Japan will phase off the current 38.5% tariff on US beef, which is expected to be reduced to 9% in April 2033.

According to the basic agreement currently known, the size of the Japanese open agricultural product market will not exceed the opening level of the TPP. According to the TPP, Japan will gradually reduce the current 38.5% tariff on beef to 9%.

Mao Mu said that the United States will not be at a disadvantage compared to TPP members.

● Whether to add Japanese car tariffs and decoupling trade negotiations
Whether Japan can escape the United States to impose tariffs on Japanese cars in the future will be the focus of attention. The United States is currently studying the imposition of tariffs on the grounds of threats to security; even if the Japan-US trade agreement is being negotiated and not levied, the United States may decide in November.

For the Japanese automobile manufacturing industry, the United States is Japan’s largest auto exporter, accounting for more than 30% of Japan’s exports; if the United States decides to impose tariffs, it will inevitably have a negative impact on Japan’s domestic economy and employment.

On the afternoon of the 25th, Trump said in a reporter’s talk about the tariff issue on Japanese cars. “Japan’s tariffs have not changed.” According to Mao Mu’s interpretation, Trump said that “(Japan) does not apply tariffs.”

However, senior Japanese government officials said that it is the authority of the US president to launch a tariff policy. Therefore, whether Trump imposes tariffs on Japanese cars is still difficult to predict.

The United States agreed to make concessions on industrial products and to remove or reduce tariffs on a wide range of items; however, Japan hopes that the United States will abolish the requirements of Japanese auto tariffs, and it may decouple from trade negotiations in the future and continue consultations.

Mao Mu said that he hopes that the US can respond in the final stage of the completion of the meeting and expresses the hope that the US will clearly guarantee that it will not impose additional tariffs on Japanese cars in the future when the US-Japan trade negotiations are signed in late September.

● Trump seeks to re-elect export agricultural products to grab farmers’ votes
Abe said at the meeting that Japanese private companies plan to purchase 2.5 million tons of US-made feed corn, mainly because the US-China trade war has led to a sharp drop in the number of US exports of grain to China, and Japanese companies support the United States by purchasing some grain.

The US-China trade war has drastically reduced the export of US agricultural products. In order to seek re-election in 2020, Trump is expected to open the Japanese agricultural product market and appeal to American voters as a result of governance.

The Japan Broadcasting Association (NHK) reported that the US-China trade war has hit American farmers, Trump has won votes for farmers, and the emphasis on agricultural products is the result of their own efforts.

Trump said that this is a very big deal. “We have reached an agreement in principle, which is a very good result for farmers.”

US Trade Representative Robert Lighthizer, who attended the talks, said the two sides reached an agreement in three areas, such as tariffs on agricultural products and industrial products, and digital trade, especially beef, pork, wheat, dairy products and red wine exported to Japan. Great benefits can be obtained.

Credit : https://www.cna.com.tw/news/aopl/201908260089.aspx

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