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United States and Japan sign "first step" of new trade agreement

2019-09-25T18:32:38.980Z

United States and Japan sign "first step" of new trade agreement



New York (AFP)

US President Donald Trump signed on Wednesday in New York with Japanese Prime Minister Shinzo Abe what he called "the first step" in a new trade deal, even though nothing has been formalized on the delicate folder of the automobile.

This partial compromise "is a big chunk but in the near future we will have a lot more," said Trump, who remained elusive about the rest of the discussions.

Negotiated since April, this partial compromise focuses on agriculture and digital. It includes the reduction of tariffs on exports of pork and fresh and frozen beef to the Japanese archipelago, said the US Trade Representative (USTR) in a document issued in stride.

"This is really important money for our farmers and ranchers," said Donald Trump, adding that the deal unveiled Wednesday will also serve to "reduce our chronic trade deficit."

Last year, Washington accused Tokyo of a trade deficit of 56.8 billion dollars. Japan exported $ 51 billion worth of cars, according to USTR data.

US farmers, whose voices are highly courted by the White House tenant for re-election in 2020, were particularly vigilant in these negotiations.

- Protectionist measures -

In 2018, the Japanese imported $ 1.6 billion worth of pork, or 25% of US production, and more than $ 2 billion worth of US beef, which represents about a quarter of total exports of this meat.

Tokyo will also immediately eliminate tariffs for certain products, such as almonds and broccoli, and in stages for others, such as wine and cheese.

Japan, on the other hand, will have the right to apply temporary protectionist measures on some of the products covered by the agreement in order to have time to absorb the shock of a surge of imports. This is true especially for pork and beef, but also for oranges and race horses.

Of the $ 14.1 billion of US agri-food products exported to Japan in 2018, $ 5.2 billion was already tariff-free. With the new agreement, it is the equivalent of an additional $ 7.2 billion that is affected by a reduction in tariffs.

The United States, for its part, will lift or reduce tariffs on agricultural products representing $ 40 million in imports, such as green tea or soy sauce.

It is also planned to eliminate or reduce taxes on imports of certain Japanese industrial goods, such as steam turbines or bicycles.

Once in force, the partial agreement must provide American farmers and farmers with the same benefits as the trans-Pacific Free Trade Agreement that Mr. Trump had thrown at his arrival at the White House.

Wednesday's text also includes a section on digital commerce, which specifically prohibits tariffs on electronically transmitted products such as videos, music, e-books, software or games.

On the other hand, it does not cover the automobile, considered by most major states as a strategic sector.

Japan wanted the Trump Administration's firm commitment that it will not impose tariffs of 25% on its car exports, vital to its economy. According to Japanese media, discussions are still stumbling on this issue.

Japanese automakers Toyota, Nissan and Honda are big sellers of cars in the United States, where they also have factories, especially in southern Republican bastions.

The Republican President, who is seeking a second term, has given himself until 17 November to decide whether or not to impose new tariffs on cars not only from Japan but also from European Union countries.

© 2019 AFP

Source: france24

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