The US-Japan Trade Agreement The final agreement was on September 26 at 5:45
Japan-US trade negotiations reached final agreement. While Japan responds to the opening of agricultural products such as beef and pork that the United States demands to the extent that it does not exceed the level of the TPP Agreement, the United States says it will not trigger additional tariffs on Japanese cars while the agreement is being implemented.
Avoid additional tariffs on cars
In the joint statement signed by the two leaders on additional tariffs on automobiles based on Article 232 of the US Trade Expansion Act, which was the focus of the agreement, “While the Agreement is being implemented in good faith, "Do not take any action against the spirit of the statement."
Concerning this, Foreign Minister Mogi said at a press conference that Prime Minister Abe has clearly confirmed to President Trump that the US does not impose additional tariffs on Japanese cars. Said the US has confirmed that it will not trigger additional tariffs on Japanese cars.
In addition, regarding the volume regulation that limits the number of cars exported from Japan, Minister Mogi explained to the Light Heiser trade representative that he clearly confirmed that the United States would not impose volume restrictions on automobiles and related parts in Japan. doing.
Continuation discussion on tariffs on automobile-related parts
Regarding tariffs on automobiles and related parts imported by the United States from Japan, negotiations will continue to eliminate tariffs in the future.
Under the TPP = Pacific Rim Partnership Agreement, the US side gradually eliminated 2.5% tariffs on passenger cars over 25 years, and immediately eliminated tariffs on nearly 90% of the related parts of automobiles. It was.
However, in this round of negotiations, the US side did not yield a single step, and the conclusion was carried over. This is because President Trump's speculation in anticipation of next year's presidential election was strongly reflected in the negotiations.
The Midwest region, called the “last belt”, where the US automobile industry is concentrated, was also a fierce battle in the presidential election three years ago, and the tariffs on automobiles and related parts cannot be concessioned in order to keep voter support. In other words, it was a sanctuary.
On the other hand, if tariff elimination in the automobile sector, which accounts for more than 30% of exports from Japan to the United States, is not included, there is a risk of violating the WTO = World Trade Organization rules over free trade agreements.
For this reason, this agreement included the expression “tariff elimination through further negotiations”, but no specific deadline is indicated and will be the focus of future negotiations.
No import quotas for rice
Regarding “rice”, which Japan has negotiated as the most important item, in addition to maintaining the current high tariffs, there will be no import quota of up to 70,000 tons that does not impose tariffs agreed by TPP. became.
For rice imported from the United States, the current high tariff of 341 yen per kilogram has been maintained.
In addition, TPP was supposed to set up an import allowance of up to 70,000 tons for the United States, but it was agreed that this agreement would not create an import allowance with no tariff.
This import quota included processed products such as “rice flour” and “mochi”, but under the new agreement, there will be no tariff-free import quota for these items.
For Japan, a certain concession was drawn from the United States, and the amount of rice and rice processed products that were compulsorily imported became smaller.
Beef down to TPP level
The 38.5% tariff imposed on Japanese beef by Japan will be reduced to the same level as when importing from Australia or Canada that participates in TPP.
If the agreement becomes effective during the current fiscal year, it will fall to 26.6%.
After that, it will be gradually reduced and will eventually reach 9% in 2033.
In addition, in order to reduce the impact on domestic livestock farmers, a measure called “safeguard” will be introduced to raise tariffs urgently if a certain quantity is exceeded.
If the import amount of American beef exceeds 242,000 tons in the first year of the agreement, the tariff will be returned to the current level of 38.5% and maintained until the end of the year.
After that, the amount of imports, which is the basis for activating safeguards, will increase year by year, and the level of tariffs raised will gradually decrease.
Regarding the beef safeguard, the import amount that will be triggered by TPP is currently set at approximately 600,000 tons, but apart from this, the triggering criteria for the United States only has been established, We would like to reconsult with TPP participating countries so that the import amount as the triggering standard does not increase as a whole.
American beef was subject to higher tariffs than Australian and Canadian due to the TPP that came into effect earlier, and the US side strongly urged Japan to reduce tariffs early.
Pork to lower to TPP level
Tariffs imposed on pork imported from the United States by Japan will be reduced to the same level as Canada and Mexico participating in TPP.
The tariff of up to 482 yen per kilogram for cheap meat has been gradually reduced to 50 yen by 2027.
The 4.3% tariff on high-priced meat will be eliminated by FY2027.
With regard to pork, tariffs have already been reduced and imports from these countries are increasing for Canada participating in the TPP and EU = European Union countries that have entered into force.
For this reason, the United States urged Japan to reduce tariffs to the same level as these countries.
Wheat New import quota of up to 150,000 tons
With regard to wheat, Japan has newly established a maximum import quota of 150,000 tons for the United States.
Japan supplies 90% of wheat consumed domestically by importing from abroad, and in order to stabilize supply and demand and prices, the country imports them all together and sells them to domestic millers. It is.
In order to protect domestic producers when selling to traders, a de facto tariff called “markup” is added to the import price.
While maintaining the state of the national trade system, wheat will gradually reduce its tariffs by 45% from the current level by 2026, and a new import limit of 150,000 tons will be added to the United States. It was decided to establish in.
This is the same level as agreed with the United States at TPP.
About half of the wheat imported by Japan is from the United States, and if the tariffs are reduced in the future, the price of flour and other products may fall.
No butter or nonfat dry milk
With regard to dairy products, we have decided not to set a low tariff import quota for the US on butter and skim milk powder.
TPP has established low tariff import quotas for New Zealand, Australia, and other countries, but this time, the United States was not added, and Japan maintained the low tariff import quota established by TPP.
On the other hand, as for TPP, tariffs such as “Grated cheese”, “Cheddar cheese” and “Gouda cheese” will be phased out by 2033.
US wines gradually phased out tariffs
For American wines, tariffs will be phased out.
Tariffs of up to approximately ¥ 94 on general 750 ml bottles will be phased out from the entry into force and will be eliminated in FY2025.
The economic partnership agreement between Japan and the EU = European Union has already lifted imports due to the elimination of tariffs on French and Italian wines.
If tariffs on American wines, such as California's famous localities, are phased out, consumer options will likely expand.
Export of beef to expand low tariff limits
The “export” of beef from Japan to the United States expands the scope for low tariffs.
Japan has been able to export with a tariff as low as 4.4 cents per kilogram up to 200 tons, but when it exceeded 200 tons, 26.4% tariff was imposed.
Under this agreement, beef can be exported with a low tariff of 4.4 cents, up to approximately 65,000 tons, including countries in Latin America.
Although the quantity will be combined with other countries, the upper limit of beef that can be exported from Japan to the United States with low tariffs will increase significantly, and exports are expected to grow further in the future.
The export of beef from Japan to the United States has increased by about 420 tons over the past year, about 3.3 billion yen each year, which has reached the upper limit that can be exported with low tariffs by March. I was asking the US side to export under favorable conditions.