Japan, U.S. to negotiate trade agreement, cooperate with EU
September 27, 2018
The United States and Japan will enter negotiations on trade including agriculture and will cooperate with the European Union on World Trade Organization reform and other issues, according to a joint statement the leaders of the two countries issued Sept. 26 in New York on the sidelines of the United Nations General Assembly.
The beginning of bilateral negotiations with Japan looks — at least initially — like a major accomplishment for President Donald Trump, who withdrew from the Trans Pacific Partnership negotiations in which Japan was the largest Asian partner. Trump said he prefers bilateral agreements rather than worldwide or regional agreements.
But the goals of the negotiations are limited, and Japan has gotten U.S. officials to agree not to demand any more concessions on agriculture than what Japan has agreed to in other trade agreements.
Trump and Japanese Prime Minister Shinzo Abe, "affirmed the importance of a strong, stable, and mutually beneficial trade and economic relationship between the United States and Japan, recognizing that our economies together represent approximately 30 percent of global Gross Domestic Product," according to a joint statement released by the White House.
"The president reiterated the importance of reciprocal trade, as well as reducing the trade deficit with Japan and other countries," the statement said. "The prime minister emphasized the importance of free, fair, and rules-based trade."
The statement said the two countries "will respect positions of the other government:
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• For the United States, market access outcomes in the motor vehicle sector will be designed to increase production and jobs in the United States in the motor vehicle industries; and
• For Japan, with regard to agricultural, forestry, and fishery products, outcomes related to market access as reflected in Japan's previous economic partnership agreements constitute the maximum level."
Trade Representative Robert Lighthizer said in a call to reporters the agreement with Japan is "not an agreement in terms of a trade agreement, but it's the beginning of negotiating a trade agreement."
Lighthizer did not directly answer a question about whether the agreement with Japan should be considered a free-trade agreement, but said it would require congressional approval and he would begin the process of notifying Congress he intends to use Trade Promotion Authority to negotiate it.
Lighthizer said even though many groups have urged Trump to rejoin the Trans Pacific Partnership negotiations from which he withdrew, "the president is not going to join the TPP."
Japan is the biggest economy in the TPP group, and Lighthizer noted Japan is the largest economy with which the U.S. does not have a free-trade agreement.
Senate Agriculture Committee Chairman Pat Roberts, R-Kan., a member of the Senate Finance Committee, said, "In 2017, the U.S. exported nearly $12 billion in agricultural exports to Japan, placing it as our fourth largest destination."
"There is a great deal of potential to continue to grow that market, particularly for wheat and beef," Roberts said. "At a time when rural America is in a rough patch with low prices and uncertain trade markets, this announcement is positive news."
The National Cattlemen's Beef Association welcomed the announcement, calling it "exciting news for America's beef producers because Japan is our top export market, accounting for nearly $1.9 billion in U.S. beef sales in 2017."❖