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ECONOMY > Trade

U.S.-Japan trade deal may constitute violation of WTO rules

Yomiuri reported that the provisional trade agreement that the U.S. and Japan have crafted may be deemed incompatible with WTO rules that prohibit discrimination among member states. Bilateral and multilateral free trade deals have customarily been regarded to have cleared this statutory hurdle when their tariff elimination rates exceed 90%. The paper explained that if the U.S. refuses Japan’s call for the elimination of the 2.5% duties on Japanese auto imports, the U.S.’s tariff elimination rate would only be about 70%, which would probably constitute a violation of the WTO rules. While noting that President Trump appears to be extremely negative about removing the auto tariff, the daily predicted that the Japanese side will continue to press Washington to at least present a “roadmap” for the elimination in the last stages of the negotiations so that the final agreement complies with WTO rules.   

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