print PRINT

ECONOMY

Editorial: Doubts remain over apparent one-sided Japan-U.S. trade deal

Prime Minister Shinzo Abe’s claim that the newly negotiated Japan-U.S. trade agreement is a “win-win” deal is hard to accept.

 

Tokyo and Washington on Sept. 25 signed a bilateral trade pact they started negotiating one year ago. Japan has committed to lowering its tariffs on U.S. beef and pork imports immediately to the levels set for members of the Trans-Pacific Partnership (TPP) free trade arrangement.

 

In exchange for conceding this U.S. demand, Japan received no U.S. agreement to trim U.S. tariffs on Japanese automobiles and car parts within a clear time frame.

 

Gearing up his campaign for the U.S. presidential election in November next year, U.S. President Donald Trump, in a rush to please the powerful farm lobby, his key support base, has undoubtedly pressured Japan into accepting this rather lopsided deal.

 

Trump stage-managed an obvious political show by inviting farmers to be present in the venue for his meeting with Abe to strike the deal.

 

In line with the agreement, the U.S. tariff schedule, a document listing tariffs imposed on imports, will include a passage saying the U.S. tariffs on automobiles and car parts from Japan will be eliminated through further negotiations.

 

But the new trade accord says nothing about when this will happen. It is unclear whether Trump will actually move toward scrapping the U.S. tariffs on Japanese car imports, which are responsible for much of the U.S. trade deficit with Japan.

 

The World Trade Organization (WTO) rules require any bilateral trade agreement to remove import duties on “substantially all” the trade between the two countries, with “substantially all” being usually taken to mean 90 percent or more.

 

Since the new trade pact Abe and Trump have signed does not specify when Washington will remove its tariffs on Japanese cars and auto parts, which account for some 35 percent of Japan’s overall exports to the United States, it could undermine the basic principle of free and fair trade.

 

In a separate move, the Trump administration is contemplating slapping additional tariffs on car imports under the pretext of national security concerns.

 

The joint statement the two leaders have inked says, “While faithfully implementing these agreements, both nations will refrain from taking measures against the spirit of these agreements and this joint statement.”

 

This provision has emboldened Abe to stress that he has received a “clear confirmation” from Trump that his administration will not impose additional tariffs on Japanese cars and related products.

 

But the fact is that an almost identical passage was included in a joint statement they signed a year ago. While Tokyo and Washington were engaged in the ensuing bilateral trade talks, however, the U.S. government concluded that car imports from Japan and other countries pose a national security threat to the United States and postponed the decision on whether to impose additional tariffs on these imports to mid-November.

 

From this point of view, the new statement’s provision concerning this issue is far from reassuring.

 

The new bilateral trade talks were launched in response to a request from the Trump administration, which pulled the United States out of the TPP multilateral trade pact among Pacific Rim nations.

 

Initially, the Japanese government characterized the envisioned deal as a trade agreement on goods (TAG), focused on tariffs on goods. But the two sides have also agreed on a set of new rules for digital trade.

 

In the August meeting between the two leaders, Trump said Japan would buy all surplus corn that would have been sold to China.

 

The Japanese public has been given no detailed account of what the two governments have actually discussed and how they have reached this “final agreement,” which is marked by major Japanese concessions.

 

The agreement will be put into effect quickly, possibly by the end of the current fiscal year, and then the two countries will decide, within four months, on areas where they will continue the trade talks, according to officials.

 

Will the U.S. tariffs on Japanese cars and car parts really be eliminated? What other issues will the two countries negotiate?

 

Abe needs to fulfill his responsibility to answer these and other questions about the trade agreement, which he has failed to do so far, during the autumn extraordinary Diet session that will start next month.

  • Ambassador
  • Ukraine
  • OPINION POLLS
  • COVID-19
  • Trending Japan