It is of no small significance that Japan and the United States, whose combined gross domestic product accounts for 30 percent of the world’s total, have developed a framework for the promotion of free trade.
In their meeting in New York, Prime Minister Shinzo Abe and U.S. President Donald Trump signed a joint statement after the two countries reached a final agreement on a new trade deal.
As for the tariff cuts for U.S. agricultural products, it was agreed that tariffs will not be reduced any lower than the levels set under the Trans-Pacific Partnership agreement. Rice, to which Japan attaches importance, has been excluded from the agreement. Punitive tariffs on U.S. imports of cars from Japan, which was a focal point, have been averted.
It is laudable that the two countries have found a realistic point of compromise after going through tough negotiations.
But it is necessary to remember that the Trump administration unilaterally withdrew from the TPP framework and brought bilateral trade negotiations to the table, where its opinion can be accepted more easily. Concern cannot be wiped out that Washington will press its trade partners to make concessions by threatening to impose punitive tariffs in future negotiations as well.
Attaching importance to international cooperation, Japan has realized the conclusion of economic partnership agreements with 10 other TPP member countries and the European Union.
The agreement hammered out this time makes up for the deficiency caused by the U.S. withdrawal from the TPP, but it runs counter to the ideal of spreading free and fair trade rules to many more countries. In the end, it can be nothing but the second-best measure.
When the accord takes effect, tariffs on many items will be removed or reduced. Tariffs on U.S. beef imports, for example, which currently stand at 38.5 percent, will be lowered to the same level as those for imports from the two TPP members of Canada and New Zealand, eventually going down to 9 percent.
Tenacious efforts vital
An expected increase in lower-priced imports would bring benefits to consumers but affect domestic farming and the livestock industry.
It is imperative for the government to support technological innovations and ramp up the scale of farming, thereby boosting the productivity and competitiveness of farmers. The quota for Japanese beef exports to the United States with low tariffs will be expanded considerably. An aggressive stance is called for on the part of those concerned.
It has been decided that U.S. tariffs on Japanese car imports (2.5 percent for passenger cars) will be negotiated continually. It was mentioned in the joint statement, among other documents, that as long as negotiations continue, Washington will not take any action that runs counter to the spirit of the deal.
Washington has been looking into imposing punitive tariffs on Japanese autos and setting numerical limits on the number of vehicles imported from Japan. It insists that the increase in imported cars impedes technological innovations by U.S. carmakers and threatens national security.
If such tariffs are invoked, it would deal a serious blow to Japanese carmakers. It is unavoidable that the abolition of tariffs on automobiles has been postponed by giving priority to averting the worst possible development.
As long as Japan concedes on agricultural imports, it is reasonable for the United States to work toward eliminating tariffs on car imports from Japan. Tokyo should persistently work on Washington to achieve that goal.
(From The Yomiuri Shimbun, Sept. 27, 2019)