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Editorial: With Japan-U.S. trade pact approved, resolve pending issue of auto tariffs

  • December 5, 2019
  • , The Japan News , 7:35 p.m.
  • English Press

The Diet has approved a Japan-U.S. trade agreement, with the pact expected to go into effect on Jan. 1, 2020. It is important for enforcement of the pact to lead to raising the level of economic growth.

 

Japan’s tariffs on U.S. farm products, including beef and pork, will be lowered to the levels that had been promised under the Trans-Pacific Partnership free trade pact. A wide variety of relatively low-priced imported products are expected to be put on the market, a boon to Japanese consumers.

 

The pact will have a big impact on domestic farmers and the livestock industry, but they are called on to step up efforts to boost exports without taking a defensive stance. Demand for Japanese food is rising overseas. The government should consider measures to back private-sector efforts to improve product quality and productivity, thereby boosting the competitive edge of Japanese producers.

 

U.S. tariffs on a wide range of Japanese industrial products will also be abolished or reduced, a move serving as a tailwind for the Japanese manufacturing industry.

 

The United States imposes tariffs on imported automobiles and car parts from Japan, with the tariff on passenger cars standing at 2.5%. It has been agreed to continue negotiations on these tariffs.

 

Opposition parties criticized the Japan-U.S. trade agreement, arguing that Washington did not pledge to abolish the tariffs on these Japanese products. The government sought to obtain their understanding, saying that it was stipulated in the pact that further negotiations will be held on the abolition of these tariffs.

 

The government has released a trial calculation that enforcement of the pact will boost gross domestic product by about ¥4 trillion, or about 0.8%. But that calculation is premised on the abolition of U.S. tariffs on automobiles. It is necessary for Tokyo to work on the U.S. side tenaciously to realize the abolition of these tariffs.

 

Expanding multilateral free trade frameworks like the TPP is a course Japan should aim for.

 

The United States steers trade issues into bilateral talks where it pushes its own assertions through. Such a U.S. stance, leaning toward protectionism, is not acceptable.

 

However, there was a possibility of Washington invoking punitive tariffs on imported Japanese vehicles, among other measures, if Tokyo does not accept negotiations, contending that U.S security would otherwise be jeopardized.

 

The government said that it had been confirmed between the leaders of the two countries that punitive tariffs would not be invoked as long as the trade pact is executed. It is imperative to make Washington honor the pledge.

 

The Diet has also approved a Japan-U.S. digital trade pact. The pact includes an agreement not to levy tariffs on online e-commerce transactions across national borders.

 

A noticeable point is that the pact bans, in principle, the two governments from calling for companies to disclose secret information related to such technologies as artificial intelligence and algorithms.

 

China has established a system for its government to be able to gather personal information and critical data possessed by companies. The Japan-U.S. pact on digital trade is likely intended to serve as a check on moves to have such a Chinese system prevail in other countries.

 

It is essential to utilize the agreement concluded this time for formulating international rules that can facilitate economic digitalization.

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