A bilateral trade deal between the United States and Japan is likely to be signed off by Japanese Prime Minister Shinzo Abe and US President Donald Trump in September this year following the leaders agreeing on the broad principles of the deal and if the remaining work for the deal is completed within that time.

The trade agreement, if signed, would end months of negotiations between the two countries following the issue being raised by Trump with the aim of reducing America’s trade deficit with Japan.

“We’ve been working on a deal with Japan for a long time. And we’ve agreed in principle,” Trump said after his talks with Abe on the fringes of a Group of Seven summit in the southern French resort of Biarritz.

The forthcoming accord with Japan will be a “very big” one, said an optimistic Trump even as he is faced with uncertainty about US and China arriving at a trade deal before the 2020 US presidential elections which Trump is planning to contest.

“It will be a big plus for both of our economies,” Abe said and added that excess corn from the United States would be bought by Japan.

This deal assumes importance for the agricultural sector of the US – which is also an important supporter base for Trump, because the sector has been struggling from falling exports to China because of the trade war.

“We still have some remaining work that has to be done at the working level, namely finalizing the wording of the trade agreement and also finalizing the content of the agreement itself,” Abe said.

“But we would like to make sure that our teams accelerate the remaining work for us to achieve this goal of realizing the signing of the agreement on the margins of the U.N. General Assembly at the end of September,” he said.

According to the broad trade agreement between Japan and the US, Tokyo would not provide any deeper cuts on tariffs on US goods than those mentioned in the revised trans-Pacific free trade pact.

However the US did not give any concession on the current rate of import tariffs on Japanese vehicles even though this was one of the major demands of Japan form the US. But according to reports quoting sources, the US has agreed to scrap levies on many other industrial products.

Japan would not be included in the list of countries on which the US plans to impose higher tariffs citing reasons for of national security, said Japan’s top negotiator Toshimitsu Motegi, who was instrumental in designing the outline of the forthcoming trade agreement.

Cutting down of tariffs on American farm products such as beef and pork has been demanded by the US from Japan, because Washington believes that American producers had been put to a disadvantage because of the TPP compared to the countries who were part of the TPP deal.

According to reports quoting sources, Japan would be reducing its import tariffs on US beef to 9 per cent from the current rate of 38.5 per cent under the trade agreement.

(Adapted from JapanToday.com)

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