GFMM desk: U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe announced an agreement Sunday on the sidelines of the Group of Seven summit in Biarritz, France, following a bilateral meeting earlier in the day. In announcing the deal, Trump also said Japan would purchase large quantities of U.S. wheat and corn.
According to the trade deal that would slash Tokyo’s tariffs on American beef, pork and other agricultural products, while delaying for now the threat of additional levies on Japanese auto exports to the U.S.
“If you say ‘win-win,’ it’s a capital letter ‘Win’ for the U.S. and a small-letter ‘win’ for Japan,” said Ichiro Fujisaki, a former Japanese ambassador to the U.S. The deal would put the U.S. back in line with its rivals for Japan’s agricultural market in terms of tariffs, a position Washington would already enjoy had Trump not rejected an earlier multilateral trade deal.
“In Japan’s case, it’s a small win plus non-negative assurance that no unilateral measures will be taken by the U.S., like on limiting car importations or some relations with security issues,” Fujisaki said. While Japan kept the threat of tariffs at bay, it didn’t get a removal of existing auto tariffs in exchange for its farm concessions, nor a public promise not to impose higher car levies.
It was Trump’s threat of punitive tariffs on Japanese auto exports that spooked Abe into agreeing last September to start bilateral trade talks with the U.S. Trump has in turn come under pressure from U.S. farmers, reeling from the trade war with China, who have also been hobbled by the tariff disadvantage in the Japanese market compared with competitors from signatories of the Trans-Pacific Partnership regional trade deal he rejected.
“We’ve agreed in principle,” Trump said. “We’ve agreed to every point.” He also referred to a “massive” purchase of wheat and a “very, very large order of corn” that he said would happen quickly. Trump said there would be no change to U.S. tariffs on Japanese cars.
The countries have reached consensus on “core elements” and were aiming to sign a deal during United Nations meetings next month, Abe said. The prime minister said that agricultural product purchases were a possibility, adding that crop pests had resulted in the need for “emergency support” to enable the private sector to buy American corn. More here..
SZK
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