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Business Interests Press for Bilateral Japan-U.S. Trade Deal

07/18/2019

It is anticipated that negotiations in progress will lead to a trade deal between Japan and the U.S. when President Trump and Prime Minister Abe meet in New York during September.  At issue is a tariff on auto parts from Japan imposed by the U.S. and restrictions placed by Japan on U.S. agricultural imports. No appreciable progress in resolving issues will be made until after the July 21st elections for the upper house of the Diet. 

 

It is unfortunate that the U.S. finds itself in the position of competing with members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership from which the U.S. unilaterally withdrew within days of the new Administration in 2017. 

 

There appears to be conflict within officialdom in Japan with some elements of the Government considering that a mini-trade deal would be “interesting and reasonable” according to Reuters.  In contrast other officials maintain that any agreement must cover a wide range of items and should not be confined to auto parts and agricultural products. Although discussions took place between the leaders of the U.S. and Japan during the G-20 Summit in June, the U.S. has threatened to impose a 25 percent tariff on Japanese automobiles and parts which currently carry an approximately 5 percent rate. The White House is concerned over the annual $50 billion to $70 billion negative trade surplus with Japan. 

 

From January through May 2019, Japan was the first-ranked importer of egg products representing 27 percent of all U.S. exports, attaining 3,362 metric tons valued at $13.7 million.  Comparing the first five months of 2019 with the previous period in 2018, volume of egg products exported to Japan declined by 36 percent and value by 41 percent.