The Yomiuri ShimbunIt has been decided that the leaders of Japan and the United States will seek to sign a new trade agreement in September. It is essential to ensure that the details of the deal serve our national interests.
Prime Minister Shinzo Abe and U.S. President Donald Trump have held talks in France. They reached an agreement, in principle, on such matters as how to deal with tariffs in major sectors, including those on agricultural products and automobiles.
Trump held a press conference jointly with Abe, in which the president welcomed the deal, describing it as a “very big transaction.” Abe said, “It will be a plus for both of our economies.”
Trump’s decision on the deal stemmed from his wish to achieve an increase in U.S. exports of agricultural products early, in preparation for next year’s presidential election. This seems to have resulted in the early agreement.
Concerning tariffs on beef, pork and other agricultural products, Japan has continued to insist it will not make concessions in excess of those given under the Trans-Pacific Partnership trade deal. Japan’s assertion seems to have been accepted on the whole, and it is safe to say that the latest conclusion was within the scope of expectations.
For example, tariff reductions for Japan’s beef imports from Canada and other TPP participating nations have already started. The tariff rate will eventually be lowered to 9 percent. Meanwhile, the tariff rate for beef imports from the United States remains unchanged at 38.5 percent.
If the prices of U.S. products fall due to the effectuation of the new agreement, it will benefit Japanese consumers. If U.S. tariffs decrease, Japanese exports of industrial and agricultural products can be expected to increase.
Maintain security deterrent
There is cause for concern about the automobile sector.
The United States is considering such measures as an increase in tariffs on imports of automobiles and auto parts from Japan, arguing that such imports put U.S. security at risk.
Although Economic Revitalization Minister Toshimitsu Motegi has said additional U.S. tariffs will likely not be imposed, optimism is not warranted. There remains the risk that Trump will abruptly change his stance.
The agreement should be based on the assumption that Japan will not be put at a unilateral disadvantage. The key to signing the agreement is whether Japan can have the United States promise its automobile imports will be exempt from tariffs. Caution will be vital for negotiations with the United States.
To get North Korea to abandon its nuclear weapons and missiles, Abe and Trump affirmed the importance of cooperation among Japan, the United States and South Korea.
South Korea has decided to scrap its intelligence-sharing pact with Japan, the General Security of Military Information Agreement, sparking concerns that the move could adversely affect East Asia’s security environment. Although the latest summit talks did not take up the matter, the three nations need to maintain their deterrent power.
During the talks, the prime minister emphasized that North Korea’s short-range ballistic missile launches have violated resolutions adopted by the U.N. Security Council to sanction that country. Trump showed understanding over Abe’s view, but said the missile launches did not violate an agreement reached with the United States.
Trump may think there is no problem with North Korea’s action, noting that the missiles in question are short-range ones that cannot reach the United States. However, these missiles pose a threat to Japan. Japan and the United States must close the gap in their stances through multitiered talks.