Japan and the United States are working on a trade agreement on agriculture and cars that Prime Minister Shinzo Abe and President Donald Trump can agree on when they meet in New York in September, ENV reports.
The auto industry spokesman said the deal could be that Japan would offer US farmers new access to their market in exchange for Washington lowering tariffs on some Japanese auto parts. But he stressed that negotiations remain “fluid.”
Such a deal would give Abe a victory among motorists while helping Trump to strengthen support among farmers, an important constituency in the run-up to the 2020 presidential election.
A second source familiar with the discussions said that the Trump administration is seeking expanded access to beef and pork products.
Improving access to the Japanese market will help the US compete with the parties to the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CAPP), a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Trump and Abe discussed trade in Osaka during the G20 meeting last month, but the details of their talks were not published. The politician on Tuesday announced that some kind of deal was possible in September.
Although Abe is one of Trump’s closest allies on the world stage, the president threatened to impose high import tariffs on cars from Japan and the European Union to even out what he calls an “unfair trade imbalance”. Trump has repeatedly stated that he was dissatisfied with the positive trade balance of Japan with the United States, which amounted to $ 67.6 billion in 2018, with almost two-thirds of car exports, according to the United States.
Trump threatened to introduce 25% tariffs on imported Japanese cars for national security reasons but postponed them as trade negotiations continued. The leaders agreed last September to negotiate an agreement that protects Japanese automakers from further tariffs while negotiations are underway.
The deal will not require the approval of Congress, since the US president can cancel or reduce tariffs for goods with a duty of less than 5%, and most of the tariffs for auto parts are from about 3% to 6%. When asked about the possibility of such a deal, a Japanese government official declined to comment, but said that discussions at the working level on trade are underway.