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U.S. – Japan Work Toward a Trade Deal

U.S. – Japan Work Toward a Trade Deal

United States & Japan Eliminate and Reduce Tariffs

On September 25, 2019, The United States Trade Representative announced the United States and Japan have agreed to mutually reduce or eliminate tariffs on several imports into their respective countries.  President Trump and Prime Minister Abe have agreed to enhance market access for certain agriculture and industrial goods, as well as digital access.  The United States and Japan will continue to hold negotiations to achieve a comprehensive trade agreement with a goal of fair and balanced trade between the two countries.  First and foremost, Japan has agreed to reduce or eliminate over 90 percent of U.S. food and agricultural products imported into Japan.  Moreover, the United States has agreed it will provide tariff elimination or reduction on 42 tariff lines for agricultural products from Japan, as well as certain industrial goods such as certain machine tools, fasteners, steam turbines, bicycles, bicycle parts and musical instruments.

U.S. Japan Trade Deal

$5.2 billion U.S. products are duty free
$7.2 billion additional U.S. Products with tariff reduction or elimination 

According to USTR, “Out of the $14.1 billion in U.S. food and agricultural products imported by Japan in 2018, $5.2 billion were already duty free.  Under this first-stage initial tariff agreement, Japan will eliminate or reduce tariffs on an additional $7.2 billion of U.S. food and agricultural products. The agreement also provides for the limited use of safeguards by Japan for surges in imports of beef, pork, whey, oranges, and race horses, which will be phased out over time. When the agreement is implemented by Japan, American farmers and ranchers will have the same advantage as CP-TPP countries selling into the Japanese market.  The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, and entered into force on December 30, 2018.

The USTR article continues to list out the key elements of the U.S. – Japan agreement:

U.S. exports to Japan

Tariff Reduction: 

For products valued at $2.9 billion, Japan will reduce tariffs in stages.  Among the products benefiting from this enhanced access will be:

  • fresh beef
  • frozen beef
  • fresh pork
  • frozen pork
Tariff Elimination: 

Tariffs will be eliminated immediately on over $1.3 billion of U.S. farm products including, for example:

  • almonds
  • blueberries
  • cranberries
  • walnuts
  • sweet corn
  • grain sorghum
  • food supplements
  • broccoli
  • prunes

Other products valued at $3.0 billion will benefit from staged tariff elimination.  This group of products includes, for example:

  • wine
  • cheese and whey
  • ethanol
  • frozen poultry
  • processed pork
  • fresh cherries
  • beef offal
  • frozen potatoes
  • oranges
  • egg products
  • tomato paste
Country Specific Quotas (CSQs): 

For some products, preferential market access will be provided through the creation of CSQs, which provide access for a specified quantity of imports from the United States at a preferential tariff rate, generally zero. CSQ access will cover:

  • wheat
  • wheat products
  • malt
  • glucose
  • fructose
  • corn starch
  • potato starch
  • inulin

Imports from Japan into the United States

The United States will provide tariff elimination or reduction on 42 tariff lines for agricultural imports from Japan valued at $40 million in 2018.

Products include:

  • certain perennial plants and cut flowers
  • persimmons
  • green tea
  • chewing gum
  • certain confectionery products
  • soy sauce

The United States has also agreed to modify its global WTO tariff rate quota for imports of Japanese beef, enabling Japanese beef producers to compete for a larger share of the global TRQ quantity.

 

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