Japan-US relationsTrade deal
The swift ratification of a free trade deal with the US is the latest move by Japanese Prime Minister Shinzo Abe to firm up his relationship with US President Donald Trump. Photo: AFP/Mandel Ngan
Japan ratifies free trade deal with United States
But plenty of heavy lifting still ahead as agreement has multiple holes
ByAndrew Salmon
All Japanese hurdles for the implementation of a Japan-USA free-trade agreement have been cleared after the Diet's Upper House approved it on Wednesday.
The deal – officially the "US-Japan Trade Agreement and US-Japan Digital Trade Agreement" – was given the green light by Japan's Upper House after the Lower House had passed it last month, Kyodo News reported from Tokyo. Prime Minister Shinzo Abe's Liberal Democratic Party controls both houses, and Abe has made upgrading ties with Washington a key policy.
The deal looks to be a result of US President Donald Trump's oft-stated determination to cut into the trade deficits the US has with partners around the world.
Most notably, via tariff removals and phased cuts, the deal places American farmers – a powerful political lobby in many US states – on the same playing field as farmers from those nations that joined the Japan-led Trans-Pacific Partnership. The bilateral-centric Trump pulled the United States out of that multilateral pact in one of his first acts in office.
For Japan, the US offers tariff cuts on a range of Japanese industrial products such as capital goods. However, a key ambition of Tokyo – the removal of a 2.5% tariff on automobiles, one of Japan's key exports – is not met in the agreement.
The deal was undertaken with remarkable speed. Abe and Trump announced that negotiations would begin in September 2018. Talks started in April 2019, and the resultant agreement was signed on October 7 by US Trade Representative Robert Lighthizer and Ambassador of Japan to the United States Shinsuke J Sugiyama, pending ratification.
The haste with which negotiations were concluded suggested that it was, in fact, merely a preliminary deal. That notion was confirmed in a joint statement signed by Abe and Trump in September this year, which noted that talks on a wider deal would continue:
"With the conclusion of these early achievements, the United States and Japan intend to conclude consultations within 4 months after the date of entry into force of the United States-Japan Trade Agreement and enter into negotiations thereafter in the areas of customs duties and other restrictions on trade, barriers to trade in services and investment, and other issues in order to promote mutually beneficial, fair, and reciprocal trade."
While the enhanced access to the Japanese market that US farmers win may grant Trump an electoral boost in agricultural states in 2020, every indication is that even if Washington follows Tokyo's lead and ratifies the agreement speedily, much work remains ahead before a "gold-standard" free-trade agreement is agreed and signed.
– Additional reporting AFP
Shinzo AbeTrans-Pacific PartnershipDonald TrumpFree Trade Agreement