Japan, U.S. to keep discussing cars after trade pact signing

In this July 31, 2019, photo, Honda cars are displayed at the automaker's headquarters in Tokyo. Japanese automaker Honda reported Friday, Aug. 2, a 29% decline in fiscal first quarter profit as an unfavorable currency exchange and declining auto sales in the U.S. and India hurt earnings. (AP Photo/Koji Sasahara)

TOKYO (The Japan News/ANN) — Discussions on abolishing U.S. tariffs on Japanese automobiles, a key goal for Japan, will continue after a Japan-U.S. trade pact is signed in September, according to an outline of the agreement that Japan and the United States have agreed to in principle.

Once the agreement comes into effect, Japanese tariffs on U.S. beef and pork would immediately be reduced to the rate placed on imports from countries that are part of the Trans-Pacific Partnership trade deal.

Japan wants the United States to scrap its 2.5 percent tariff on automobile imports, but the administration of U.S. President Donald Trump remains resistant to taking this step, out of a desire to protect domestic industries and jobs.

The United States is also considering additional tariffs and restrictions on the number of imported vehicles, for what it says are reasons of national security.

The Japanese and U.S. governments confirmed at a summit meeting last September that the United States would not impose additional tariffs while a trade pact is being negotiated. By continuing negotiations over automobiles after the agreement is signed in September, Japan hopes to avoid any additional tariffs and other restrictions.

In the agricultural sector, Japan currently imposes a 38.5 percent tariff on U.S. beef, while the tariff on TPP member countries was set at 27.5 percent when the pact went into effect. The rate fell to 26.6 percent in April, the second year of the agreement, and is set to drop to 9 percent in the 16th year.

To put U.S. products on a level playing field with other countries, immediately after the new Japan-U.S. trade agreement comes into force, the tariff will be cut to the same rate as TPP member countries, also eventually being lowered to 9 percent.

For pork from the United States, the specific duty of ¥482 per kilogram for low-priced products would be gradually reduced to ¥50, and the ad valorem tax of 4.3 percent on high-priced products would be eliminated.

Japan has created a “wide” import quota for TPP member countries that places low tariffs on 33 items, including butter and powdered skim milk. A similar quota would not be created for the United States.

The two countries agreed that the import quota for U.S. rice would be set at a maximum of 70,000 tons in the 13th year of the TPP, but Japan hopes to set a lower level in the September agreement.

By News Desk