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US, Japan announce partial trade deal

The U.S. and Japan announced a partial trade deal Sept. 25, one that would provide benefits for a reeling American farm industry but leaves some yearning for the more comprehensive deal that the Trump administration has sought.

Speaking at the United Nations General Assembly in New York, President Donald Trump said that the U.S.-Japan Trade Agreement would open Japanese markets for "some $7 billion" in U.S. food and agricultural goods.

Flanked by Japanese Prime Minister Shinzo Abe following a bilateral meeting between the two leaders, Trump said the partial deal — not a full, comprehensive deal as hoped for — would provide opportunities for U.S. agriculture. The U.S. will also reduce tariffs on some Japanese exports.

Trump said he hopes for a "very comprehensive" trade deal with Japan "in the not-too-distant future," while Abe noted that a full deal will be a "win-win solution" for both countries, according to pool reports.

Not mentioned at the meeting between Trump and Abe, however, were looming U.S. tariffs on global auto imports. Japanese Foreign Minister Toshimitsu Motegi said later that Trump does not currently intend to impose tariffs on autos imported from Japan, according to the Nikkei Asian Review.

"At this point, it is certainly not our intention, the president's intention, to do anything on autos on Japan," the Nikkei also quoted U.S. Trade Representative Robert Lighthizer as saying.

The U.S. exported $14.1 billion in food and agricultural products to Japan in 2018, according to the Office of the U.S. Trade Representative, and Japan would eliminate or reduce tariffs on $7.2 billion of U.S. food and agricultural goods under the limited deal. About $5.2 billion in U.S. food and agricultural imports to Japan were already duty free.

The Office of the USTR said in a fact sheet that Japan will reduce tariffs in stages on $2.9 billion of imports from the U.S., including fresh and frozen beef and pork. It will also remove tariffs entirely on another $1.3 billion of U.S. farm products, including almonds, blueberries, walnuts, grain sorghum and sweet corn.

Staged tariff elimination will also apply to $3.0 billion of U.S. goods including wine, cheese, ethanol, frozen potatoes and fresh cherries.

The U.S., meanwhile, will eliminate or reduce tariffs on roughly $40 million of agricultural imports from Japan, including green tea, perennial plants, chewing gum and soy sauce.

But some were left unfulfilled by the limited deal. Myron Brilliant, executive vice president and head of international affairs for the U.S. Chamber of Commerce, said in a statement that the deal would spur economic growth and boost sales for both countries, including American farmers and the digital economy.

"However, it's not enough," Brilliant said. "A comprehensive trade deal with Japan would provide some much-needed predictability — not only for the U.S. and Japan, but for all our trade allies."

U.S. farm trade groups including the Corn Refiners Association, U.S. Dairy Export Council and U.S. Wheat Associates expressed support for the limited deal, which they said would help boost sales of the respective crops in the Asian nation and make them more competitive with other countries that already have preferential trading treatment with Japan.

"This agreement, once signed, will lower tariffs and put U.S. farmers and ranchers on a level playing field to compete in Japan with countries that participate in the Trans-Pacific Partnership. That's good news," American Farm Bureau Federation President Zippy Duvall said in a statement.

Senate Finance Committee Chairman Ron Wyden, D-Ore., lauded the increased access for U.S. farm products, while saying that a more comprehensive deal is the most desired outcome.

"However, the agriculture deal is not a comprehensive one and there is much more to do to level the playing field in Japan for American workers, businesses, farmers and ranchers," Wyden said.

The two nations do $217.6 billion in two-way annual goods trade, according to the Office of the USTR. The U.S. ran a $67.6 billion goods deficit with Tokyo in 2018.

No agreement yet with India

Trump has also eyed a bilateral deal with India, hopes for which were deflated slightly after the two nations did not announce one on the sidelines of the United Nations General Assembly gathering Sept. 24 following a meeting between Trump and Indian Prime Minister Narendra Modi.

"I think very soon we'll have a trade deal [with India]," Trump told reporters Sept. 24. "We'll have the larger deal down the road a little bit, but we will have a trade deal very soon."

Separately, the Netherlands' Bureau for Economic Policy Analysis, or CPB, said in its monthly World Trade Monitor report that monthly global trade volume increased by 1.9% in July after falling 1.7% in June.