U.S. and Japan Reach a Trade Deal in Principle

Wall Street Journal writer Rebecca Ballhaus reported earlier this week that, “President Trump said Sunday the U.S. and Japan had reached a trade deal ‘in principle’ that would pave the way for more U.S. farm exports to Japan, while dropping the threat of increased U.S. tariffs on Japanese cars.

“‘We’ve been working on a deal with Japan for a long time,’ Mr. Trump said at an impromptu event at the Group of Seven world leaders summit, where he was joined for a second time that day by Japanese Prime Minister Shinzo Abe.

He said as part of the deal, Japan had agreed to buy a significant portion of the U.S.’s corn surplus.

The Journal article pointed out that, “Mr. Trump said he expected the leaders to sign the deal next month, around the time of the United Nations General Assembly.

“Mr. Abe said there was still ‘some remaining work that has to be done at the working level’ but that the two sides had reached a consensus on the core issues of agricultural and industrial trade.”

The Journal article indicated that, “The prime minister said Japan’s private sector would buy U.S. corn because of pest issues. ‘The Japanese private sector listens to the Japanese public sector,’ Mr. Trump quipped. ‘It’s a little different.’

More broadly, Ms. Ballhaus reminded readers that, “Mr. Trump pulled the U.S. out of the unratified 12-nation Trans-Pacific Partnership, which included Japan, on his first working day in office in 2017. A revised TPP took effect last year without the U.S., and now U.S. farmers are complaining as member countries—including Australia, Canada and New Zealand—as well as the European Union get greater access to Japan’s long-protected markets for beef, pork and dairy products.”

Bloomberg writers Isabel Reynolds, Jennifer Jacobs, and Josh Wingrove reported on Sunday that, “U.S. Trade Representative Robert Lighthizer said the proposed deal would open markets to $7 billion of American products including ethanol, as well as beef, pork, dairy products and wine.”

The Bloomberg article added that, “The farming provisions of the deal won some early praise in the U.S., with the National Pork Producers Council and Senate Agriculture Committee Chairman Pat Roberts, of Kansas, among those welcoming a deal they said would put American agriculture on a level playing field with the 11 TPP-member nations.

“Agriculture Secretary Sonny Perdue said removing the trade barriers would allow greater sales of U.S. farm products in Japan. Some in Japan said that was an acceptable price to pay.”

And Reuters writer Jeff Mason reported on Sunday that, “Trump said Japan had agreed to buy excess U.S. corn that is burdening farmers as a result of the tariff dispute between Washington and Beijing. Abe referred to a potential purchase of the corn and said it would be handled by the private sector.

“‘It’s a very big transaction, and we’ve agreed in principle. It’s billions and billions of dollars. Tremendous for the farmers,’ Trump told reporters about the deal during a joint announcement with Abe at the G7 meeting in France.”

On Twitter, several U.S. lawmakers reacted positively to the new trade development with Japan: