Key Points of The Agreement
- The launch of bilateral talks called the "Trade Agreement on Goods" (TAG). Japan stresses the talks are not for a Free Trade Agreement (FTA), which includes rules on investment and services.
- Japan will refuse to offer agricultural tariffs lower than those agreed to in the Trans-Pacific Partnership and other trade pacts.
- The US will hold off on imposing tariffs on Japanese cars and other imports while the talks continue.
The US had been keen to hold bilateral trade negotiations with Japan. So in the short run, the talks may be a win for the Trump administration, according to Jiro Tamura, a professor at Keio University.
Even so, Japan has won a promise from Washington to refrain from imposing auto tariffs, which could have posed a major threat to the country's economy. Tokyo also set the condition that the discussions only address trade in goods, pushing back Washington's call for a more wide-ranging FTA.
Professor Tamura says the agreement reflects compromises by both sides.
So now, can we be rest-assured that the talks will resolve trade issues between the two countries?
People should not be overly optimistic, says Tamura, pointing out the Trump administration's negotiation tactics are quite unpredictable, and Japanese officials need to be careful about any unseen developments that could emerge during the talks. Japan may have "opened a Pandora's box" and "demands from the US might get bigger and bigger," he says.