TOKYO (AP) – Japan’s Parliament yesterday approved a trade deal that was agreed upon by United States (US) President Donald Trump and Japanese Prime Minister Shinzo Abe earlier this year.
The deal-cutting tariffs between the countries takes effect at the beginning of next year. It cleared Japan’s Upper House yesterday after clearing the more powerful lower house earlier.
Some critics said the deal is more advantageous to the US since a 2.5 per cent tariff on Japanese automobiles remains.
The deal will pave the way for cheaper American beef and other agricultural products in Japan. Trump withdrew from the Trans-Pacific Partnership agreement, negotiated by the Obama administration.
US farmers have felt they were at a disadvantage compared to Australian or Canadian counterparts. Japan also reached a separate trade deal with Europe. Japan, which imports US farm products worth USD14 billion, is America’s third-largest market.
The US and Japan have agreed to continue talks on trade, and the auto tariffs are likely to come up in the talks.
The Japanese auto industry is a key part of this nation’s economy, although the manufacturers, such as Toyota Motor Corp and Honda Motor Co, have moved production abroad to avert tariffs and become part of American business.
When the trade deal was reached in September, Trump said it means opening Japan’s market to about USD7 billion in US farm goods, with tariffs lowered or scrapped on American beef, wheat, cheese and corn.