The United States and Japan are in talks over a new bilateral free trade agreement. This coming January marks two years since the United States withdrew from the Trans-Pacific Partnership (TPP). Ever since their exit, the U.S has been looking to other free trade agreements in the Pacific.
First Order of Measure- Reduce the Deficit
Discussions for this agreement between the first and third largest global economies could commence as early as January, according to Sourcing Journal Online. In 2017 the U.S had $283.6 billion in trade with Japan. The U.S exported $114 billion of goods and services to Japan and imported $169.5. The primary driver for the U.S is the hopes of eradicating the trade deficit. They believe tariff and non-tariff barriers will achieve that.
Japan has long been an American alley but experienced tensions over the U.S withdrawal from the TPP. Now, it looks like Prime Minister Shinzo Abe is ready to strengthen ties with the U.S. Steel and aluminum tariffs have been implemented against Japan. Also, proposed auto tariffs hang in the balance ahead of negotiations, giving further incentive. Japan’s objectives are to keep those at bay and keep their agriculture sector off the table, details the Associated Press.
On the Negotiating Table
President Trump will work with Minister Shinzo Abe on specific critical measures of interest to the U.S. Increasing transparency regarding licensing, preventing trade distortions, and strengthening anti-dumping and countervailing duty evasion top the list. The U.S wishes to gain access to Japan’s auto market further and expedite customs. Stagnation in releasing shipments that have passed compliance laws has dampened cross-border e-commerce. These measures would increase express delivery for low-value goods, benefitting both parties.