The United States will remove a tariff levied on Japanese motorcycles with engine displacements of over 700 cc under the recently agreed Trans-Pacific Partnership trade pact, sources familiar with the matter said Thursday.
The 2.4 percent duty will be eliminated five years after the multilateral trade deal takes effect, according to the sources.
The United States, Japan and 10 other Pacific countries reached a broad agreement earlier in the month on establishing a free trade bloc covering 40 percent of the global economy.
For Japan, the new trade initiative will eliminate 99.9 percent of tariffs on industrial products within the TPP zone.
Japan has exported about 120,000 motorcycles with engines of 251 cc or higher annually to the U.S. market in recent years.
Honda Motor Co., the world’s largest motorcycle maker by volume, and Yamaha Motor Co. compete with local rivals such as Harley-Davidson Motor Co., which mainly focuses on motorcycles with engine displacements of over 600 cc.
The U.S. government imposes no tariff on imported motorbikes with engines of 700 cc or lower.
Japanese motorcycle makers are trying to beef up sales in the United States and Asian markets to offset flagging demand in Japan, where sales dropped to about 410,000 units in 2014 from a peak of 3.28 million in 1982.
Among the 12 member nations of the TPP, Vietnam will remove tariffs of 83 percent to 85 percent on Japanese motorbikes in eight years’ time.
Following the broad agreement reached at ministerial talks on Oct. 5, the 12 participating countries will need to finalize the text of the treaty for formal approval in their respective countries ahead of final ratification.
The nine other TPP members are Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru and Singapore.