Business

In trade talks, Japan considers proposal to cut U.S. farm tariffs immediately to TPP levels

Kyodo, JIJI

Japan plans to propose immediately reducing tariffs on U.S. agricultural products to current levels for TPP members, according to sources familiar with the matter.

The measure would level the playing field for American farmers and ranchers, who have become less competitive in the Japanese market than their Australian and Canadian counterparts following the enforcement last December of a revised Trans-Pacific Partnership.

For example, to ensure equal conditions between the United States and members of the revised TPP, Japan would apply tariff rates at third-year levels, as opposed to first, if a Japan-U.S. trade agreement came into force in fiscal 2020, the sources said.

In return, Japan plans to call for U.S. concessions in bilateral trade agreement negotiations regarding the automobile sector, such as removing U.S. levies on Japanese automobiles and vehicle parts, the sources said.

Economic revitalization minister Toshimitsu Motegi and U.S. Trade Representative Robert Lighthizer were scheduled to hold talks later on Thursday in Washington.

The two sides were expected to focus on tariff cuts in the farming and auto sectors. Japan may file the proposal depending on how the discussions develop.

At a meeting in late May in Tokyo, Prime Minister Shinzo Abe and U.S. President Donald Trump agreed to speed up negotiations for a bilateral trade pact.

According to the current proposal, Japan would immediately reduce tariffs on American beef to 25.8 percent if a bilateral trade deal took effect in the year starting April 2020.

At present, Japan imposes a 38.5 percent tariff on American beef imports.

Under the TPP, formally known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, Japan’s 38.5 percent tariff on beef imports will be lowered in stages to 9 percent over 16 years.

As part of the process, the rate was lowered to 26.6 percent in April and will be further reduced to 25.8 percent in April 2020, putting American ranchers at even more of a disadvantage against their competitors in TPP members Australia, Canada and New Zealand.

Trump withdrew the United States from the TPP in 2017, citing his preference for bilateral trade deals.

Japan has been seeking the elimination of U.S. tariffs on its vehicles, including a 2.5 percent levy on cars and a 25 percent duty on trucks, as agreed to by former President Barack Obama’s administration under the TPP.

The Trump administration has expressed reluctance to remove auto-related tariffs, though the president appears to be trying to appease American farmers with increased market access to Japan as part of his 2020 re-election bid.

Japan and the United States held working-level talks in Washington for two days through Tuesday but the two sides remained apart in their positions, leaving the majority of tariff abolition and other requests to be officially made during the talks between Motegi and Robert Lighthizer.