The US and Japan signed a trade agreement Monday that will eliminate or reduce tariffs on certain agricultural and industrial products “to enhance bilateral trade in a robust, stable, and mutually beneficial manner” between the two countries.
Japan’s commitment includes elimination or reduction of tariffs on an additional $7.2 billion of US food and agricultural products (out of the $14.1 billion in US food and agricultural products imported by Japan in 2018, $5.2 billion was already duty free). This will result in over 90 percent of US food and agricultural imports to Japan being either duty free or receiving preferential tariff access after the implementation of the new trade agreement. Japan also agrees to provide country-specific tariff‐rate quotas for products such as wheat and wheat products, malt, glucose, fructose, corn and potato starch, and insulin.
The US’ commitment includes tariff elimination or reduction on 42 tariff lines for agricultural imports from Japan, which were valued at $40 million in 2018, such as perennial plants and cut flowers, persimmons, green tea, chewing gum, confectionary products and soy sauce. The US also agrees to modify its global WTO tariff rate quota for imports of Japanese beef, enabling Japanese beef producers to compete for a larger share of the global tariff rate quota quantity.
In addition, the two countries also reached a Digital Trade Agreement that will “help drive economic prosperity, promote fairer and more balanced trade, and help ensure that shared rules support businesses in key sectors where both countries lead the world in innovation.” Among other rules, the Agreement prohibits the application of customs duties to digital products distributed electronically, such as e-books, videos, music, software and games. It also facilitates digital transactions by permitting electronic authentication and electronic signatures, while protecting consumers’ and businesses’ confidential information and guaranteeing that enforceable consumer protections are applied to the digital marketplace.