The U.S. and Japan signed a trade-enhancement agreement on Wednesday aimed at lowering agricultural tariffs in Japan and industrial tariffs in the U.S., as well as at setting new digital trade rules pertaining to the two countries.
A broader agreement is yet to be outlined, President Donald Trump said during the signing ceremony with Japanese Prime Minister Shinzo Abe at the United Nations.
The initial pact will open markets up to about $7 billion in U.S. agricultural products, the President further noted. Japan on its part will decrease tariffs on products including almonds, blueberries and broccoli. The two sides additionally made commitments for $40 billion worth of digital trade that entails the elimination of customs duties on products such as video games and e-books.
CNBC reports that President Trump further said the document they signed Wednesday outlined “the significant steps we’re taking toward a fair and reciprocal trade agreement.”
The two leaders said in a joint statement that they hoped to conclude trade talks within four months. Trump and Abe then said that “while faithfully implementing these agreements, both nations will refrain from taking measures against the spirit of these agreements and this joint statement.”
The latest trade deal comes as part of President Trump’s efforts to alleviate the damage caused by his threats to tariff Japanese vehicles as part of his wider campaign to tackle what he claims are unfair global trade practices.
Last year alone, Japan was America’s fourth-largest goods trading partner, sending 51 billion in vehicles to the U.S.
According to the U.S. Chamber of Commerce, the agreement “will spur economic growth and boost sales on both sides of the Pacific.”
But the business federation adds that the developing trade deal alone is not enough and that the Trump administration must “hold fast to its commitment to achieve a comprehensive, high-standard trade agreement with Japan that addresses the full range of our trade priorities, including services, intellectual property protection, and regulatory barriers to trade.”