By Foster Klug / Associated Press
UNITED NATIONS — The U.S. and Japan on Wednesday signed a limited trade deal that will eliminate tariffs and expand market access on farm, industrial and digital products. But the deal does not address autos, a key sticking point during months of contentious negotiations, and President Donald Trump indicated the two countries were still working on a broader agreement.
Trump and Japanese Prime Minister Shinzo Abe signed the deal on the sidelines of the U.N. General Assembly. Trump called it the “first stage of a phenomenal new trade agreement” and described it as “outlining the significant steps we’re taking toward a fair and reciprocal trade agreement.”
“This is a big chunk, but in the fairly near future we’re going to be having a lot more comprehensive deals signed with Japan,” Trump said.
Abe said the agreement is good for both countries.
“We have successfully covered a wide range of areas, including not only the industrial goods, but also the agricultural products and also the digital trade between the two sides,” Abe said.
Trump has been seeking a bilateral agreement with Japan, the world’s third largest economy, since pulling out of the Trans-Pacific Partnership trade deal after he took office. Washington would like to reduce a chronic trade imbalance that totaled $67.6 billion in 2018, according to U.S. figures
The two sides reached a basic agreement in late August, but a major point of contention has been autos.
Japan is worried that Trump might slap new tariffs on its automobiles, which make up a significant amount of its exports to the U.S. Japan also has pushed to eliminate the current 2.5% auto and auto parts tariff.
United States Trade Representative Robert Lighthizer said he expects that Japan will pass the preliminary deal in October or November, with tariffs reductions on U.S. goods kicking in at the beginning of the year.