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Chance Of A Shortened Trade Deal Between US And Japan By September: Reports


A quid pro quo trade deal involving agriculture and autos is being worked upon by the United States and Japan which would be agreeable to both US President Donald Trump and Japanese Prime Minister Shinzo Abe such that they sign the agreement during their meeting New York, said reports quoting industry sources familiar with the issue.
The deal could include Japan allowing access of American farmers to the agriculture of Japan while the US would reduce import tariffs on some auto parts exported from Japan, claimed reports. However the sources also said that the deal was still in talks.
If such a deal passed through, it would give Japan a win in the auto sector while also benefiting Trump to garner greater support among his farmer voter base which can become a critical component in the 2020 presidential election in the country. Sources also reportedly said that the Trump administration wants greater access to the Japanese beef and pork market.
The further opening up of the Japanese market would allow American companies to better compete with businesses from the member countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam are signatories to the Trans Pacific trade agreement. Trump had withdrawn from the deal as soon as he had assumed office as president of the US.
According to reports, a meeting between Trump and Abe on the sidelines of the G20 Summit in Osaka, Japan, at the end of June included trade – but no further detail of the meeting was available. According to a report in Politico, the two parties could come to some form of a trade agreement in September.
Despite Japan being one of the closest traditional allies of the US, Trump has threatened Japan as well as the European Union with import tariffs on cars and auto parts to address what he call unfair trade relations with these trade partners. Japan wants to wade off the treat to its crucial auto sector and its access to the American market - the largest car market of the world.
According to reports, such a deal between Trump and Abe would not have to go through the US congress for approval because it is within the powers of the US president to eliminate or reduce tariffs on goods that attract an import tariff of lower than 5 per cent and most of the auto parts have a tariff of between 3 and 6 per cent.
According to a report published by Reuters in on this issue, a Japanese government official reportedly informed that working level discussions on trade was being conducted by the two parties but declined to comment anything on the possibility of such a deal. There would also be no significant development on the possible trade agreement could be made before the July 21 elections for Japan's upper house of parliament, said the report. "We have a mutual understanding that we should find common ground so we can find a final settlement," the official told Reuters.