A trade deal with Japan fails to mention cars, which make up around two-fifths of Japanese exports to America
teased trade-watchers on September 25th when he reannounced a deal with Japan . He promised it would mean “really big dollars for our farmers and for our ranchers”. A White House press release boasted about the extra access American exporters of beef, pork and cheese would get to the Japanese market. Robert Lighthizer, the United States Trade Representative, told journalists that American tariff reductions would arrive by January 1st.
There had been hopes that Mr Trump might sign a mini-deal with India, too, during his meeting with the country’s prime minister, Narendra Modi, on September 24th. American companies complain that India’s price controls on heart stents and knee implants force them to sell at below cost price. The hope was that, in return for a package that solved that problem, India might be reinstated as a member of America’s Generalised System of Preferences, which offers lower tariffs on some products.
Despite the lack of detail, one thing is clear: the deal will be narrow. Apart from some rules on digital trade, it seems to be focused on tariff barriers. It omits cars and car parts, even though these account for around two-fifths of Japanese goods exports to America. This has drawn criticism. Myron Brilliant of theThe narrow scope is partly because the Trump administration wants to avoid having to seek full congressional approval.
Further doubts stem from the leverage that has been granted to Japanese negotiators. They were brought to the table after America walked away from theby the threat of tariffs on cars and car parts. Now they have concessions they can roll back if the Trump administration enacts those. Threats have worked once. But they could be less use in securing the big concessions needed if this supposed staging post is not to become the final destination.
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