On September 25, 2019, President Trump and Japanese Prime Minister Shinzo Abe announced that the United States and Japan have agreed to a partial trade deal. This deal will reduce or eliminate Japanese tariffs on U.S. agricultural products as well as U.S. tariffs on some Japanese industrial goods. The agreement establishes rules similar to those in the United States-Mexico-Canada Agreement (USMCA). Although the specific language in the deal is under current legal review and still subject to final approval, the deal would provide substantial access for U.S. agricultural products (e.g., beef, pork, etc.) to the Japanese market. If implemented, approximately 90 percent of U.S. food and agricultural products imported into Japan will either be duty free or receive preferential tariff access. This level of access to the agricultural Japanese markets is said to be similar to that provided in the Trans-Pacific Partnership (TPP). The TPP writes the rules for global trade—rules that will help increase Made-in-America exports and grow the American economy. In return, the U.S. will reduce or eliminate tariffs on certain industrial goods from Japan such as certain machine tools, fasteners, steam turbines, bicycles, bicycle parts, and musical instruments.

 

Additionally, a U.S.-Japan preliminary agreement on a high-standard and comprehensive set of digital trade priority provisions has also been reached. Those provisions include:

 

  • Prohibitions on imposing customs duties on digital products transmitted electronically such as videos, music, e-books, software, and games.
  • Ensuring non-discriminatory treatment of digital products, including coverage of tax measures.
  • Ensuring barrier-free cross-border data transfers in all sectors.
  • Prohibiting data localization requirements, including for financial service suppliers.
  • Prohibiting arbitrary access to computer source code and algorithms.
  • Ensuring firms’ flexibility to use innovative encryption technology in their products.

Similarly, the digital trade provisions also comport with the USMCA.