Reuters – September 17, 2019
WASHINGTON (Reuters) – U.S. President Donald Trump said on Monday that the United States has reached initial trade agreements with Japan on tariff barriers and digital trade that will not require congressional approval.
In a letter to the U.S. Congress released by the White House, Trump said that he intends to enter into the agreements “in the coming weeks” and was notifying lawmakers that the tariff deal would be made under a trade law provision allowing the U.S. president to make reciprocal tariff reductions by proclamation.
“In addition, I also will be entering into an Executive Agreement with Japan regarding digital trade,” Trump said in the letter.
A spokesman for U.S. Trade Representative Robert Lighthizer could not immediately be reached for comment on the letter and the trade deals.
Neither agreement would require a vote in Congress under the so-called “fast track” approval process. The Trump administration last year notified Congress that it would pursue negotiations with Japan under this method.
But over much of the past year, the scope of talks have narrowed to exclude the automotive sector, which is the source of most of the $67 billion U.S. trade deficit with Japan.
Instead, Trump and Japanese Prime Minister Shinzo Abe in August announced an agreement in principle of a deal that covered reductions in tariffs on agricultural and industrial goods, but not autos.
The two leaders said at the G7 summit in France that they hoped to sign the agreement at this month’s United Nations General Assembly in New York.
Trump’s letter did not disclose any contents of the agreements, but Japan had previously said it was willing to consider a deal that would reduce agriculture tariffs to levels previously contemplated under the Trans-Pacific Partnership, a trade deal that Trump quit on his third day in office in 2017.
Trump’s letter said that the United States would pursue further trade negotiations with Japan.
“My Administration looks forward to continued collaboration with the Congress on further negotiations with Japan to achieve a comprehensive trade agreement that results in more fair and reciprocal trade between the United States and Japan,” Trump said.
U.S. technology industry officials say they expect the digital trade agreement with Japan to be closely aligned with provisions in the new U.S.-Mexico-Canada Agreement (USMCA), which follow the U.S. model for internet development.
The USMCA provisions aim to ensure the free flow of data across borders without taxation, prohibit data server localization requirements and limit governments’ ability to require the disclosure of source code by the companies they regulate.
Announcement of the Japan agreement also left unclear whether Trump has agreed not to impose threatened national security tariffs on Japanese vehicles and auto parts. Avoiding the “Section 232” tariffs of up to 25% was a major motivating factor for Tokyo in negotiating with Washington on trade.
Trump said after the G7 summit last month that he was not considering auto tariffs “at this moment”.
For Trump, the signing of even a partial trade deal with Japan centered largely on agriculture would provide some relief to U.S. farmers who have been battered by a 14-month U.S.-China trade war and lost market share.