The TPP would have eased Japan`s regulatory barriers, but neither agreement contained rules to combat currency manipulation – a stated goal of the U.S. Trade Representative`s office. The United States has abolished its 2.5% tariff on cars manufactured in Japan under the TPP, but remains in place. Health and safety standards are far more protectionist than tariffs. Tariffs are just a trade tax. A health and safety standard can lead to a ban on trade. The chapter on these under the U.S.-Mexico-Canada Agreement (USMCA) is excellent, but it necessarily builds on the WTO and most of the litigation that U.S. agriculture will need in the future would be more useful if it were filed in Geneva. The only solution is for the United States to comply with the free trade agreements signed by Europe, Canada, New Zealand and other countries with Japan, such as CPTPP. But Japan`s Phase 2 can`t do it.
Although it is based on Phase 1, it will not cover “essentially” the whole of trade, one of the two criteria defined by the WTO. Instead, USA-Japan is a patchwork of give-aways to some industries, most in the form of Japanese promises to buy more in the United States. It is interesting to note that Brussels has informed Tokyo that all Japanese trade agreements should cover essentially all trade, a blow undoubtedly to the United States and Japan. But Japan is the world`s second largest importer of cheeses and is buying nearly $1.3 billion worth of cheeses in 2018. However, other dairy products are not included in the new agreement, such as butter and evaporated milk, and have had better access to the Japanese market under the TTP. The U.S.-Japan Trade Agreement (USJTA) came into force on January 1, 2020. In that agreement, Japan committed to grant the United States significant market access by phasing in most tariffs, implementing significant tariff reductions or allowing a certain volume of imports at a lower price. Once the USJTA is fully implemented, nearly 90% of U.S. food and agricultural products imported into Japan will be duty-free or preferential tariff access. The full text of the agreement and fact sheets are available on the website of the U.S. Trade Representative (USTR).
U.S. Agriculture Secretary Sonny Perdue called the U.S.-Japan trade agreement a “great benefit to our farmers and ranchers” that has improved access to the U.S. third-largest agricultural export market. As part of the agreement, Japan committed to improving market access for U.S. food and agricultural products by removing or lowering tariffs or allowing a certain volume of imports to a low level of duty. The United States and Japan will continue to meet this year to begin new negotiations for a broader trade agreement. Japanese imports of U.S. whey products, which totalled about $71 million in 2018, will also benefit greatly from the agreement. Japan`s tariffs on whey for food use are currently 29.8% plus 687 yen per kilogram (660.7% ad valorem equivalent). Under the agreement, Japan will create a single inter-ACP quota (CSQ) for U.S. whey products, which begins at 5,400 tonnes and will increase to 9,000 tonnes. Tariffs on most of these products will be immediately exempt from tariffs, while the rest will be duty-free in five years.