On September 25th, President Trump and Japanese Prime Minister Shinzō Abe announced that the United States and Japan have, as a result of early negotiations of a free trade agreement, reached consensus in the areas of market access for certain agriculture and industrial goods, as well as on digital trade. Specifically—

  • Japan has agreed to eliminate or lower tariffs on certain U.S. agricultural products, or provide preferential U.S.-specific quotas for wheat products and import surges of beef and pork. Once an agreement is implemented, over 90% of U.S. agricultural products imported into Japan will be duty-free or will receive preferential tariff access.
  • The United States has agreed to eliminate or lower tariffs on 42 tariff lines for agricultural imports from Japan valued at $40 million in 2018 (e.g., certain perennial plants and cut flowers, persimmons, green tea, chewing gum, and soy sauce).
  • The United States has also agreed to reduce or eliminate tariffs on certain industrial goods from Japan (e.g., certain machine tools, fasteners, steam turbines, bicycles, bicycle parts, and musical instruments).
  • The United States and Japan have reached a separate agreement addressing digital trade reflecting the digital trade rules provided under the US-Mexico-Canada Agreement (USCMA) which would—
  • Prohibit customs duties on digital products transmitted electronically (e.g., videos, music, e-books, software, and games).
  • Ensure non-discriminatory treatment of digital products, including coverage of tax measures.
  • Ensure barrier-free cross-border data transfers in all sectors.
  • Prohibit data localization requirements, including for financial service suppliers.
  • Prohibit arbitrary access to computer source code and algorithms.
  • Ensure firms’ flexibility to use innovative encryption technology in their products.

Miller Proctor Law PLLC will continue to track the developments of the U.S.-Japan trade agreement. If you have any questions relating to the negotiation of the agreement or other international trade-related issues, please contact Melissa Proctor (melissa@millerproctorlaw.com) or Peggy Chaplin Louie (peggy@millerproctorlaw.com) at Miller Proctor Law PLLC (https://millerproctorlaw.com ).