As for the history, elements, and outlook for the new U.S.-Japan trade agreement, we are bound to present these from different perspectives in future entries. Here it is enough to recall a few key dates and developments.
January 23, 2017
– President Trump signs an executive order, pulling the United States out of the Trans-Pacific Partnership Agreement. As Representative Smith observed, “Both presidential candidates campaigned against [TPP in 2016].” Mr. Smith said he himself had been a supporter of TPP but, once he realized that it was not going to happen – not with America in it – he introduced a resolution in Congress calling for a new agreement with Japan.
December 30, 2018
– CPTPP enters into force for six of the 11 remaining TPP countries, including Canada, Australia, and New Zealand, all major competitors of the United States in agriculture. CPTPP or the Comprehensive and Progressive Trans-Pacific Partnership is the successor agreement to TPP, which came to fruition under the leadership of Japan. Because of it, agricultural products from Australia and Canada, for example, now have better access to the Japanese market than U.S. products. The need to address those disparities was a strong incentive for some new arrangement between the United States and Japan.
August 25, 2019
– On the margins of the G7 meeting in Biarritz, President Trump and Prime Minister Abe of Japan announce that they are working on an interim bilateral agreement, one that they indicate will conclude during the September meeting of the U.N. General Assembly.
September 25, 2019
– In New York for the U.N. General Assembly meetings, President Trump and Prime Minister Abe sign a joint statement on two agreements – The United States-Japan Trade Agreement and the United States-Japan Digital Trade Agreement – whose outlines have been agreed upon. In that statement, the two leaders declare,
We share the desire that these agreements will be signed at the earliest possible date and enter into force in the very near future, following the completion of our respective domestic procedures.
Thus, while it was not in fact the final agreement or agreements that were signed last month, the substance of those agreements is clear, and summaries are available on the USTR website.
Concluding Assessment
The agreements announced by President Trump and Prime Minister Abe have met with some skepticism, in part because we are still waiting for the final versions. They have also been criticized for not going far enough. The latter argument would be answered, of course, by a full, comprehensive agreement between the United States and Japan, and the two leaders have said they intend to negotiate such a broader deal. Finally, there is the question of momentum and the importance of getting an agreement done.
With respect to the two agreements mentioned in the Trump-Abe statement of September 25, we’ll go out on a limb. We expect those agreements to be signed fairly soon and to enter into force early in 2020 if not before. And the value of those agreements goes beyond their literal provisions. Responding to an early question last week, Congressman Smith said, “There is benefit to showing that we can get some things done.” We think that is right.
The Administration does not intend to submit either of the new Japan agreements to Congress. The trade agreement’s provisions will be handled through existing authority, and the digital trade agreement will be the subject of an executive agreement. So, when it comes to the demonstration effects, the real test is not the Japan agreements, important as they are, but the new NAFTA or USMCA. The fate of that all-important North American agreement rests with Congress and most particularly with the Speaker of the House. If she allows USMCA to come to the floor for a vote, that will give new impetus to other negotiations that will require implementing legislation from Congress, including a comprehensive agreement with Japan. If she does not allow a vote on USMCA, then the incentive for the Administration will be to do only what can be done without going through Congress.
