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Japan to win trade concessions on US rice imports, but hits wall on auto tariffs

In this June 28, 2019 file photo, Prime Minister Shinzo Abe, third from right, and U.S. President Donald Trump, second from left, and their teams sit down for talks in Osaka's Suminoe Ward. (Pool photo)

TOKYO -- The amount of U.S. rice that will be allowed to enter Japan tariff-free under a bilateral trade deal will be much less than that set under the multilateral Trans-Pacific Partnership (TPP), which President Donald Trump pulled out of in 2017.

Under the TPP, which was implemented by the remaining 11 partners at the end of 2018, Japan would have accepted the import of as much as 70,000 metric tons of U.S. rice per year. However, it was revealed on Sept. 15 that negotiators for a Japan-U.S. trade deal are looking to settle on a much smaller figure -- apparently with Trump's blessing.

Meanwhile, tariffs on U.S. wine imports to Japan look likely to be reduced gradually to zero over five to seven years, about the same as the eight-year time frame under the TPP. The cut is eventually expected to reduce Japanese shelf prices of U.S. wines by about 10%.

The two sides are aiming to have a deal ready to be signed by Trump and Prime Minister Shinzo Abe at a summit in the United States in late September.

The Japanese government pushed for a reduction in the volume of tariff-free U.S. rice from TPP levels to protect domestic producers. American negotiators initially sought to retain the 70,000-ton figure, but the issue appears to have been a low priority for the Trump administration as most U.S. rice is grown in California, a Democratic stronghold.

However, Washington did push back hard on automobiles by outright refusing Tokyo's demand the U.S. cut duties on Japanese vehicle imports. It looks likely the Abe administration will play up its negotiating gains in rice, saying that "both Japan and the U.S. made compromises" to curry favor with its electorate.

(Japanese original by Shuichi Kanzaki and Kenji Shimizu, Business News Department)

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