The United States is following the European Union’s lead in negotiating a free trade agreement with Japan. Almost two years ago the U.S. withdrew from the Trans-Pacific Partnership (TPP). While Japan remains in the deal, the U.S is looking to draft an agreement with the nation. One of the key objectives is duty-free status for apparel and textiles, reports Sourcing Journal Online.
Following The EU’s Lead with Japan
In July the EU signed a free trade agreement with Japan. The agreement opened up the opportunity for a 20 billion euro ($22.8 billion) boost in trade. According to Sourcing Journal Online, the EU Commision stated,
“The EU-Japan trade agreement would not only boost the EU’s economy. It would also strengthen Europe’s leadership in shaping global rules according to our values. Like us in Europe, the Japanese believe that the challenges our societies are facing today cannot be solved by protectionism or by turning our back on the world.”
Once the EU-Japan Economic Partnership Agreement reaches the 10-year mark, the nations will trade freely without tariffs. This partnership is setting a new standard for global trade as well as sustainability, worker safety, and consumer protection.
Negotiations to Begin Early 2019
President Donald Trump and Prime Minister Shinzo Abe are ready to sit at the negotiating table as early as January 2019. The nation in the Pacific is the U.S’s “4th largest goods trading partner” stated the United States Trade Representative.
In 2017 the U.S had $283.6 billion in trade with Japan. The U.S exported $114 billion of goods and services and imported $169.5. As a result, there was a 0.1% increase in the deficit from 2016, totaling $71 million. The U.S hopes to lower or eliminate the trade deficit with the new free trade agreement.
Regarding apparel and textiles, the U.S. imported $483.96 million worth of clothing and textiles from Japan in 2017. In the same period, the U.S. exported $568,501. Ultimately, both parties agree tariff and non-tariff barriers will further strengthen trade across all sectors.