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US-Japan working to sign trade deal but issues remain

It’s unclear if a US-Japan trade deal will be signed this week after President Trump’s threatened to put tariffs on cars from Japan.

Ohio State University’s Ian Sheldon says any trade deal with Japan will be good news for the industry, but he expects the deal to be modest.

“It’s not going to be a full-blown free trade agreement,” he says. “Free trade agreements cover the whole gamut of products. They cover non-tariff barriers to trade, and they might cover things like exchange rates and dispute resolution mechanisms.”  

He says the Trans-Pacific Partnership, for example, would have included rules on bilateral investment agreements, intellectual property, and state-owned enterprises.

Sheldon says the US is missing out on additional markets available under the agreement now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

“Assuming that trade agreements are a zero-sum game, in other words there’s only a winner and there has to be a loser, misses the point,” he says. “Both sides have to gain something from the agreement for them to sign the agreement. So, I think the US might be putting off other countries being willing to negotiate with the current administration.”

Sheldon is the Andersons Chair of Agricultural Marketing, Trade, and
Policy at Ohio State University.