Lack of Japan-U.S. Trade Deal Document Causes Worry; 2 Govts Put Differing Spins on Details of Agreement

Yomiuri Shimbun

2 days ago

Concerns are mounting after it became apparent that there is no joint document outlining the tariff agreement between Japan and the United States that was reached in negotiations with the administration of U.S. President Donald Trump.
The Japanese government has stated that it does not plan to create such a document in the future. However, the absence of such a document has already revealed discrepancies in explanations and perceptions between Japan and the United States, potentially fueling future disputes.
At a press conference on Tuesday, economic revitalization minister Ryosei Akazawa, who led the Japanese delegation in the Japan-U.S. trade negotiations, emphasized, 'We want to see tariff reductions implemented quickly, rather than focusing on creating an agreement document.'
His comment stems from concerns that a lengthy process to create a formal agreement document could delay the implementation of the Japan-U.S. accord.
Fearing the agreement's terms could be overturned — particularly the auto tariff reductions Trump had already approved — a Japanese government official stated: 'If we were to create a document, we would need President Trump's approval. Japan might also face new demands, and that would open a whole new can of worms.'
However, the United States has agreed to a trade deal with the United Kingdom and is expected to issue a joint statement over trade agreements with the European Union.
In contrast, with no formal agreement document, Japan and the United States each released their own summaries, which revealed discrepancies in their explanations and understandings of the agreement.
Trump asserted that Japan would invest $550 billion (about ¥81 trillion) in the United States, and the United States would retain 90% of the profits from this investment.
Meanwhile, Japan clarified that this sum represents merely a 'framework' encompassing investments, loans and loan guarantees by government-affiliated financial institutions. Akazawa further specified that direct equity investment would account for only 'about 1%-2% of the $550 billion,' suggesting that the investment risk for Japan is minimal.
Regarding auto tariffs, a key Japanese priority in the tariff negotiations, Japan emphasizes the reduction from 25% to 15%. However, this reduction is not explicitly stated in the public documents released by the United States.
The United States also explicitly stated that Japan would purchase 100 Boeing aircraft, as well as make additional annual purchases of U.S. defense equipment, totaling billions of dollars.
However, a Japanese government official countered, 'Many of these purchases are already planned, so there are almost no new ones.'
'We plan to introduce them, taking into account the airlines' existing purchase plans,' said Land, Infrastructure, Transport and Tourism Minister Hiromasa Nakano at a press conference after the Cabinet meeting on Tuesday.
In reality, both Japan and the United States are offering explanations that favor their own countries, which has raised concerns among observers about the absence of a formal document.
'It is unthinkable not to create a document during negotiations,' asserted Meisei University Prof. Masahiko Hosokawa. The former Economy, Trade and Industry Ministry official, who has experience with U.S. negotiations, added: 'If Japan leaves the U.S. side's self-serving interpretations, such as those concerning investment in the United States, unchallenged, it will be taken as tacit acceptance, which could lead to future friction and risks.'
Takahide Kiuchi, an executive economist at Nomura Research Institute Ltd., emphasized the importance of a formal document for transparency, citing the risk of compromising national interests.
'Even if clarifying the detailed framework reveals discrepancies between the two countries that could lead to the collapse of the agreement, a formal document should still be created,' he said.