ON-THE-RECORD PRESS GAGGLE
BY AMBASSADOR LIGHTHIZER
ON THE U.S.-JAPAN TRADE AGREEMENT
InterContinental New York Barclay
New York, New York
1:37 P.M. EDT
AMBASSADOR LIGHTHIZER: So, I'm here to describe the U.S.-Japan agreement and the digital trade agreement. I would say, first of all, just by way of a background, Japan is our fourth leading trading partner. They're our third leading trading partner in agriculture. We ship about $14 billion worth of agricultural products.
The nature of this agreement generally is they're giving us certain access and agriculture, and we're giving them certain additional access on industrial tariffs.
And then, we have this digital trade separate agreement. The digital trade agreement is very much like the USMCA. It's the gold standard. It's, you know, the best quality agreement you can have. There's about $40 billion, as the President said, worth of digital trade going two ways.
So, I don’t know what else with it. Japan is our biggest market for beef. It's our biggest market for pork. It's our biggest market for wheat. And then, there are a lot of other products that are affected by this agreement. So --
Q Ambassador, it doesn’t sound like cars are part of this agreement. Will that be in the next stage? Or what is the plan for that?
AMBASSADOR LIGHTHIZER: Well, cars are not. It certainly is the Japanese ambition to have cars -- car tariffs be discussed. But at this point, it's not part of this agreement.
Q And do you want to have that discussed as well?
AMBASSADOR LIGHTHIZER: And as you say, we have a second stage. We have a second stage where we go to a -- (inaudible) entire FTA, hopefully.
Q Are you taking the threat of auto tariffs off the table in order to make progress toward the final deal?
AMBASSADOR LIGHTHIZER: Well, if you look at the -- I think it’s the fourth paragraph of the agreement, it says, "Assuming we operate in good faith, no one will do anything inconsistent with that." So at this point, it certainly is not our intention or the President's intention to do anything on either side, on 232, on Japan.
Q Can you talk about the timeline? This was described -- well, it's obviously sort of the first stage of this. When do you expect to see some of the economic impacts of this particular piece, the digital and ag part of this trade agreement with Japan go into effect?
AMBASSADOR LIGHTHIZER: So that’s a great question. Here's what I -- what will happen. I will be able to proclaim ,under TPA authority, our tariff reductions. The Japanese are going into an extraordinary session of the Diet. They will pass it -- presumably, they'll pass it in October or November.
The effects will be in January 1. That’s when the tariffs will come down. If we had not done this, the United States agriculture would be at a disadvantage to TPP countries and some European countries. This gets us equal or better than those people.
So I think, in agriculture, you're seeing the impact will come very quick because these people are a little bit out. And it will be a profound effect because had you lost these markets, they would’ve been lost for a long period of time.
The digital trade stuff, we expect that trade to continue and to grow. What we've really done is lock in the best possible standards you can have.
So I expect the effect to be very soon. The way this will work -- four months after implementation. For the first four months, we will consult on this agreement to make sure we have it right. And then, after that, we'll begin the negotiations on the new agreement. And that will take some time. These agreements take time.
But what we really wanted to was get agriculture taken care of, get e-commerce taken care of, and in return, maybe do some tariffs on industrial.
Q Four months from now you said new talks (inaudible) --
AMBASSADOR LIGHTHIZER: Well, no, it's four months from entering into enforcement, which is January 1. So I expect you’ll see -- you know, end of April, beginning of May, we’ll have a -- we’ll be getting (inaudible).
Q And those are the negotiations fof phase two?
AMBASSADOR LIGHTHIZER: And that will be phase two. That would be leaning towards an FTA between the United States and Japan.
Q Okay. And then, just broadly, I know the mantra of this administration has been: It’s better to broker bilateral trade deals.
It appears the agricultural segment of this -- it’s very similar to what TPP had, but rice isn’t included. So, I guess, what would you say to critics that maybe the bilateral approach didn’t get as much as you had in TPP?
AMBASSADOR LIGHTHIZER: Well, I would say, first of all, you have to look at it two ways. One, what did we pay for it? And we paid substantially less than has been paid in TPP. It was extremely -- this is most of what really was accomplished in TPP for Japan.
And remember -- remember -- so I go back through this again. There are 11 countries in TPP. Of those, we already have FTAs with six of them. Of the other five, 95 percent of the GDP is in Japan, and the biggest thing we were getting out of that was agriculture. So we got -- the vast majority of it, we paid much, much less than they did in that. We didn’t, for example, include auto tariffs or auto-part tariffs.
So I would say this is really proof that the President’s approach is correct; that you can get far, far better deals if you deal on a bilateral basis, if you’re the biggest economy in the world. Right now, I would suggest that, if you weren’t, you might want another approach. But for us, clearly, bilateral approach is better.
Q Yeah. And then, one other question: How do you plan to enforce this agreement and make sure that the Japanese live up to their commitments? Are tariffs going to be used as a threat to ensure enforcement?
AMBASSADOR LIGHTHIZER: Well, at this point, I’m not worried. They will pass this through their Diet in October or November. That will be the law. It’s not a situation where we’re kind of just hoping and praying that somebody does something. And I will proclaim ours, so they’ll have the same kind of an insurance.
In terms -- in terms of the digital part of it, it will go through -- right now, we have good rules. We’ll go through a consultation process, and we’ll do what is necessary to make sure that it’s enforceable.
But on the tariff side, they will have passed the law. So it’s not a situation where we’re -- and the law will, in some cases, phase out tariffs. It’ll -- but it’ll be in the law right now.
Q Ambassador, you said earlier that you had confidence that USMCA will come up for a vote. What gives you that confidence? And do you expect this will happen in the next year? Six months? I mean, what kind of timeline --
AMBASSADOR LIGHTHIZER: Well, I’m not -- I mean, I don’t want to -- look, the power to bring up bills before the Congress rests squarely with the Speaker, which is where it should. I would say, “Why do I have confidence?” I would say, one, it’s an extremely good agreement. Number two, it affects 1.4 trillion dollars’ worth of our economy and literally millions of jobs. Number three, if it did not pass, it would be a catastrophe for our economy. It would be bad, in terms of our dealing with other countries.
So I think, on the merits, it’s a really, really good bill. I would say the trade agreement is, by far, the best trade agreement we’ve ever had. The Democrats have asked for specific and sensible things that they want assurances on. We should modify this legislation to accommodate their needs. This should be a bipartisan bill. It should be something where there are wins for the President and there are wins for the Speaker and for the Democrats.
We expect to get there. We have a robust process. I’m meeting again on Friday with the people that she has designated, and I think everybody is operating in good faith and on the merits. It’s not all about politics in Washington, right? On the merits, this is demonstrably good for the people of the United States. And I think, for that reason, it will pass. I believe in the system, and I think we're going to have a bilateral win, and I think it's going to be good for the economy, for the American people, for Republicans, but also good for the Democrats. And it will be their bill too. It will be modified to accommodate their needs.
AIDE: Let’s do one more.
Q Can you elaborate: Earlier, the President said a China deal could come sooner than expected. Can you elaborate on what the President was saying and what the -- the status of that -- those discussions are?
AMBASSADOR LIGHTHIZER: Well, we'll see. We had -- as you know, we had staff meetings -- or deputy-level meetings -- not really staff meeting; deputy-level meetings last week. We have communication back and forth, the Secretary of Treasury and I do. And the Vice Premier, we expect to be here in early October. So we’ll see.
You know, we think that there's a variety of things that are doing. At this stage, what you want to do is have confidence building and show goodwill, and I think we're doing that. And we'll see how it works out. You know, I’m not going to pre-judge what happens on that -- on that deal.
The United States -- the President wants a deal, if he can get a good deal. If he doesn’t, we have a tariff policy in place, and that’ll be -- you know, that’ll be an improvement over the situation before the President got here.
So, either way, we have a good plan. And we’ll see what happens.
Q Ambassador, you have all these key issues on your plate: this Japan deal, China trade, the USMCA. Do you believe that this impeachment inquiry the Democrats have launched is a distraction from that?
AMBASSADOR LIGHTHIZER: Oh, I don’t --- I don’t have anything to do with anything like that. I don’t -- I find my own lane so wide and so deep that if I stay in it, I’m going to be fine.
Q Do you feel any urgency on a China trade deal? Do you want to get it done by the election? Do you think it will be done by the election next year?
AMBASSADOR LIGHTHIZER: I -- my instruction are, if you can get a great deal for the American people, do it; if you can’t, we have a perfectly adequate situation.
But thank you all very much. This really is a big deal -- this Japan deal. I really hope you all focus on it. It gets a -- it’s hugely important, particularly for American agriculture and for digital farmers.
So thank you all very much.
END 1:47 P.M. EDT
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