The U.S. and Japan have agreed “in principle” on a large trade deal that will be finalised next month on the sidelines of the UN General Assembly in New York.
U.S. President Donald Trump said this on Sunday in Biarritz, France, venue of the G7 Summit.
Japanese Prime Minister Shinzo Abe met with Trump twice during the summit and confirmed that the deal was reached but final language still needed to be ironed out in the coming weeks.
The deal will include agriculture, industry and digital trade.
The U.S. noted that Japan will buy excess corn that China had promised to purchase but then dropped as part of the trade war.
In all, the U.S. says the deal will open up markets for 7 billion dollars in trade.
“It’s very good news for our farmers and ranchers, but it’s also good news for those who work in the digital e-commerce space, where it is the gold standard of an international agreement,” said U.S. Trade Representative Robert Lighthizer.
Trump and Abe have been building their bilateral relationship over the past two years and are seen has having grown very close.
A trade deal between the largest and third-largest economies in the world would be a positive gain from their relationship, especially given the collapse of U.S. negotiations with China and the ratcheting-up of the trade war between Beijing and Washington.
Trump had rejected the planned Trans-Pacific Partnership (TPP) that former president Barack Obama had negotiated with nations in that region, leaving a potential vacuum.
The TPP was meant to help the U.S. balance against China and forge partnerships to keep nations out of Beijing’s orbit.