US President Donald Trump and Japan's Prime Minister Shinzo Abe agreed on principles of a bilateral trade deal on the side-lines of the G7 summit in the French resort town of Biarritz, on Sunday August 25th, AFP reported.
"It's a very big transaction," Trump said after talks with Abe. "It involves agriculture, it involves e-commerce. It involves many things. We've agreed in principle," he added.
Abe affirmed that the two nations had "successfully reached consensus" after "intense" negotiations.
Trump and Abe said they had been looking towards a formal signing during the UN General Assembly in New York next month.
However, Abe insisted, "We still have some remaining work that has to be done… mainly finalising the wording."
This agreement will especially benefit US farmers, a politically important group for Trump for re-election in 2020, US Trade Representative Robert Lighthizer said.
Lighthizer added some tariffs would be removed as a result of the deal, but not those already imposed on Japanese cars.
Trump also said the tariffs were "staying the same" but would not go up.
Washington maintains close relations with Tokyo, but the US president has frequently claimed that Tokyo has an unfair advantage in bilateral trade.
According to the agreement, Japan will place tariffs on US agricultural products up to levels that apply to members of the Trans-Pacific Partnership (TPP) pact, Japan's public broadcaster NHK and major Japanese dailies reported.
Both leaders agreed Japan will cut tariffs on US beef and pork to TPP levels, but will not set new quotas for butter and skimmed milk, NHK said, citing unnamed sources.
Japan has affirmed that the extent of the opening up of its agricultural market would be within the concession it had made to members of the TPP pact.