US President Donald Trump (right) meets with Japanese Prime Minister Shinzo Abe at the Lotte New York Palace hotel on the sidelines of the United Nations General Assembly, Sept 26, 2018, in New York. (EVAN VUCCI / AP)

US President Donald Trump announced he has reached an agreement with Japan Prime Minister Shinzo Abe to open trade talks between the two nations.

Trump said he expected the talks will come to a “satisfactory conclusion” as he spoke to reporters at the beginning of a meeting with Abe in New York. “It can only be better for the United States, because it couldn’t get any worse than what has happened over the years,” Trump added. Both leaders are attending meetings this week at the United Nations.

The US wants to expand access for its automobile exports to encourage more production and jobs in America. In agricultural goods, Japan won’t offer better conditions than already exist in its other trade agreements, according to a joint statement by the two nations. More access to Japan’s market could help US farmers.

In agricultural goods, Japan won’t offer better conditions than already exist in its other trade agreements, according to a joint statement by the two nations

Abe resisted for almost two years the push to start bilateral trade talks with its second-largest trading partner, but Trump’s threatened auto tariffs forced him to reconsider. The two countries have agreed that sanctions on auto exports won’t be applied while the talks take place, Abe told reporters.

Bilateral Trade

The US and Japan want to address bilateral trade in goods during the first phase of the talks over the next few months, US Trade Representative Robert Lighthizer said in a conference call with reporters on Wednesday. The second stage will focus on a deal that would require congressional approval. Lighthizer said he will seek trade-negotiation authority that would give Congress a yes-or-no vote on a final agreement.

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Abe had spent political capital on negotiating and finalizing the 12-nation Trans-Pacific Partnership that Trump withdrew from in the first days of his administration. The Japanese leader has repeatedly tried to convince Trump to return to TPP, which the 11 remaining nations are planning to implement in 2019.

Japan’s farmers, a key constituency for Abe’s ruling Liberal Democratic Party, remain protected to some degree under TPP.

Trade Resistance

Abe told reporters late Wednesday in the US that he was seeking a win-win relationship, and increased trade and investment with the US.

“Since President Trump took office, Japanese companies have decided on a further US$20 billion in investment in the US, and this will result in 37,000 new jobs,” he said. “This is more than any country in the world and it is the result of flying the flag of free trade,” he added. “We must absolutely not turn back the clock.”

The US and Japan also said they are working together with the European Union to fight “non-market oriented policies and practices by third countries” and advance reforms at the World Trade Organization, according to Wednesday’s statement.

READ MORE: Japan's June trade surplus jumps, while US dealings slip

The Commerce Department has until February to determine whether auto imports represent a US security risk, which could lead Trump to impose tariffs and quotas.

Auto Hearing

In Washington on Wednesday, the Senate Finance Committee held a hearing with general agreement among senators from both parties and industry witnesses that auto tariffs – on top of metal import duties – would only raise costs that hurt suppliers, manufacturers, dealers and consumers.

“The auto industry is not seeking protection and certainly not asking for additional tariffs, which will harm manufacturing in the US, harm our workers and most importantly, harm US consumers,’’ said Rick Schostek, executive vice-president of Honda North America. “These tariffs will ripple across all aspects of the auto industry and the broader economy.’’

Senators questioned imposing auto tariffs on the grounds of protecting national security, especially with the US economy already being affected by duties in Chinese imports and other administration trade actions.

“Tariffs on autos and auto parts are not going to help us achieve any of these things,’’ said Republican Senator Orrin Hatch of Utah, the committee chairman.