Japan's leading automakers welcomed the new North American trade deal this week, after the US and Canada reached a deadline hour agreement on Sunday after months of impasse.
The US and Mexico had already reached a trade accord in August and Sunday's agreement meant Canada could remain a key member of the North American trade block which was originally put in place in 1994.
Japanese automakers have vehicle plants in all three countries and the deal with Canada means that vehicles can continue to be "freely" traded across North America.
Both Canada and Mexico have each agreed to an annual 2.6m tariff free vehicle export quota to the US which is well above the current quota. Minimum regional local content levels have been raised to 75% and minimum hourly wages for auto workers have also been raised.
Japanese relief may be short lived, however, as a trade deal between Tokyo and Washington has yet to be agreed. In particular focus will be Japan's US$69bn annual trade surplus with the US, of which US$40bn is automotive.
Washington is considering slapping a 25% tariff on auto imports from Japan on national security grounds although it has agreed to put such a move on hold until bilateral negotiations are completed. Japan will likely agree to annual duty free export quotas to the US.
Either way, any protectionist move will likely trigger a further migration of vehicle production from Japan to North America, and to the US in particular.