Japan and the United States on Monday formally signed a bilateral trade agreement that is expected to put American farmers back on a level playing field with their international rivals through reduced tariffs on agricultural products.

The deal will be a "game changer for our farmers and our ranchers" providing them with "significantly enhanced access to a critical foreign market," U.S. President Donald Trump said prior to the signing of the pact between Japanese Ambassador to the United States Shinsuke Sugiyama, and U.S. Trade Representative Robert Lighthizer, at the White House.

The agreement was reached late last month between Japanese Prime Minister Shinzo Abe and Trump, and their countries have since been working to finalize the text of the treaty. The United States hopes the pact will be effective from Jan. 1.

Trump has sought to reduce his country's chronic trade deficit with Japan, and mollify U.S. farmers bearing the brunt of the abrupt U.S. withdrawal in 2017 from the Trans-Pacific Partnership regional free trade pact that involved countries such as Japan and Australia.

The agreement will see Japan eliminate or reduce tariffs on an additional $7.2 billion of U.S. food and agricultural products, according to the U.S. Department of Agriculture. In 2018, Japan imported $14.1 billion of such goods from the U.S., and $5.2 billion were already duty free.

The move has prompted Japanese farmers to claim that cheaper agricultural products will flood a domestic market already subject to the 11-member TPP and a free-trade agreement between Japan and the European Union.

The Japanese government said the exclusion of rice from tariff cuts or eliminations is a victory for Tokyo, but it still plans to compile measures to boost the competitiveness of its agriculture sector.

"We will take all possible measures to address the concerns of farmers," Abe told lawmakers in the Diet.

Abe also said, "We are about to see U.S. tariffs on a wide range of our country's industrial goods reduced or eliminated." But the bilateral deal may be a mixed bag for Japanese automakers in the key U.S. market.

The United States will retain its 2.5 percent tariff on autos from Japan, a tax that would have been eliminated had the United States remained in the TPP. However, the Trump administration did refrain from imposing higher auto tariffs on Japan, having earlier threatened to introduce these for national security reasons.