When it comes to a new free trade agreement with Japan, speed is of the essence. That was the primary message from a dozen representatives of some of the largest farm and food groups and a couple food companies to a panel of Trump administration officials today as the U.S. Trade Representative prepares for talks with the Asian country next year.
U.S. producers of meat, grains and other commodities stressed at the hearing they stand to lose significant market share to European, Australian and South American countries already closing trade pacts with Japan, and the U.S. needs equal treatment.
The U.S. exported $12 billion worth of ag commodities like wheat, corn, dairy, beef, pork and sorghum to Japan last year, making it the fourth largest foreign market for U.S. farm goods. For beef, Japan is the most valuable market for U.S. exports, but Australia now has a major edge over U.S. shippers due to an FTA with Japan that has brought tariffs down sharply.
Had the U.S. joined the Trans-Pacific Partnership with Japan and 10 other Pacific Rim countries, Japanese tariffs on U.S. beef would have also begun falling. That didn’t happen, though, because President Donald Trump pulled the U.S. out nearly two years ago shortly after taking office.
The National Cattlemen’s Beef Association “strongly supports prioritizing and expediting negotiations for a U.S.-Japan Trade Agreement,” NCBA President Kevin Kester told the administration panel convened specifically for the private sector to express priorities in a future trade pact. “The U.S. beef industry is at risk of losing significant market share in Japan unless immediate action is taken to level the playing field.”
U.S. wheat farmers could also lose Japan as a key export market if the two countries do not agree to a tariff-reducing free trade pact soon, U.S. Wheat Associates President Vince Peterson testified today.
“We have invested countless hours and millions of hard-earned farmer dollars and federal export market development program funds building this market,” Peterson said. “During that time, the Japanese milling industry has become an indispensable partner for U.S. wheat farmers. All that is at risk without a U.S.-Japan agreement.”
The risk centers on the fact that Japan is set to lower its tariffs on Australian and Canadian wheat because all three countries are in the newly renamed CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which is set to kick off on Dec. 1. Under the 11-country trade pact Japan cut the tariffs that its flour millers pay for Australian and Canadian wheat in half. Gradually those tariffs will drop from the equivalent of $85 per metric ton, about a 47 percent reduction from $150 per ton.
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