As one of the wealthiest and most populous nations in Asia, Japan is a magnet for food and ag exporters, including the United States. Three groups that promote U.S. farm exports say the upcoming U.S.-Japan trade talks are a chance to pick up the pace against Australia, Canada, and the EU, which will benefit from free trade agreements with Japan.
Japan says it will not offer agricultural concessions beyond those guaranteed in pacts such as the revived Trans-Pacific Partnership. Even so, the country’s potential is alluring. A 2014 USDA analysis said there could be “relatively large gains in those areas where protection is currently high, e.g., rice, beef, and dairy products” under the TPP. Japan was to be the jewel of the TPP, expected to account for 70 percent of increased ag imports within the trade bloc.
The negotiations could mark the start of a long-promised push by the Trump administration to write bilateral trade pacts that will be more favorable to U.S. interests than multinational agreements. The United States and South Korea signed a revised trade pact this week; it maintained the previous terms for agricultural trade — enough to be called a success in some quarters. Otherwise, the administration has been consumed in negotiating the new NAFTA.
Currently the No. 4 customer for U.S. food and ag, Japan is a leading importer of U.S. wheat, corn, beef, and pork. Export promoter U.S. Wheat Associates said the revived TPP would award lower tariffs to Canada and Australia, eventually sidelining U.S. wheat. “That is a result no U.S. wheat grower can afford, and we are hopeful that the administration will address this problem as an early achievement in the negotiations.”
Besides the TPP, Japan has signed a trade agreement with the EU. Losses for U.S. beef and pork exporters would top $1.1 billion by 2023, says an analysis by the U.S. Meat Export Federation. “We would be the only red-meat supplier that would be on the old terms,” said Joe Schuele, a USMEF spokesman, on the “Agritalk” program. Asked by host Chip Flory if the United States was late to the party, Schuele replied, “Possibly.” The revived TPP and the EU-Japan agreements are unlikely to take effect before mid-2019.
President Trump withdrew the United States from the TPP soon after he took office, fulfilling a campaign promise.
“Since withdrawing from the Trans-Pacific Partnership, the NCGA has urged the administration to re-engage Japan in negotiating a trade agreement. The announcement that talks will begin is welcome news to American corn farmers,” said Kevin Skunes, president of the National Corn Growers Association.
Japan is the No. 2 market for U.S. corn, after Mexico. “Positive movement with Japan related to trade and our countries’ relationship as a whole is critical to the U.S. grains sector,” said the U.S. Grains Council.