U.S. needs Japan in TPP talks

Japan's elections on Dec. 14 will be important to determine if the country will be adopting a pro-trade agenda.

During a hearing Tuesday, Secretary of Agriculture Tom Vilsack was questioned at what point does the U.S. decide to conclude the Trans Pacific Partnership talks without Japan because of its insistence on maintaining its desire to exclude sacred commodities.

Vilsack replied he still believes there is a “pathway to a solid, quality high standards agreement that includes Japan.”

The secretary said perhaps more worrisome is China’s actions to encourage Asian countries to disregard TPP and focus on an agreement that China would help to fashion. Vilsack warned an agreement with China in the driver’s seat would not address the multitude of issues the U.S. hopes for under a “high standards agreement.”

“So we don’t want to concede this opportunity to China and we don’t want to be left out of agreements that will clearly take place if we can’t conclude TPP. So I think we have to continue to be vigilant, especially with the Japanese,” he said.

Vilsack also said Canada has not stepped up as much as they ought to have, given what’s at stake within the negotiations. “They have refused up to this point to even enter into negotiations,” Vilsack said. “Candidly, I think it’s ill-advised and it’s unfortunate. And it may very well be that if that attitude persists, that you could find an agreement that does exclude a country, but I don’t believe at the end of the day it will be Japan.”

With 40% of the world’s gross domestic product (GDP) covered by the TPP talks, Japan’s coming elections have implications that may shape the world’s economy for years to come.

“If it is done in a forward looking manner, the TPP will be a game changer for U.S. agriculture,” said U.S. Grains Council chairman Ron Gray. “We realize that the politics of trade are tough, in the United States as well as in a number of other countries. That’s why the upcoming elections in Japan are so important.” 

Japan’s parliamentary elections will be held Dec. 14. Negotiations on TPP have been stalled by delays in reaching an agreement on bilateral U.S.-Japanese issues, especially on agricultural trade.

“Obviously TPP isn’t the only thing Japanese voters will be considering, but this is an important opportunity to strengthen the pro-economic growth and pro-trade coalition in a key negotiating partner,” Gray said. “U.S. farmers and agribusinesses have a vested interest in the outcome.”

TPP is a comprehensive trade and investment agreement that is currently under negotiation by 12 Pacific Rim countries with a combined population of 800 million. The TPP countries currently account for almost 40% of U.S. agricultural exports.

A recent United States Department of Agriculture (USDA) report underscored the importance of TPP to U.S. agriculture. U.S. farm exports to the other 11 TPP partners could rise by more than 5% if a high-quality agreement can be reached, with exports to Japan among the biggest opportunities.

“We understand that some sectors of Japanese agriculture are worried about increased competition,” Gray said. “But there are also real opportunities for Japan. Japan has one of the highest quality food systems in the world and is universally recognized for food safety.

“Japan can be an export platform for high-quality, value-added food products to the rest of Asia. That has worked for Japan in manufacturing, and it can work again here. Since a major expansion of Japanese food exports would require more imported ingredients, including feed grains, there is a real opportunity for the United States as well.”

Economic growth in Japan has been sluggish in recent years, and tax and economic issues dominate the current political debate. While the political campaign has not focused heavily on TPP, a stronger pro-trade policy helps support economic growth. The election results may be a key indicator of Japan’s readiness to address tough political issues like trade liberalization.  

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