USTR keeps working on Japan

USTR keeps working on Japan

Bilateral trade agreement between Australia and Japan could limit TPP goals on ag market access.

TRADE negotiators from the U.S. and Japan finished three intensive days of talks in Tokyo, Japan, earlier this month without reaching any substantive agreement to resolve differences on automobile issues and access to agricultural products as part of the Trans-Pacific Partnership (TPP) negotiations.

The hope was that the meeting could help advance talks ahead of an April 24-25 summit in Tokyo between President Barack Obama and Japan's Prime Minister Shinzo Abe, although at this point, the chance for any deal seems slim.

Acting Deputy U.S. Trade Representative Wendy Cutler met with Ambassadors Hiroshi Oe and Takeo Mori of Japan April 15-17 for additional TPP negotiations focusing on agriculture market access and motor vehicle issues.

USTR Michael Froman reported, "We made some progress, but we still have gaps between us," he said of his April 8-10 meeting with his counterpart, Akira Amari.

Complicating matters is a bilateral trade agreement Australia and Japan reached this month, which has made U.S. agricultural groups concerned over the tariff-reducing goals of TPP. The trade agreement partially lowers tariffs for Australian beef and some dairy products but exempts rice from tariff reduction.

Japan and Australia are both involved in the TPP discussions, and U.S. agricultural groups have been pressing Japan to increase access to its agriculture market.

"This development only pushes the high-standing ideals of TPP further out of reach for all countries involved," National Cattlemen's Beef Assn. president Bob McCan said.

A guiding principle of TPP, which is viewed as a comprehensive, 21st-century agreement, is for member countries to eliminate all tariffs, according to U.S. agricultural groups.

The U.S. has called on Japan to make more concessions but continues to meet with resistance. Japan is seeking to declare rice, wheat, barley, beef, pork, dairy products and sugar as sensitive products.

Reaching a bilateral deal with Japan is seen as crucial to concluding the broader, 12-country TPP negotiations later this year.

Australia did not get tariff eliminations on a number of important products, but a clause in the agreement requires Japan to provide the same access to Australia that it provides to other nations. Should the U.S. get better access to Japan than the TPP negotiations provide, Australia would get that same access, the National Pork Producers Council (NPPC) noted in a statement.

NPPC president Dr. Howard Hill said U.S. farmers and ranchers likely would agree with House Ways & Means Committee chair Dave Camp (R., Mich.), who said if Japan is not ready to participate in a high-standard, 21st-century agreement such as TPP — which means eliminating tariffs — then it needs to exit the negotiations.

"We support the efforts of Ambassador Froman and our trade team to get the same result from Japan that we have gotten from every other U.S. (free trade agreement) partner: elimination of virtually all tariffs," Hill said.

Adding to the pressure, a bipartisan draft letter is being circulated in the House to urge USTR and the U.S. Department of Agriculture not to make a TPP deal with Japan unless it eliminates agricultural tariff and non-tariff barriers — a position U.S. agricultural groups also have taken.

Japan wants exemptions for 586 tariff lines, or 11% of its tariff schedule. In the 17 free trade agreements the U.S. has concluded since 2000, only 233 tariff lines total have been exempted from going to zero.

During a Washington International Trade Assn. discussion April 10, former U.S. trade negotiator Craig Thorn, who is now a partner at the agricultural policy firm DTB Associates, said a deal that eliminates most of Japan's tariffs on agricultural products is still possible, but it would probably require months of additional pressure from the U.S.

"I think this market access negotiation can only be rushed to a certain extent. It will probably take another few months for the process to unfold," Thorn was quoted as saying in the National Chicken Council's weekly newsletter.

He added that he has seen evidence that the Japanese government positioned itself to make the necessary agricultural reforms and accept trade liberalization despite its public stance in the TPP talks.

Volume:86 Issue:16

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