Agriculture industries anxious about potential to level playing field with other CPTPP nations.

Jacqui Fatka, Policy editor

September 18, 2019

3 Min Read
Trump notifies Congress of Japan trade deal

The Trump Administration has reached an initial trade agreement regarding tariff trade barriers with Japan, and in a notice to Congress, President Donald Trump said he intends to enter into the agreement in the coming weeks. Trump and Japan's Prime Minister Shinzo Abe are considering signing a deal in late September when they attend the U.N. General Assembly in New York.

In October 2018, the Administration notified Congress that the President intended to initiate trade negotiations in stages. The first is intended to reduce tariff barriers as well as make efforts to enter into an executive agreement with Japan regarding digital trade. The two nations announced an agreement in principle several weeks ago that covered reductions in tariffs on agricultural and industrial goods but not automobile. Details of the deal have not been formally released.

Trump's notice to Congress said, “Accordingly, pursuant to section 103(a)(2) of the Bipartisan Congressional Trade Priorities & Accountability Act of 2015 (Public Law 114-26, Title I), I hereby notify the Congress that I intend to enter into a trade agreement regarding tariff barriers with Japan under section 103(a) of the act.” The agreement would not require a vote in Congress under the so-called “fast-track” approval process.

Related:U.S.-Japan trade agreement in principle struck

The White House’s agreement in principle with Japan is expected to bring tariffs on U.S. pork and beef in line with competitors' rates, but the agreement still must be finalized, and the timeline for implementation is not yet known, the U.S. Meat Export Federation noted. Top U.S. agricultural exports to Japan currently include beef, corn, pork, soybeans and wheat.

The National Pork Producers Council said U.S. pork producers are losing market share in Japan because international competitors have recently entered into trade agreements with Japan, including the European Union and those countries participating in the Comprehensive & Progressive Agreement for Trans-Pacific Partnership (CPTPP). According to Iowa State University Economist Dermot Hayes, U.S. pork exports to Japan will grow from $1.6 billion in 2018 to more than $2.2 billion over the next 15 years if the U.S. quickly gains market access on par with international competitors. Hayes reports that U.S. pork shipments to Japan will drop to $349 million, however, if a trade deal on these terms is not quickly reached.

American Feed Industry Assn. (AFIA) president and chief executive officer Joel G. Newman said in a statement the agreement would be a boon for the U.S. animal food industry.

Related:Ag groups welcome Japan deal

“AFIA is pleased the Administration has reached an initial trade agreement on tariff barriers with Japan and intends to enter into the agreement in the coming weeks,” Newman said. “We are hopeful this agreement will show progress in bringing the U.S. animal food industry closer to the level of tariff treatment Japan affords our competitors in the recently implemented Comprehensive & Progressive Agreement for Trans-Pacific Partnership. We are eager to review the final text and for further developments in subsequent bilateral negotiations with Japan.”

Japan represents the U.S.'s third-largest export market (behind Canada and Mexico) for feed, feed ingredients and pet food products, at a value of $986 million in 2018. By eliminating existing barriers and leveling the playing field, a U.S.-Japan trade agreement will provide America’s animal food and ingredient manufacturers with greater access to this marketplace.

In Trump’s letter to Congress, he did add: “My Administration looks forward to continued collaboration with the Congress on further negotiations with Japan to achieve a comprehensive trade agreement that results in more fair and reciprocal trade between the United States and Japan.”

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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