Japan lynchpin in TPP

ACCORDING to reports from the recent Trans Pacific Partnership (TPP) ministerial meeting in Singapore at the end of May, Japan's Minister of the Economy Akira Amari said Japan will not abolish tariffs in the agriculture sectors it considers "sacred": dairy, sugar, rice, beef, pork, wheat and barley.

If the U.S. signs onto a TPP deal that includes Japan's current proposal on market access, it could be the "single largest trade issue ever to face U.S. agriculture," said Nick Giordano, vice president and counsel for international affairs at the National Pork Producers Council (NPPC).

The U.S. never has let a trading partner exempt as many tariff lines as Japan is requesting: 586. In fact, in the 17 free trade agreements the U.S. has concluded since 2000, only 233 tariff lines combined have been exempted from elimination.

"It doesn't take a rocket scientist to conclude that agriculture is getting shafted," Giordano added. "There's no reason to give unprecedented special treatment to Japan."

Giordano said in past agreements, sensitivities were always handled by adjusting the amount of time given for tariffs to go to zero, and that was consistent with TPP ministers' goals when the negotiations were launched.

"If we don't get the ship turned around with Japan, it opens up the door to all sorts of problems," he said.

Giordano explained that if Japan gets its way, other countries will pull back too. It also sets the stage for weaker agreements in other negotiations, such as between the U.S. and European Union, which has claimed pork, beef and poultry as sensitive as well.

NPPC joined the International Dairy Foods Assn., National Association of Wheat Growers, USA Rice Federation and U.S. Wheat Associates in calling on the Obama Administration to conclude the TPP negotiations without Japan unless Japan agrees to provide significant market access for the U.S.

NPPC said significant market access would require elimination of Japan's gate price system and all tariffs.

The groups said U.S. negotiators still have a chance to push Japan to provide meaningful agricultural market access in the agreement. Failing that, they said the alternative is suspending negotiations with Japan for now and concluding a truly comprehensive agreement with those TPP partners that are willing to meet the originally contemplated level of ambition.

Giordano said Japan has too much to lose if it leaves the TPP negotiations due to the economic improvement that would result from the final TPP deal.

Giordano said he believes that, in the end, Japan will realize that it needs to eliminate tariffs on nearly all of its products and won't let a "small group of protectionist farmers hold Japan and the entire TPP hostage."

U.S. agriculture will benefit if Japan stays in it. Japan is the fourth-largest market for U.S. agriculture, purchasing $13.5 billion of food and agricultural products in 2012.

Industry support for a final TPP deal is necessary, but agricultural groups won't sign on based on what's on the table from Japan right now.

Giordano said Japan is the lynchpin in moving along the TPP negotiations. "If Japan comes back with a reasonable offer, as past U.S. free trade agreement partners have done, the entire negotiation would close quickly," he said.

Volume:86 Issue:22

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