JAPAN has always seemed to offer significant upside trade potential if included within the Trans-Pacific Partnership (TPP) negotiations, but if Japan requires special treatment for its agriculture sector, several key agricultural groups have threatened to oppose the deal.
A coalition comprised of those organizations said they're likely to oppose a final TPP trade agreement if Japan doesn't agree to comprehensive trade liberalization, including elimination of tariffs on virtually all U.S. agricultural products.
Japan is an important market for U.S. agriculture — the fourth largest; the U.S. shipped $13.5 billion of food and agricultural products to the island nation in 2012.
In a letter sent Dec. 18 to U.S. Trade Representative Michael Froman, the 17 groups said the unwillingness of Japanese negotiators to present a comprehensive offer on agricultural products is threatening to undermine the TPP trade talks.
"In previous negotiations, the United States has demanded and received from developing country trading partners full and comprehensive liberalization in the agricultural sector," the letter states. "Yet, in the TPP negotiations, Japan — a rich, developed country — is demanding special treatment for its agricultural sector. We consider an agreement that includes such special treatment for Japan to be unacceptable."
TPP is a regional trade negotiation that includes the U.S., Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, which account for nearly 40% of global gross domestic product.
The agricultural organizations pointed out in their letter to Froman that, if Japan is allowed to claim exceptions for sensitive products, other TPP countries inevitably will demand the right to do the same. Countenancing such an action, they said, also will affect future trade agreements, including the Trans-Atlantic Trade & Investment Partnership now being negotiated between the U.S. and the European Union.
If the U.S. can't reach an agreement with Japan that includes comprehensive liberalization in the agriculture sector, it should conclude a TPP deal without the Asian nation, the groups said.
The coalition letter was signed by the American Farm Bureau Federation, American Meat Institute, American Soybean Assn., International Dairy Foods Assn., National Association of Wheat Growers, National Cattlemen's Beef Assn., National Chicken Council, National Corn Growers Assn., National Milk Producers Federation, National Oilseed Processors Assn., National Pork Producers Council, National Turkey Federation, North American Meat Assn., U.S. Dairy Export Council, U.S. Grains Council, U.S. Wheat Associates and USA Rice Federation.
A group of U.S. senators urged Froman and Agriculture Secretary Tom Vilsack to push for broad market access for U.S. pork in the countries that are part of the current TPP trade talks.
In a letter circulated Dec. 13, Sens. Joe Donnelly (D., Ind.) and Charles Grassley (R., Iowa) said TPP offers an opportunity to open new markets for U.S. pork, expand existing markets and establish a standard for future trade agreements.
However, the senators pointed out, a number of the TPP nations currently have highly restrictive trade barriers that limit U.S. pork exports.
Japan, for example, maintains a complex system of tariffs that reduce the volume of U.S. pork exports, while other countries have non-tariff barriers that constrain U.S. pork shipments.
Also, Vietnam, in addition to having burdensome administrative requirements, maintains a reference price scheme on imported pork that raises the cost to import certain pork cuts above the market price.
Furthermore, despite an existing bilateral trade agreement, Australia still uses non-tariff barriers to limit U.S. exports to either processed pork or frozen, boneless pork for further processing, the letter adds.
"It is estimated that if tariffs and all non-tariff barriers are eliminated in each TPP nation, U.S. pork exports will grow by over 50% within 10 years of implementation. We strongly urge you to insist that all tariffs and non-tariff barriers on pork in TPP partner nations be eliminated as part of the TPP agreement," the lawmakers wrote.