Japan trade tensions unsettled

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

U.S. and Japanese negotiators finished three intensive days of talks in Tokyo this week 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.


This session of negotiations could be the last opportunity to advance talks ahead a summit between President Obama and Prime Minister Shinzo Abe on April 24-25 in Tokyo.


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


Both countries are involved in the TPP discussions, and U.S. agricultural groups have been pressing Japan to over increased agricultural market access.


“This development only pushes the high-standing ideals of TPP further out of reach for all countries involved,” said National Cattlemen’s Beef Assn. president Bob McCan, who added the agreement is from the 20th century playbook.


Viewed as a comprehensive, 21st century agreement, a guiding principle of TPP is for member countries to eliminate all tariffs. While the United States has called on Japan to make more concessions, it has met continued 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 conclude the broader 12-country TPP negotiations later this year.


Australia did not get tariff elimination on a number of important products, but a clause in the agreement requires the Japanese to provide the same access to Australia that it provides to other nations. Should the United States get better access to Japan in the TPP negotiations, Australia would get that same access, the National Pork Producers Council said in a statement.


NPPC President Dr. Howard Hill, a pork producer from Cambridge, Iowa, said U.S. farmers and ranchers likely would agree with House Ways and Means Committee Chairman Dave Camp, R-Mich., who last week said that if Japan is not ready to participate in a high-standard, 21st century agreement, which means elimination of tariffs, 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. FTA partner: elimination of virtually all tariffs,” said Hill.


Japan wants exemptions for 586 tariff lines, or 11% of its tariff schedule. In the 17 free trade agreements (FTAs) the United States has concluded since 2000, only 233 tariff lines combined have been exempted from going to a zero tariff.




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