Japan’s parliament approved what has been dubbed a “mini” trade pact with the U.S. earlier this month. The agreement puts U.S. ag products, for the most part, on the same footing as exports from the 11 nations participating in the Trans Pacific Partnership.

The U.S. and Japan are committed to further trade talks in early 2020.
The Kyodo news service said that under the trade pact, the tariff on U.S. beef would gradually fall to 9 percent from the current 38.5 percent. Pork, poultry, wheat, cheese, wine, ethanol, and other goods will also see lower tariffs. Japan, the No. 3 market for U.S. farm exports, is forecast to import $12.5 billion worth of them this fiscal year.

Dan Halstrom, president of the U.S. Meat Export Federation, called it “one of the biggest developments in the history of red meat trade.”

Source: Successful Farming

The deal will reduce Japanese barriers to American beef, pork, wheat, cheese, almonds, wine, and other products, while cutting American tariffs on Japanese turbines, machine tools, bicycles, green tea, flowers and other goods.

The deal will deliver similar access to Japan’s agricultural market that Tokyo was offering under the Trans-Pacific Partnership, which the U.S. withdrew from in 2017. It also will help producers keep pace with competing nations that are now benefiting from their own trade agreements with Japan.

“When this agreement enters into force, we will immediately match and have the same tariff treatment as is the case with Canada, Australia, New Zealand, etc.,” a senior administration official said.

For some commodities, such as dairy, there will be a slight drop-off in benefits from the original Pacific Rim pact. A senior administration official said more than 80 percent of dairy products will receive the same market access as the 11-nation pact. Cheese and whey, two of the top U.S. dairy exports to Japan, will receive similar tariff cuts to what was on the table during TPP talks, according to the International Dairy Foods Association.

The ag industry responded favorably.

“Japan is American agriculture’s fourth-largest export destination and vital to the livelihood of hundreds of thousands of farms and the families who live on them,” said American Farm Bureau Federation President Zippy Duvall. “We export nearly $13 billion a year in agricultural products to Japan, even as we continue to face steep tariffs on many exports. This agreement, once signed, will lower tariffs and put U.S. farmers and ranchers on a level playing field to compete in Japan with countries that participate in the Trans-Pacific Partnership.”

The two countries have also reached an agreement on digital trade that they hope will serve as a model for other countries.

The White House aims to implement the agreement by Jan. 1.

Sources: New York Times, Politico, Farm Progress

The agreement was announced at the G7 summit in France.
“We thank the Trump administration for negotiating a trade agreement with Japan, a market that represented 25 percent of total U.S. pork exports last year,” said David Herring, a pork producer from Lillington, N.C. and president of the National Pork Producers Council. “We look forward to rapid implementation of the agreement as international competitors are currently taking U.S. pork market share through more favorable access.”

Dermot Hayes, Ph.D., an economist at Iowa State University, estimates exports to Japan will grow from $1.6 billion in 2018 to more than $2.2 billion over the next 15 years as a result of the U.S. pork industry getting market access in Japan as favorable as its competitors.

U.S. pork is highly dependent on exports, shipping more than 25 percent of total production to foreign markets.

During the announcement, President Trump also said Japan would buy “significant amounts of U.S. corn” and wheat as a result of the deal.
Japan is the USA’s third-largest agricultural market and the biggest beef market, with more than $2 billion worth of beef exported to Japan each year.

American Farm Bureau Federation President Zippy Duvall characterized the deal as “much-needed good news on the agricultural trade front.”
Sources: Ohio’s Country Journal, The Hill, DTN

Kudlow made the comment to reporters at the White House and declined to give any further details, according to Reuters.

The U.S. and Japan have been in talks since September, when Prime Minister Shinzo Abe and President Trump issued a joint statement saying they would engage in trade talks.

U.S. Trade Representative Robert Lighthizer met earlier this month in Washington, D.C., with Japan’s Economic Revitalization Minister Toshimitsu Motegi, and they released a joint statement that they would have further “substantive” talks in the future. The statement did not set a date for those talks.

Agriculture Secretary Sonny Perdue told reporters last week that U.S. officials may pursue a narrow deal with Japan involving agriculture “that could then be fleshed out over a longer period” into a more comprehensive deal.

There was little other indication of progress in the negotiations. U.S. officials have been consumed with wrapping up trade talks with China and ensuring the U.S.-Mexico-Canada Agreement gets approved by Congress.

Japan has been concerned about the possibility that the U.S. will place tariffs on autos and auto parts imports, a move that Trump has said is dependent on how upcoming trade talks with the European Union play out.

Source: Washington Examiner