Ag Policy Blog

Farm, Trade Leaders Call Japan Agreement a Positive Step

Jerry Hagstrom
By  Jerry Hagstrom , DTN Political Correspondent
U.S. farm products will see lower tariffs to Japan under the trade deal finalized Wednesday in New York by President Trump and Japan's prime minister. (DTN file photo)

American Farm Bureau Federation President Zippy Duvall, who was present at the signing of the U.S.-Japan trade agreement in New York, said in a statement, “Today’s announcement that the two countries have reached an agreement and have completed agricultural negotiations is a positive step for America’s farmers and ranchers.

“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. That’s good news.”

Farm Bureau also issued a Market Intel article on the agreement. Veronica Nigh, a Farm Bureau economist, concluded, “The U.S. saw its market share slip away quickly when passage of the US-Colombia FTA was delayed, while the Canada-Colombia FTA went into effect. While the CPTTP [Comprehensive and Progressive Agreement for Trans Pacific Partnership] and EU-Japan Economic Partnership Agreement are still in the first few months of implementation, early data suggests that U.S. market share is susceptible to erosion as our competitors enjoy lower tariffs.”

Farmers for Free Trade, the bipartisan coalition supported by America’s leading ag commodity associations, said, “This agreement is a significant step in further opening an already important market for American farmers and ranchers. While we look forward to seeing the full text of the final agreement, this is a step in the right direction. Our farmers need trade wins, not trade wars. We hope this new agreement leads to more wins, as well as progress in achieving a better trade relationship with China.”

National Pork Producers Council President David Herring, who was present in New York, said, “We’ve seen market share declines in Japan, historically our largest value export market, since the start of the year when international competitors gained more favorable access through new trade agreements. Once implemented, the agreement signed today puts U.S. pork back on a level playing field with our competitors in Japan.”

National Cattlemen’s Beef Association (NCBA) President Jennifer Houston said, “For the past few years, U.S. beef producers have benefitted greatly from growing demand for U.S. beef in Japan. While Japanese consumers enjoy high-quality U.S. beef, they unfortunately pay a higher price for U.S. beef due to the massive 38.5 percent tariff. Removing that tariff allows more Japanese consumers to enjoy more U.S. beef at a more competitive price. Today’s announcement is welcome news for American families who produce U.S. beef and Japanese families who purchase it.”

National Chicken Council President Mike Brown said, “Under the U.S.-Japan Trade Agreement, frozen chicken products will receive favorable tariff reductions, enabling our products to compete more effectively with those countries in the Trans-Pacific Partnership. “While final details regarding agriculture still need to be worked out, today’s signing is welcome news, and we would like to thank President Trump, Secretary Perdue and Secretary Lighthizer for their work negotiating trade deals that stand to benefit U.S. chicken.”

North American Meat Institute CEO Julie Anna Potts said, “The U.S. will now be better positioned to compete with countries in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the European Union for valuable market share.”

Corn Refiners Association President and CEO John Bode said, “This trade agreement with Japan is yet another display of the Trump administration’s commitment to expanding global export market access for American agricultural products.”

The U.S. Grains Council said the agreement “will solidify our longstanding partnership for the future and create a platform for growth into new sales and new sectors, including the potential for sales of U.S. ethanol. Japan is one of the largest and most loyal U.S. corn customers, having bought more than $2 billion of U.S. corn in the most recent marketing year. It is an important market for food and feed barley and sorghum. And as a country looking to improve the environmental impact of its fuel, it is an important future market for U.S. ethanol products.”

National Corn Growers Association President Lynn Chrisp said, “Japan has been a strong trading partner and friend for American agriculture, now the second largest purchaser of U.S. corn. NCGA has long advocated for an agreement with Japan and, with many farmers struggling amid challenging times in agriculture, this is very welcome news. While we await further details, it seems this phase-one agreement will deliver for corn farmers and build upon our successful partnership with Japan.”

U.S. Wheat Associates Chairman Doug Goyings said, “This agreement puts U.S. wheat back on equal footing with wheat from Canada and Australia that currently have a tariff advantage under a separate trade deal.”

“Resolving trade issues like this and building new opportunities for our wheat and other agricultural products is absolutely needed at a time when wheat farmers are dealing with another year of low prices and a depressed farm economy,” added National Association of Wheat Growers (NAWG) President Ben Scholz.

National Sorghum Producers Chairman Dan Atkisson said, “Japan has become a stable market for our farmers with growing interest from the consumer and feeding industries, and we look forward to increased market access, duty free, achieved through this agreement. We also feel this relationship with Japan marks an important step forward in further expanding trade relationships with southeast Asia, where there are valuable market growth opportunities.”

American Soybean Association President Davie Stephens said, “Japan has long been a valued and reliable trading partner for soybeans, and we appreciate that the agriculture component of this deal will assure continued market access for our beans and other ag products. As we go through the details of the agreement, we extend a thank you to the administration for finalizing this deal. With a 63% market share, the United States is the largest soybean supplier to Japan, with exports totaling $976 million in 2017. ASA looks forward to working with the administration on the next steps towards reaching a comprehensive free trade agreement.”

International Dairy Foods Association President Michael Dykes said, “Although full details of the agreement have not been released, we are confident this deal is a step in the right direction and will help to improve our current market position with Japan. If we had done nothing, U.S. dairy would continue to be less competitive in a global marketplace where Japan has implemented trade deals with competitors including the EU, New Zealand and Australia. While early reports indicate this deal does not fully achieve the same tariff rate reductions as those negotiated under the abandoned Trans-Pacific Partnership or the EU-Japan deal, it should deliver those benefits to cheese and whey — two of our largest exports to Japan.”

The U.S. Dairy Export Council (USDEC) and National Milk Producers Federation (NMPF) stressed that they consider the agreement announced today to be “an interim agreement with Japan that will deliver improvements in market access for the U.S. dairy industry, while noting that the work to secure a sufficient competitive landscape in Japan for dairy is not finished.”

USDEC President and CEO Tom Vilsack said, “This first stage of a U.S.-Japan agreement will improve upon today’s status quo, which has been unsatisfactory ever since Japan’s treaties with the CPTPP nations and the EU went into effect. To continue that progress toward closing the competitiveness gap with both CPTPP and EU suppliers, it’s essential that the U.S. secure further market openings and assurances in the second stage of negotiations with Japan to best position the U.S. to compete against all of our major competitors in Japan.”

National Milk President and CEO Jim Mulhern said, “This interim trade agreement with Japan is welcome news for farmers across the U.S. who have seen their incomes damaged by trade disputes. Today’s news is not the end of the road though; it’s the first leg of the journey.”

Western Growers President and CEO Tom Nassif said, “Our members will now have access to the Japanese market on equal footing with the Asia-Pacific signatories of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Japan is the third-largest market for American agricultural products, and the elimination of tariffs on produce products such as almonds, blueberries, walnuts, broccoli and prunes – as well as the staged tariff elimination for additional products like cherries and oranges – will result in significant export opportunities for our members and the broader fresh produce industry.

“We are also pleased to learn that President Trump and Prime Minister Abe have agreed to further negotiations to address the remaining non-tariff barriers to trade,” Nassif added. “Historically, Japan has used non-scientific sanitary and phytosanitary standards to prohibit many high-quality U.S. fruits, vegetables and tree nuts from entering the Japanese market. Therefore, to ensure the market gains secured in the U.S.-Japan Trade Agreement are fully realized, we must continue to push for reform of the Japanese importation system.”

National Foreign Trade Council (NFTC) President Rufus Yerxa said, “We are pleased to see that the U.S. and Japan have come to an agreement that demonstrates the leadership of both countries in high-standard digital trade rules and gives certain U.S. farmers and ranchers greater access to the Japanese market. However, we are concerned about the limited nature of the deal, which falls short of the comprehensive nature of traditional U.S. trade agreements as it lacks commitments on non-tariff barriers, intellectual property and other regulatory concerns.

“Significantly, the agreement also fails to address the threat of damaging and counterproductive tariffs on autos and auto parts, which would be inconsistent with this new deal,” Yerxa added. “We look forward to reviewing the text of what has been agreed to by the U.S. and Japan and we urge the administration to continue working toward a broader agreement that benefits the entire U.S. economy.”

The Business Roundtable said it “welcomes the announcement that the U.S. and Japan have come to agreement on important agricultural and industrial market openings and digital trade commitments that will benefit American workers, farmers and businesses. We urge the administration to build on this foundation and continue negotiations toward a comprehensive high-standard trade agreement with Japan that encompasses Trade Promotion Authority negotiating objectives and boosts all sectors of the U.S. economy.”



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