Trump Announces Japan Trade Deal

WASHINGTON (DTN) -- President Donald Trump late Tuesday announced a trade deal with Japan, and USA Rice, perhaps the group most sensitive to U.S. trade policy with Japan, endorsed it.

Trump said on social media: "We just completed a massive Deal with Japan, perhaps the largest Deal ever made. Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits. This Deal will create Hundreds of Thousands of Jobs -- There has never been anything like it. Perhaps most importantly, Japan will open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things. Japan will pay Reciprocal Tariffs to the United States of 15%. This is a very exciting time for the United States of America, and especially for the fact that we will continue to always have a great relationship with the Country of Japan. Thank you for your attention to this matter!"

The White House has not announced details of the deal, but USA Rice immediately announced its support for the agreement.

USA Rice President & CEO Peter Bachmann said in a news release, "With this trade deal, President Trump has further solidified the importance of Japan as a market for high-quality U.S. rice. Japan is consistently among our top export markets in terms of both value and volume, but this will be the first opportunity since the 1990s to further that market access. We thank the president for continuing to prioritize additional rice market access throughout the negotiating process, and we look forward to working with our Japanese counterparts on the implementation of the agreement."

USA Rice explained that the Uruguay Round of trade negotiations conducted between 1986 and 1994 under the auspices of the General Agreement on Trade and Tariffs (GATT), the predecessor of the World Trade Organization, "paved the way for the first major trade agreement with Japan. Japan was allowed to defer tariffication by committing to allow market access for imported rice in annually increasing amounts. In 1999, Japan implemented tariffication ahead of schedule and converted the import quota into a tariff-rate quota (TRQ), with out-of-quota tariffs.

"In exchange for undertaking tariffication, the Uruguay Round's Agriculture Agreement permitted Japan to reduce its minimum access commitment to 682,200 metric tons of milled rice. Between 1999 and 2024, Japan imported on average 326,828 MT of U.S. rice annually valued at an annual average of $222.7 million (not adjusted for inflation). Rice entering Japan outside of the quota is subject to a 341 yen/kg tariff."

ALSO TUESDAY, TRADE DEAL WITH INDONESIA

President Trump on Tuesday announced a trade deal with Indonesia, and U.S. Wheat Associates and the U.S. Meat Export Federation endorsed it.

Trump said on social media: "It is my Great Honor to announce our Trade Agreement with the Republic of Indonesia, as represented by their Highly Respected President, Prabowo Subianto. It is agreed that Indonesia will be Open Market to American Industrial and Tech Products, and Agricultural Goods, by eliminating 99% of their Tariff Barriers. The United States of America will now sell American Made products to Indonesia at a Tariff Rate of ZERO, while Indonesia will pay 19% on all of their products coming into the U.S.A. -- The Best Market in the World! In addition, Indonesia will supply the United States with their precious Critical Minerals, as well as sign BIG Deals, worth Tens of Billions of Dollars, to purchase Boeing Aircraft, American Farm products, and American Energy. This Deal is a HUGE WIN for our Automakers, Tech Companies, Workers, Farmers, Ranchers, and Manufacturers. Thank you for your attention to this matter. MAKE AMERICA GREAT AGAIN!"

The White House also announced the framework of the agreement. "Indonesia will eliminate approximately 99% of tariff barriers for a full range of U.S. industrial and U.S. food and agricultural products exported to Indonesia," the White House said.

"We are excited and grateful to track this wide-reaching government commitment that includes the agreement signed earlier this month between Indonesian flour millers and the U.S. wheat industry," U.S. Wheat Associates President and CEO Mike Spier said in a news release. "We thank the Trump administration, the U.S. Trade Representative and the U.S. Department of Agriculture's Foreign Agricultural Service (USDA-FAS) for their continued work on behalf of American wheat farmers."

U.S. Wheat Associates noted that earlier this month the U.S. wheat export organization and APTINDO, Indonesia's flour milling association, had signed a memorandum of understanding under which APTINDO committed to doubling its annual purchases of U.S. wheat to 1 million metric tons (36.7 million bushels) each year for the next five years, reflecting the rapid growth in demand for wheat foods in Indonesia.

U.S. Meat Export Federation (USMEF) President and CEO Dan Halstrom said, "USMEF thanks USTR for its tireless efforts to negotiate a meaningful agreement with Indonesia, tackling many challenging issues. Indonesia is a market with incredible potential, in which the opportunity for U.S. beef is estimated at $250 million annually. But today, exports are minimal due to numerous trade barriers.

"We are encouraged to see that the highlights detailed in the U.S.-Indonesia joint statement include resolving key issues such as import licensing, the commodity balance policy, and Indonesia's onerous plant-by-plant approval process. For both U.S. beef and U.S. pork, these longstanding restrictions have limited exports to Indonesia. Indonesian importers and consumers are demanding U.S. red meat, and we look forward to the swift conclusion of these negotiations and expanded export opportunities."

Jerry Hagstrom can be reached at jhagstrom@nationaljournal.com

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