Japan’s bid to protect key agricultural products in Trans-Pacific Partnership trade negotiations would be “unprecedented” and dangerous to future free trade agreements, U.S. commodity groups say.
Japan has insisted it will not accept free trade for “sensitive” product categories, including beef and pork, wheat and barley, rice and starch, dairy and sugar, said Nick Giordano, vice president and counsel for international affairs for the National Pork Producers Council, during a press teleconference.
Organizations like the American Farm Bureau Association, National Cattlemen’s Beef Association and National Oilseed Processors Association and legislators are urging the Obama administration and trade negotiators to reject Japan’s offer.
Japan’s proposed exempted sectors account for hundreds of products classified in hundreds of tariff categories, Giordano said, totaling nearly 600 tariff lines.
“Never, ever, has the United States permitted a trading partner to shield so many tariff lines from going to zero,” he said. “The number of tariff lines Japan seeks to exempt from tariff elimination exceeds by almost three times the total number of tariff lines exempted in all 17 U.S. free trade agreements combined implemented in this century.”
Free trade agreements are designed to eliminate tariffs, Giordano said.
Even if it is possible to prevent TPP negotiations from unraveling, and a “TPP-lite” deal is struck, Giordano said other countries in the Asian-Pacific region, like China, would make similar demands. It would have “significant negative implications” about the United States’ ability to reach an acceptable agreement in the Transatlantic Trade and Investment Partnership negotiations with the European Union, he said.
“This is an issue that goes beyond Japan and which would impact billions of future agricultural exports and hundreds of thousands of agricultural jobs,” he said.
Exempting food from trade deals puts upward pressure on global food prices, which undermines global security, Giordano said.
Walter Powell, chairman of the U.S. Wheat Associates and National Association of Wheat Growers joint international trade policy committee and past president of the Oregon Wheat Growers League, said Japan’s proposed exclusions are unacceptable.
Japan is typically the largest buyer of soft white wheat grown in the Pacific Northwest.
“We would hope our Japanese partners could come to the table and negotiate on the removal of all barriers to a comprehensive agreement,” Powell said. “If this is not the time, we would then urge the administration to conclude the TPP without Japan, working with Japan to bring them into the agreement at a later date.”
In February, Sen. Chuck Grassley, R-Iowa, and a bipartisan group of 17 senators sent a letter to U.S. Trade Representative Michael Froman urging Japan must negotiate on all agricultural products and eliminate tariffs and trade barriers in the TPP.
“Agriculture tends to be the locomotive that brings along manufacturing and services,” Grassley said during the press conference. “Agriculture being satisfied is very important to get the entire agreement through to Congress.”
Giordano doesn’t believe the issues are insurmountable.
“The cost of dropping out from TPP is too high for Japan,” Giordano said. “The people of Japan are ready for agriculture reform.”
The sectors Japan insists on protecting represent a tiny share of the Japanese economy, he said. He pointed to success in Korea opening its economy to the United States and European Union by eliminating virtually all tariffs on food and agriculture products. Trading partners in Vietnam, Malaysia and others are ready to follow Korea’s example, he said.
“Japan may expect special treatment, but it is not entitled to special treatment,” he said. “It is impossible to rationalize how we could support an outcome that would establish a terrible precedent and rob our industry of billions of sales.”