Wheat combine

The U.S. wheat industry is encouraged by progress in trade negotiations with Japan.

Wheat industry representatives say they hope new trade talks between the U.S. and Japan will lead to an agreement that will restore certainty to a critical market for their crop.

U.S. Trade Representative Robert Lighthizer met with Japanese Economic Revitalization Minister Toshimitsu Motegi April 15-16 in Washington, D.C., to continue negotiations on a new United States-Japan trade agreement. They discussed trade issues involving a variety of commodities and products, including agriculture.

Lighthizer and Motegi agreed that the U.S. and Japan will meet again in the near future to continue talks, according to the USTR.

Glen Squires, CEO of the Washington Grain Commission, said reports from Japan indicate the two countries would set tariff reductions at the level in the Trans-Pacific Partnership.

“That is what we’ve proposed and requested all along,” Squires said. “We have wanted to be on a level playing field when it comes to tariffs with Canada and Australia, our main competitors.”

TPP is an agreement Japan has with 10 other countries, including Canada, Mexico, Australia, New Zealand, Vietnam, Malaysia, Chile, Singapore, Brunei and Peru.

President Donald Trump withdrew from the deal in 2017, calling it a “potential disaster.”

The remaining countries signed a new deal, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which went into effect Dec. 31.

Squires said maintaining TPP-like tariff levels benefits Japanese customers and millers, which receive the high-quality product to which they’re accustomed. It also helps maintain U.S. status as a reliable supplier.

“They don’t have to be wondering and trying to figure out other sources,” Squires said.

Japan typically imports 800,000 to 1 million metric tons of white wheat from the Pacific Northwest each year.

Overall, Japan imports 2.6 million to 3.5 million tons each year of all types of wheat from the West Coast, Squires said. Japan is typically one of the top two markets for U.S. wheat, he said.

Squires said the effect of the U.S. not being in TPP has resulted in less hard red winter wheat and hard red spring wheat going to Japan. The impact on soft white wheat hasn’t been felt quite yet, he said.

“We’re encouraged ... it’s a start,” said Steve Mercer, vice president of communications for U.S. Wheat Associates, the overseas marketing arm for the industry. “We don’t quite know where the path is going yet, but the pace we think is going to pick up because there are new meetings scheduled.”

Negotiators are well aware of the challenges for the U.S. wheat industry created by TPP, and the advantages that deal gives Canadian and Australian competitors, Mercer said.

The grain commission and U.S. Wheat are in regular contact with Japanese customers, Squires said.

A new agreement would take away “the cloud of uncertainty,” Squires said.

“That’s hard on customers, it’s hard on producers, it’s hard on the grain-handling system,” he said. “With the uncertainty, (Japanese customers) start looking elsewhere for product. If this can eliminate the uncertainty, we’ll be back in business.”

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