U.S. and Japanese trade officials today signed a new agricultural trade agreement they hope will go into effect before the end of the year.

The deal will put U.S. farmers on the same footing as competing growers in Canada, Australia and most other Pacific Rim nations.

The deal must still be approved by Japan's parliament, said Steve Mercer, vice president of communications for U.S. Wheat Associates, the overseas marketing arm for the industry. It was introduced last week.

"We believe it will be implemented before the end of the calendar year," he said.

The industry doesn't see any remaining concerns that could halt the deal, Mercer said.

The event at the White House was the official signing, he said.

"It's another positive step in progression toward the implementation of the agreement," he said.

According to U.S. Wheat and the National Association of Wheat Growers, Japan’s tariff on imported U.S. wheat will drop to the same level Japanese flour millers now pay for wheat from Canada and Australia.

Without the new agreement, U.S. wheat imports would have become less competitive as the tariffs dropped on wheat from the member countries under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

U.S. wheat represents about 50% of all the wheat Japan imports each year, currently valued at more than $600 million. That volume represents more than 10% of total annual U.S. wheat exports.

President Donald Trump withdrew the U.S.  from the original TPP in January 2017. The new agreement is essentially what was included in that original deal, Mercer said.

Once the new agreement goes into effect, the tariff on wheat from Canada, Australia and now the U.S. will reduce every year on April 1, Mercer said. 

“As we hoped, the text confirms that the agreement will put U.S. wheat back on equal footing with wheat from Canada and Australia when it is implemented,” U.S. Wheat president Vince Peterson said in a press release. “In addition, Japan has agreed to open country specific quotas for U.S. wheat and wheat product imports. The Trump administration and negotiators for both countries clearly understood what was at stake for U.S. wheat farmers and made sure to have our backs in this agreement.”

The agreement will also impact corn exports to Japan.

“Japan is the number two buyer of U.S. corn, purchasing more than $2 billion in the most recent marketing year," Kevin Ross, president of the National Corn Growers Association, said in a statement. "This is a high-value market for our livestock industry, therefore, also a major purchaser of U.S. corn through exported meats."

He said the agreement "reaffirms and builds on our trading relationship with Japan."

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