Trade deal with Japan boosts export hopes

Sep 27, 2019  | 3 min  | Ep4506

Soybeans, pork, and intellectual property issues remain deadlocked in talks with the Chinese set to resume again next week, but not before new movement with another one of our Asian trading partners.

Peter Tubbs reports. Producer contact:

A trade deal with Japan promises lower tariffs on both sides of the Pacific.

Shinzo Abe, Prime Minister of Japan: "Under this agreement, we together will be able to bring benefits to everyone in Japan as well as in the United States, namely consumers, producers and workers. So the outcome of this negotiation is actually a win-win solution for Japan and the United States."

The agreement gives the U.S. enhanced market access to its third largest trading partner. The deal reduces or eliminates tariffs on $7.2 billion in agricultural products, almost half of the $14 billion imported by the Japanese annually. Over $5 billion worth of imports were already duty-free.

Tariffs on beef and pork will be reduced in stages, but the exact timeline has yet to be announced. Other agricultural products will see their tariffs reduced immediately. Wheat will still face a quota limit on the amount that can be exported to the island nation.

The deal also reduces import taxes on software and digital media that is traded between the two countries.

The U.S. exports roughly twice the value of pork to Japan than to China, and is the second largest destination for pork products after Mexico. The National Pork Producers Council expects 2 percent growth in sales to Japan per year over the next 15 years.

Other trade categories, most notably the import and export of cars, will be discussed during the next stage of negotiations.

US Meat Export Federation: "With Japan being the largest value destination for U.S. pork and beef exports, there is no market more critical to the profitability and prosperity of the U.S. red meat industry. It is therefore imperative that we achieve a level playing field for U.S. pork and beef in Japan, so that the U.S. industry can further expand its customer base in this increasingly competitive market." 

National Pork Producer's Council: “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.”

The deal with Japan spurred hope for progress on. USMCA. The NAFTA replacement has been stalled in the House over Democratic concerns about labor standards, enforceability, and pharmaceutical costs.

Senator Charles Grassley, R – Iowa: “We just received word earlier this week that Lightheizer is going to continue his negotiations with a small group of House Democrats to work out differences on environment, labor, and enforcement.”

Late in the week, Speaker of the House Nancy Pelosi assured lawmakers that work on USMCA will move ahead.

For Market to Market, I’m Peter Tubbs.

More from this show

Grinnell Mutual Insurance