Senators Call For Japan To Eliminate Tariffs

Feb 24, 2014

WASHINGTON, D.C. – Senate lawmakers are calling on Japan to eliminate tariff and non-tariff trade barriers for U.S. agricultural products as part of the ongoing Trans-Pacific Partnership (TPP) trade talks.The TPP is a regional negotiation that includes the United States, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, which account for nearly 40 percent of global GDP. Lead negotiators met this week in Singapore – ahead of the TPP ministers meetings Feb. 22-25 – to discuss outstanding issues, including Japan’s recalcitrance on market access.

In a letter sent today to U.S. Trade Representative Michael Froman, 15 senators, led by Michael Bennett, D-Colo., and Charles Grassley, R-Iowa, asked for assurances that the TPP negotiations will not be concluded until Japan agrees to eliminate tariff and non-tariff trade barriers for agricultural products. In addition to Bennett and Grassley, signing the letter were Sens. Roy Blunt, R-Mo., Richard Burr, R-N.C., John Cornyn, R-Texas, Joe Donnelly, D-Ind., Kay Hagan, D-N.C., Jim Inhofe, R-Okla., Mike Johanns, R-Neb., Mark Kirk, R-Ill., Jerry Moran, R-Kan., Mark Pryor, D-Ark., Pat Roberts, R-Kan., John Thune, R-S.D., Mark Udall, D-Colo., and John Boozman, R-Ark.

Japan is demanding special treatment for its agricultural sector, including exclusion from the agreement of certain “sensitive” products. The United States never has agreed to allow a trading partner to exempt as many tariff lines as Japan is requesting. It wants exemptions for 586 tariff lines, or 11 percent of its tariff schedule. (In the 17 free trade agreements the United States has concluded this century, a total of 233 tariff lines have been exempted from having their tariffs go to zero.) A recent analysis of Japan’s market access offer can be viewed here.

The Asian nation is an important market for U.S. agriculture – the fourth largest – which shipped $12.1 billion of food and agricultural products to the island nation in 2013.

The senators pointed out in their letter that, if Japan is allowed to claim exceptions for sensitive products, other TPP countries inevitably will demand the right to do the same. That, they said, would cost U.S. jobs and billions of dollars in future U.S. agricultural exports and would undermine the TPP and future trade talks, including the ongoing Trans-Atlantic Trade and Investment Partnership (TTIP) negotiations between the United States and the European Union.

A number of U.S. agricultural organizations resounded the points in the Senate letter.

“What is achieved in TPP with Japan will set the standard for future TPP partners such as China and the Philippines and for TTIP negotiations,” said NPPC President Randy Spronk, a hog farmer from Edgerton, Minn., who pointed out that the EU already has indicated it will seek to protect pork and other agricultural products. “Japan’s market access offer, if accepted, would be a radical departure from past U.S. trade policy, exempting nearly three times more tariff lines than were exempted in all 17 previous U.S. free trade agreements combined. All U.S. sectors are at risk if the precedent of allowing widespread product tariff exemptions is established.”

Those sentiments were echoed by Bob McCan, president of the National Cattlemen’s Beef Association and a cow-calf producer from Victoria, Texas. “It is fundamentally important that all TPP members, including Japan, abide by the same terms of TPP as the other members. Excluding products for purely political reasons sets a dangerous precedent that will result in other TPP countries seeking similar treatment. This will undermine all efforts to make TPP a true 21st century agreement based on market principles and sound science,” said McCan.

“It is vital that TPP be done in a comprehensive manner so that all of America’s farmers and ranchers can realize the benefits of a more open regional marketplace,” said American Farm Bureau Federation President Bob Stallman. “The Trans-Pacific region is an economically dynamic slice of the world, and to be meaningful, these talks need to enhance opportunities for all sectors, rather than picking winners and losers based on one nation’s perceptions.”

Added James H. Hodges, president and CEO of the American Meat Institute, “The TPP is a 21st century trade agreement that must be ambitious and comprehensive. To live up to the high standards of the TPP partners, Japan must be willing to negotiate all products.”

“As a major wheat importer, it is in Japan’s interest to free its grain trade and ensure the future competitiveness of its large milling and wheat foods industries under TPP,” said U.S. Wheat Associates Chairman Dan Hughes.

“We are open to a reasonable but limited amount of time for Japan to transition to a zero tariff for wheat,” said National Association of Wheat Growers President Bing Von Bergen, “but we must see that outcome if Japan is to earn our support for its TPP membership.”

Source: NPPC