The NGFA and North American Export Grain Association (NAEGA) this week outlined several priorities the United States should pursue in a future trade agreement with Japan.
The U.S. and Japan announced intentions to start negotiations on a new free trade agreement in September. Japanese Prime Minister Shinzo Abe and President Donald Trump said the two countries would not impose new tariffs on each other’s countries during the negotiations.
In a statement submitted to the Office of the U.S. Trade Representative (USTR) on Nov. 26, the NGFA and NAEGA said an agreement with Japan should expand all current U.S. agricultural market access – to include and exceed all offsetting competitive advantages provided to other countries through the European Union (EU)-Japan Economic Partnership Agreement and the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) trade accord – while incorporating modernization provisions adopted in the U.S.-Mexico-Canada Trade Agreement (USMCA) to address the challenges of 21st century global trade, particularly those addressing non-tariff trade barriers.
“Tariff barriers are an increasing concern for U.S. grain and oilseed exporters, particularly as Japanese trade agreements consummated with U.S. competitors come into effect,” the statement notes. “In coming years, U.S. competitors in the EU, Australia and Canada will gain preferential market access to the Japanese market that exceeds what currently is allowed for the United States under World Trade Organization rules.”
For instance, the NGFA-NAEGA statement noted that CPTPP countries will gain several key concessions, including a 45 percent reduction in Japan’s tariff markup by year nine of the accord, which economically will disadvantage U.S. exports of wheat and barley to Japan.
Further, under the EU-Japan Economic Partnership Agreement, the United States will lose additional market share relative to EU competitors in wheat, barley, and oilseeds and derived products.
NAEGA and NGFA urged the USTR to address several market-access issues relative to Japanese market tariffs and quotas. For example, USTR should:
- Improve market access for all grains and oilseeds. In particular, this should include expanded duty-free access for U.S. wheat that will level the playing field for U.S. imports and reduce import duties on U.S. corn and sorghum.
- Reduce Japan’s markup for all imported U.S. grains and oilseeds to equal or exceed all competitive advantages provided to other countries through the EU-Japan Economic Partnership Agreement and the CPTPP.
The NGFA and NAEGA urged USTR to secure agreement from Japan at the earliest stage of the negotiations to provide market access and tariff treatment for U.S. agricultural products that are comparable to what Japan will grant to America’s foreign competitors under CPTPP and the EU-Japan Economic Partnership Agreement to avert an imminent loss of U.S. market share.
“Once eroded or lost – even temporarily – history repeatedly has shown that U.S. market share is never completely recovered,” the NGFA and NAEGA stressed.
The statement also urged USTR to incorporate into a U.S.-Japan trade agreement provisions of the USMCA that address non-tariff trade barriers, including establishment of a so-called “rapid response mechanism to facilitate trade in the event of an adverse import check for sanitary or phytosanitary reasons and inclusion of USMCA provisions designed to reduce the likelihood of trade disruptions involving agricultural products produced using biotechnology or other seed-breeding innovations.”
More priorities are listed in the full nine-page statement.