The Trans-Pacific Partnership (TPP) has been in the works for nearly a decade now among the U.S., Canada and 10 countries in the Asia-Pacific region. (The Washington Post assembled a lengthy FAQ about it late last year.) The agreement, if it can ever get made, could govern up to 40% of U.S. imports and exports.
(Source: Congressional Research Service)
So what’s the holdup? There are actually several, but the U.S. agriculture industry has its sights set on Japan right now. More specifically, five commodity groups have expressed concern that Japan is safeguarding certain "sensitive agricultural items," including dairy, sugar, rice, beef, pork, wheat and barley. The U.S. Wheat Associates, National Association of Wheat Growers, USA Rice Federation, National Pork Producers Council and International Dairy Foods Association all sent out the following letter expressing their disapproval:
Minister Amari’s statement in Singapore that none of Japan’s sensitive agricultural items will be fully liberalized may signal the end of hopes for the Trans-Pacific Partnership (TPP) to become a truly comprehensive and forward-looking 21st Century agreement. A country cannot shield its primary agricultural products from competition and still claim to be committed to a high-standard agreement liberalizing essentially all goods.
When Japan joined the TPP negotiations, it agreed to "to pursue an agreement that is comprehensive and ambitious in all areas, eliminating tariffs and other barriers to trade and investment," as stated in the earlier (Nov. 12, 2011) TPP Trade Ministers’ Report to Leaders. Yet according to several reports from the TPP Ministerial meeting just completed in Singapore, Japanese Minister of the Economy Akira Amari has now flatly told the other negotiating countries that Japan will not abolish tariffs in the five agricultural sectors it considers "sacred." Those five sectors include seven basic agricultural products, covering most of agricultural production: dairy, sugar, rice, beef, pork, wheat and barley. They also include many downstream products made from those seven items, such as flour and flour mixes made from wheat and rice.
The broad exemption that Japan is demanding will encourage other partner countries to withhold their sensitive sectors as well. The result would fall far short of a truly comprehensive agreement that would set a new standard for future trade agreements. In fact the TPP envisioned by Japan, if it stands, would be the least comprehensive agreement the U.S. has negotiated since the 21st Century began.
U.S. negotiators still have a chance to push Japan to provide meaningful agricultural market access in the agreement. Failing that, the alternative is suspending negotiations with Japan for now and concluding a truly comprehensive agreement with those TPP partners who are willing to meet the originally contemplated level of ambition. It is a big step, but one that will be justified if Japan continues to refuse to open its agricultural sector to meaningful competition.