Ag Groups Push For Bi-Lateral Trade With Japan

April 10, 2017 01:47 PM

Majority of ag groups supported the Trans-Pacific Partnership (TPP) with what could have been the United States and eleven Pacific Rim nations. Since President Trump opted out of the deal, those agricultural organizations are trying to replace what was lost, and they want to start with Japan.

As Brad Williams, a farmer from Cedar Bluffs, Neb., prepares to plant for 2017, he can’t help but think where the harvested crop will go.

“[I think about trade and] our exports,” said Williams. “How’s the politics going to play into that? What are the long-term impacts going to be for agriculture?”

As President Trump continues to be vocal about potential bi-lateral trade deals, agricultural groups push the president to move forward. Japan is one country at the top of the list.

“Japan would be another good country for us to start with [for a bi-lateral trade deal],” said Chandler Goule, CEO of the National Association of Wheat Growers (NAWG).

“[Japan is] one of our leading markets, and yet very low quotas and tariffs in place for U.S. grain moving into Japan,” said Chris Novak, CEO of the National Corn Growers Association (NCGA).

Grain groups realize it’s a big market for them, and it’s an even bigger boost for the U.S. livestock sector.

“[Soybean growers would benefit] with bi-lateral trade with Japan,” said Steve Censky, CEO of the American Soybean Association (ASA). “That’s where a lot of those benefits would be, especially with those livestock customers. Soybeans don’t face a lot of barriers going into Japan, but our pork, poultry, beef and dairy products do.”

The National Pork Producers Council (NPPC) and the National Cattlemen’s Beef Association (NCBA) wrote the president about the benefit of negotiating trade agreements, beginning with the country.

They explain that Japanese consumers purchased $1.6 billion dollars of U.S. pork products in fiscal year 2016, making it the second largest volume market and largest value market for U.S. pork exports. 

Japan also purchased $1.4 billion of U.S. beef products, the highest value international market for both beef and pork.

“Their population is aging more quickly than ours,” said Ernie Goss, business professor at Creighton University. “Their productivity is slower in their market. Their ability to provide their own food is less and less each year.”

“We need to make sure we have access into Japan and try to take down the tariffs rates we currently have,” said Colin Woodall, vice president of government affairs for the NCBA. “The only way to do that is through some sort of a trade agreement. If it’s a bi-lateral trade agreement, we can support that. It just needs to start sooner rather than later.”

NCBA says U.S. producers are losing $400,000 a day because the U.S. doesn’t have a trade deal with Japan, a cut that could bleed deeper into the red.

Australia is a big competitor when it comes to exporting beef to Japan. As of April 1, Japan lowered the tariffs on Australia’s fresh/chilled and frozen beef by less than 1 percent each, lingering the tariffs in the high 20 percent range. While tariffs on U.S. beef products remain much higher, at nearly 40 percent.

“The Japanese consumer is just like our consumer,” said Woodall. “They are looking for the best deal possible. The Australian product is cheaper because of that lower tax rate.”

NPPC says over the past 10 years on average, the U.S. has been the number one pork exporting country in the world.

That’s why the groups want to develop a deal and fast.

“The U.S. may have a trade skirmish,” said Goss. “However, when it gets back to the producer, it’s much more than that.”

During a time when farmers want growing demand and trade, they hope for the best from Washington D.C. and overseas.

“I’d like to see things a little more stable,” said Williams. “Change isn’t bad but if it’s too extreme, it could be disastrous,” said Williams.

According to NPPC, Japan has a population of 127 million people. It’s the third largest economy in the world. In 2016, U.S. food and agricultural exports to Japan totaled $11 billion.

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