By Bill Horan: Rockwell City, Iowa
The holiday season has ended, as we marked the passing of the twelfth day of Christmas. In Japan, people are already making their wish lists for 2015.
They want butter.
That’s because for the Japanese, 2014 was the year of the great Christmas butter shortage.
Their problem is our opportunity—but only if Washington makes a bipartisan New Year’s resolution to actively pursue and complete the Trans Pacific Partnership (TPP) free-trade agreement in the months ahead.
On the face of it, you wouldn’t think that the Japanese care about Christmas or butter. Only a tiny fraction of the Japanese population is Christian (most are Shinto or Buddhist) and butter is not a diet main-stay (in a diet dominated by rice and seafood).
Many Japanese nevertheless celebrate Christmas. For them, it’s a minor date on the calendar. NPR recently likened it to the U.S. Valentine’s Day. The Japanese honor it by baking and eating round sponge cakes covered with whipped cream and topped by strawberries.
They’re named “Christmas cakes,” and the recipe calls for lots of butter.
Unfortunately, Japan nearly ran out of butter this year.
The experts blamed it on a hot summer that led to low milk production. They also pointed to a structural problem in Japan’s agricultural economy: Since 1985, the number of households that engage in dairy farming has dropped from more than 80,000 to fewer than 20,000. Dairy cows have fallen from more than 2 million to fewer than 1.5 million.
To complicate matters, Japan’s dairy farmers are protected by high tariffs, whose purpose is to block or at least impede imports from foreign competitors. So when domestic production lags, international trade can’t make up the difference. For ordinary consumers, butter becomes prohibitively expensive.
This is a shame, especially when dairy farmers in the United States are ready and willing to sell butter to Japan.
In the future, perhaps they’ll have the chance—but only if President Obama and Congress get behind a bipartisan trade agenda that includes the TPP, a round of negotiations that would improve links between the United States, Japan, and other Pacific Rim nations.
The Peterson Institute says that TPP holds the potential to generate $120 billion in new U.S. exports per year by 2025. Some sliver of that could include butter to Japan, but mostly it would involve machinery, plastics, and services as well as the traditional farm commodities of corn, soybeans, pork, beef, and fresh fruit.
This pact would benefit Americans everywhere, creating jobs in factories and on farms.
Success will require Democrats and Republicans to set aside their differences and oppose the pleadings of special-interest groups.
I’m hopeful it will happen: In a speech last month, President Obama announced a willingness to buck his fellow Democrats. “Those who oppose these trade deals ironically are accepting a status quo that is more damaging to American workers,” he said. “There are folks in my own party and in my own constituency … [who] are barking up the wrong tree when it comes to opposing TPP, and I’m going to make that argument.”
Congressional Republicans can do their part by passing Trade Promotion Authority, which would allow the White House to finish TPP talks and submit an agreement to Congress for an up-or-down vote. Just as the Christmas cakes of Japan require butter, successful trade agreements need this legislative tool.
If the new GOP leadership in Congress truly wants to find common ground with President Obama, this would be an excellent way to start.
At one point, trade diplomats signaled that they had hoped to complete TPP in 2014. As anyone familiar with trade talks knows, however, negotiations have a way of dragging on—especially as they become mired in difficult conversations about agriculture and other sensitive topics.
Yet the advantages of TPP are too great to ignore. Maybe we should set an informal goal of having TPP before next Christmas. For the Japanese, it could mean not having to worry about butter for their cakes. For Americans, it would provide a permanent boost to the economy—a Christmas gift that keeps on giving.
Bill Horan grows corn, soybeans and other grains with his brother on a family farm based in North Central Iowa. Bill volunteers as a board member and serves as Chairman for Truth About Trade & Technology (www.truthabouttrade.org).