The U.S. and Japan have agreed to enter into talks for a free trade agreement, a development the American agriculture sector has been hoping for ever since President Donald Trump pulled the U.S. out of the Trans-Pacific Partnership.
Today's joint announcement between the two countries, which followed meetings between Trump and Japanese Prime Minister Shinzo Abe in New York, caps more than a year of U.S. pleas to Japan to enter into a free trade accord. The U.S. and Japan were the largest economies in the TPP, a 12-nation pact before the U.S. exited. Under the TPP Japan was set to lower tariffs on U.S. beef, pork, wheat and other commodities and that was expected to spur billions of dollars in new U.S. exports.
“This is welcome news, since we know that export income is critical to the financial health of agriculture and is a key contributor to rural prosperity,” USDA Secretary Sonny Perdue said. “Japan is an important customer for our agricultural products and we look forward to the great potential this breakthrough represents.”
The announcement held few details, but Japan suggested that it will not be willing to give more access to U.S. farm goods than it did in the TPP.
“For Japan, with regard to agricultural, forestry, and fishery products, outcomes related to market access as reflected in Japan’s previous economic partnership agreements constitute the maximum level,” the country said in the announcement.
If Japan is willing to reduce tariffs to the level it did in TPP, that will be a major boon for U.S. beef, pork, potatoes and wheat exporters.
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Japan maintains a 38.5 percent tariff on U.S. beef that would have gradually gone down to 9 percent under TPP.
Japan is the largest foreign market for U.S. potatoes and the Asian country buys about $325 million worth of the spuds yearly from North Dakota, Idaho and other states. Under TPP japan had agreed to remove its 8.5 percent tariff on bulk shipments of frozen french fries.
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