WASHINGTON, June 11, 2014 – U.S. pork producers say they have given enough ground in negotiations with Japan on the Trans-Pacific Partnership (TPP), a trade agreement that’s being hammered out among a dozen Pacific Rim countries that account for 40 percent of world gross domestic product.
“We’re not budging,” said Nick Giordano, National Pork Producers Council vice president and counsel for international affairs. “We’re not giving special treatment to Japan. Period!” Giordano was reacting to Japan’s demand that it be allowed to protect 587 lines of agricultural products, including pork and other so-called “sacred” commodities, in what is supposed to be a free-trade agreement.
To give some perspective, Randy Spronk, NPPC past president and current Trade Committee chairman, told reporters at last week’s World Pork Expo that those 587 lines equal three times the total number of all exemptions for the 17 trade agreements the U.S. has made since the year 2000. While Japan is currently the top value export market for American pork, accounting for nearly $2 billion in annual sales, NPPC can’t just give in to this demand, Spronk said.
“TPP was initially branded as a high-standard, 21st century agreement. Yet Japan’s current market access offer, if accepted, would be unprecedented in U.S. trade agreements. It would rob U.S. farmers and ranchers of billions of sales,” Spronk said, adding that it would also prompt other countries to seek similar concessions, and more, in other trade negotiations, including a treaty being now being worked out with Europe.
“Caving in to Japanese demands would create a toxic present that would follow U.S. agriculture for years and years.”
Japan’s intransigence on the pork issue is especially galling to NPPC officials who were caught by surprise at the demands, said Giordano, noting that it was the council that lobbied other commodity groups to allow Japan in the trade agreement in the first place.
“NPPC led the charge in lobbying for Japan to come in,” Giordano said, although if the Japanese remain insistent on keeping the pork tariffs, the U.S. pork producers could turn around and be the ones who ask to go forward without Japan. “We’d like them to stay in, but not at any cost.”
Prospects of a deal look bleak at this point, but there could still be hope. NPPC President Howard Hill said while his organization is not expecting to compromise on the overall issue, there could be some wiggle room in negotiating a timed phase-out.
“We’re not asking for those tariffs to be removed day one,” Hill said. “We realize that markets have to adjust, and typically in these trade agreements, these tariffs are ratcheted down over time – maybe five years, maybe 10 years.”
Hill understands that every country has some sensitive products, and there is always resistance whenever you do any free trade agreement. He points to Mexican pork producers who complained when the North American Free Trade Agreement was done 20 years ago that they would not be able to compete. Today, Mexican farmers produce as many pigs as they did two decades ago, but now they are also able to export more pork products, including to Japan, and are getting higher value for those products.
Another point Hill believes U.S. negotiators can make is that TPP is for the long-term good of all the trade partners, and that long-term view is something that should resonate with the Japanese, who are known for taking a similar viewpoint in business dealings. But the bottom line, whether the tariffs are lifted now or phased out later, is that Japan needs to drop its current stance, Hill explained.
“Eventually, those tariffs need to be removed for us to agree to Japan being in TPP.”
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