Japan game changer in TPP trade talks

Published on: Apr 16, 2013

U.S. agriculture would see tremendous benefits from having Japan in a Trans-Pacific Partnership trade agreement. Monday several agricultural groups held an event at the National Press Club detailing some of those benefits as well as trying to convey that despite the sensitivities that Japan brings to the table, it has entered discussions recognizing the final deal must be comprehensive.

Japan recently announced its intention to join the TPP trade talks, but countries currently participating in the negotiations must agree to allow Japan in. Several countries soon are expected to make a decision on Japan’s entry. The Obama administration on Friday agreed to accept Japan into the trade negotiations.

The TPP is a regional trade negotiation that includes the United States, Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, which account for a combined 30% of global GDP. Japan already has free trade agreements with seven of the 11 TPP countries: Brunei, Chile, Malaysia, Mexico, Peru, Singapore and Vietnam.

“The addition of Japan to the negotiations will exponentially increase the importance of the TPP to our members and to other sectors of the U.S. economy,” said the ag groups represented including American Farm Bureau Federation, Cargill Incorporated, National Milk Producers Federation, National Pork Producers Council, National Potato Council, U.S. Dairy Export Council.

National Pork Producers Council vice president and international trade counsel Nick Giordano said for the trade agreement to be a truly 21st century agreement, as the Obama Administration continues to pledge, it must be comprehensive and must focus on market access outcomes that exceed past U.S. free trade agreements.

Agriculture groups recognize the vast export potential with Japan's entry into the discussions. Japan’s economy is second only to China’s in the region, and it is the fourth largest U.S. agricultural export market overall. U.S. food and agricultural exports to Japan in 2012 totaled $13.5 billion.

Japan's also been known to institute protection measures, such as tariffs and other trade barriers to protect its agricultural industry. Giordano noted that when anyone attempts to negotiate a free trade agreement with the United States the end goal will be to eliminate tariffs and unduly regulations.

"We know agriculture is sensitive not only in Japan but in many countries," Giordano said. He said exclusions are a "slippery slope" and reiterated the greatest overall outcome is when all trade barriers are reduced.

Negotiators will recognize those sensitivities and implement phase out periods that "can make for smoother landing for those projects."

He explained that Japan and the U.S. have been consulting for two years before Japan made its move to join the talks, and Japan is aware of what's at stake and what is expected of them.

Devry Boughner Vorwerk, director of international business relations for Cargill and co-chair of the U.S Business Coalition for TPP, added that because the agreement is regional Japan as do other economies in the region recognize they can't sit on the sidelines. Japan's entry into the discussions has created "great momentum," she added.

Trade negotiations are expected to wrap up this year.