(Washington, D.C. – September 25, 2019) – U.S. Secretary of Agriculture Sonny Perdue today issued the following statement regarding the signing of the new United States-Japan Trade Agreement:
“This agreement between the United States and Japan is a better deal for the entire U.S. economy but is a particularly big win for our farmers and ranchers. When I visited Japan in May for the G20, I made it clear that the U.S. is Japan’s best customer and we felt that the relationship was not reciprocal. This agreement helps level the playing field. I thank President Trump and Ambassador Lighthizer for delivering on their promise to open markets around the world for America’s farmers and ranchers.”
Background:
The U.S.-Japan Trade Agreement will provide America’s farmers and ranchers enhanced market access in our third largest agricultural export market. When implemented, this Agreement will enable American producers to compete more effectively with countries that currently have preferential tariffs in the Japanese market. The deal President Trump is delivering will provide our farmers, ranchers, and agribusinesses with market access for high-quality U.S. food and agricultural products to 127 million Japanese consumers.
In the U.S.-Japan Trade Agreement, Japan has committed to provide substantial market access to American food and agricultural products by eliminating tariffs, enacting meaningful tariff reductions, or allowing a specific quantity of imports at a low duty (generally zero). Importantly, the tariff treatment for the products covered in this agreement will match the tariffs that Japan provides preferentially to countries in the CP-TPP agreement.
KEY ELEMENTS: U.S. AG EXPORTS TO JAPAN
Out of the $14.1 billion in U.S. food and agricultural products imported by Japan in 2018, $5.2 billion were already duty free. Under this first-stage initial tariff agreement, Japan will eliminate or reduce tariffs on an additional $7.2 billion of U.S. food and agricultural products.
Tariff Reduction: For products valued at $2.9 billion, Japan will reduce tariffs in stages. Among the products benefiting from this enhanced access will be:
- fresh beef
- frozen beef
- fresh pork
- frozen pork
Tariff Elimination: Tariffs will be eliminated immediately on over $1.3 billion of U.S. farm products including, for example:
- almonds
- blueberries
- cranberries
- walnuts
- sweet corn
- grain sorghum
- food supplements
- broccoli
- prunes
Other products valued at $3.0 billion will benefit from staged tariff elimination. This group of products includes, for example:
- wine
- cheese and whey
- ethanol
- frozen poultry
- processed pork
- fresh cherries
- beef offal
- frozen potatoes
- oranges
- egg products
- tomato paste
Country-Specific Quotas (CSQs): For some products, preferential market access will be provided through the creation of CSQs, which provide access for a specified quantity of imports from the United States at a preferential tariff rate, generally zero. CSQ access will cover:
- wheat
- wheat products
- malt
- glucose
- fructose
- corn starch
- potato starch
- insulin
Mark Up: Exports to Japan of wheat and barley will benefit from a reduction to Japan’s “mark up” on those products. Japan’s imports of U.S. wheat and barley were valued at more than $800 million in 2018.
Safeguards: This agreement provides for the limited use of safeguards by Japan for surges in imports of beef, pork, whey, oranges, and race horses, which will be phased out over time.
KEY ELEMENTS: JAPAN AG EXPORTS TO THE UNITED STATES
The United States will provide tariff elimination or reduction on 42 tariff lines for agricultural imports from Japan valued at $40 million in 2018. Products include:
- certain perennial plants and cut flowers
- persimmons
- green tea
- chewing gum
- certain confectionery products
- soy sauce
The United States has also agreed to modify its global WTO tariff rate quota for imports of Japanese beef, enabling Japanese beef producers to compete for a larger share of the global TRQ quantity.
Shaun Haney joined RFD News to discuss the potential impact of the Trump-Xi summit uncertainty, ongoing agricultural trade talks, and why geopolitical developments could carry important implications for farmers and global commodity markets.
