Sector News

Japan green lights trade deal with United States

December 5, 2019
Food & Drink

Japan’s Upper House approved a trade deal with the United States on Dec. 4. The agreement opens markets and will support expansion of U.S. food and agricultural exports, increase farm income, generate more rural economic activity, and promote job growth.

The deal, previously announced in September, includes Japan eliminating or reducing tariffs on U.S. food and agricultural products.

According to the Office of the U.S. Trade Representative (U.S.T.R.), Japan is the United States’ fourth‐largest agricultural export market.

The U.S. Grains Council (U.S.G.C.) supports Japans approval of the trade agreement.

“The U.S. Grains Council is pleased to hear the United States and Japan have made their trade agreement official, after the Japanese Diet ratified it earlier in the day and it is expected to go into effect on Jan. 1, 2020,” said Ryan LeGrand, president and chief executive officer of the U.S.G.C. “The agreement solidifies trade with our second-largest corn market, immediately reduces U.S. corn and sorghum imports for all purposes to a zero-tariff level, reduces the U.S. barley mark-up and includes a staged tariff reduction for U.S. ethanol and U.S. corn, barley and sorghum flour. In addition, U.S. feed and food corn, corn gluten feed, and D.D.G.S. will continue to receive duty-free market access.”

According to the U.S. Department of Agriculture, 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.

“Japan purchased more than $2 billion of U.S. corn in the most recent marketing year, is an important market for food and feed barley as well as sorghum and promises to be an important future market for U.S. ethanol,” Mr. LeGrand said. “In negotiating and approving this agreement, our countries have built on a long-standing relationship of mutual trust and embodied that sentiment for the foreseeable future. We look forward to continued work with our Japanese partners on a more comprehensive trade package that will address important non-tariff barriers and what we hope is continued improvement in the ethanol sector.”

In November, more than 30 U.S. food and agriculture groups submitted a letter to the U.S. House of Representatives Ways and Means Committee urging support for the swift implementation of a Phase One U.S.- Japan Trade Agreement that was negotiated earlier this year.

Many U.S. agriculture associations support this new deal as it levels the playing field with other countries that are a part of the Comprehensive and Progressive Trans-Pacific Partnership.

By Holly Demaree-Saddler

Source: Food Business News

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