A new Japanese trade deal was announced this morning after President Donald Trump and Japanese Prime Minister Shinzo Abe agreed to terms to benefit both countries. The new agreement addresses several agricultural and industrial tariffs, as well as digital commerce. Japan is the fourth-largest export market for American agricultural products, averaging nearly $11 billion annually over the past 20 years.
“It really is a great day for U.S. farmers and ranchers. They now have new and expanded access to one of the largest and most affluent markets in the word,” said Deputy Agriculture Secretary Steve Censky. “Right now, we export about $14 billion worth of agriculture products to Japan, around $6 billion of that is already duty-free. But this agreement eliminates or reduces significantly the tariffs on another $7 billon of agriculture trade.”
There has been concern regarding the competitiveness of American ag products in the Japanese market after the U.S. opted out of the Trans-Pacific Partnership (TPP). The new Japanese trade deal should put U.S. products on a level playing field with other countries who were included in the TPP. “Duties on 90 percent of our dutiable trade that we have with Japan are either going to be eliminated or significantly reduced and it allows us to be more competitive with our competitors,” said Censky.
The agreement will have a significant impact on several commodities, most notably the beef and pork industries. Censky also highlighted some of the other U.S. crops that will benefit from the terms of the new agreement. “Japan under this agreement has agreed to immediately eliminate the tariff on a number of products – around $1.3 billion worth of products – including walnuts, almonds, sweet corn, grain sorghum, broccoli, dried plums, and more.”
Japanese officials have indicated their intention to move quickly in efforts to have the agreement approved by Parliament. The agreement will not require any Congressional approval, as the provisions are within the authority of the President and the U.S. Trade Representative. “Those steps are going to lead to implementation just as quickly as possible at the beginning of the year,” said Censky.