U.S.- Japan Trade Agreement
In early August 2018, USTR held its first round of trade talks with counterparts from Japan. A second round of talks is set for the week of Sept. 24, with President Trump also set to hold a summit meeting with newly reelected Japanese Prime Minister Shinzo Abe. While it is too early to speculate on how these talks will progress, USMEF is encouraged by these developments as improving the level of market access in Japan is absolutely essential if U.S. pork and beef are to remain competitive in this key market. In this report, USMEF summarizes the potential losses that could occur as a result of Japan entering preferential trade agreements with key competitors. UPDATE: Following their summit meeting in New York on Sept. 26, President Trump and Japanese Prime Minister Shinzo Abe announced that the U.S. and Japan will enter negotiations on a trade agreement. USMEF President and CEO Dan Halstrom issued the following statement: Japan is the leading value market for U.S. beef and pork, and there is tremendous room for further export growth. But for that to happen, tariff relief is absolutely essential so that U.S. red meat is on a level playing field with our main competitors. USMEF is very encouraged by the commitment to open negotiations on a U.S.-Japan trade agreement, with specific inclusion of agricultural market access. We hope to see rapid progress in these negotiations. UPDATE: On Oct. 16, 2018, USTR notified Congress that the Trump administration intends to negotiate three separate trade agreements with Japan, the European Union and the United Kingdom. USMEF President and CEO Dan Halstrom issued the following statement: “USMEF’s membership, which includes all sectors of the U.S. red meat supply chain, commends the Trump administration for its decision to move forward on trade negotiations with these key trading partners. Global demand for U.S. pork, beef and lamb is strong and exports are on the rise, but we must have a level playing field for this growth to continue. This is a critical step toward reducing tariffs and other trade barriers – especially in Japan, which is our leading value market for red meat exports. The importance and urgency of the U.S.-Japan trade negotiations cannot be overstated. Japan is a tremendous market for U.S. beef and pork, and recently reopened to U.S. lamb. Among our primary competitors in Japan’s red meat arena, Australia, Mexico and Chile are already benefiting from economic partnership agreements (EPAs) and others will soon capitalize on the Japan-EU EPA and the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which will be implemented in the coming months. This makes it even more essential that the United States secures similar terms for U.S. red meat products.” In November 2018, USMEF filed comments with USTR on a proposed U.S.-Japan Trade Agreement, emphasizing the critical importance of the Japanese market and the urgent need to restore competitiveness of U.S. red meat products versus major competitors as Japan moves forward with implementation of the CPTPP and the Japan-EU EPA. USMEF President and CEO Dan Halstrom testified at USTR’s public hearing on this issue on Dec. 10, 2018. The USMEF Board of Directors also recently approved a resolution expressing support for timely negotiation of a U.S.-Japan Trade Agreement. On Dec. 21, 2018, USTR released its negotiating objectives for a U.S.-Japan agreement. This means formal negotiations can begin anytime after Jan. 20, 2019. UPDATE: USTR has confirmed that the initial meeting in the U.S.-Japan negotiations will be April 15-16, 2019. UPDATE: USTR met with its Japanese counterparts on April 25, 2019, in advance of a White House meeting the following day between President Trump and Prime Minister Shinzo Abe. UPDATE: U.S.-Japan trade negotiations resumed the week of June 10, 2019 with U.S. Trade Representative Robert Lighthizer and Japanese Economic Minister Toshimitsu Motegi meeting on June 13, 2019. Few details are available from this round of talks. UPDATE: On the sidelines of a G20 summit in Osaka, Japan, in early July 2019, the U.S. and Japan agreed to intensify working-level meetings in an effort to accelerate progress towards a trade agreement. The latest round of ministerial-level meetings between U.S. Trade Representative Robert Lighthizer and Japanese Economic Revitalization Minister Toshimitsu Motegi took place Aug. 1-2, 2019. They are expected to meet again before the end of August. UPDATE: On Aug. 25, 2019, President Trump announced an agreement in principle that will greatly improve access for U.S. red meat in Japan – the largest value destination for U.S. pork and beef exports. USMEF President and CEO Dan Halstrom issued this statement: This announcement is tremendous news for U.S. farmers and ranchers, and for everyone in the red meat supply chain, because it will level the playing field for U.S. pork and beef in the world’s most competitive red meat import market. It is also a very positive development for our customer base in Japan, which USMEF and our industry partners have spent decades building. These customers have been very loyal to U.S. pork and beef, but our exports to Japan could not reach their full potential under Japan’s current tariff structure. USMEF thanks the Trump administration for prioritizing trade negotiations with Japan, and especially the officials at USTR and USDA who worked tirelessly to secure this agreement. Favorable access to Japan is a major win, not only for the U.S. red meat industry but for all of U.S. agriculture and for our nation’s rural economy. UPDATE: On Sept. 16, 2019, the Trump administration notified Congress that it has reached an initial trade agreement regarding tariff barriers with Japan and that it intends to enter into the agreement “in the coming weeks.” UPDATE: On Sept. 25, 2019, President Trump and Japanese Prime Minister Shinzo Abe announced completion of the initial trade agreement, which will greatly improve access for U.S. red meat in Japan. USMEF President and CEO Dan Halstrom issued this statement: With Japan being the largest value destination for U.S. pork and beef exports (combined export value in 2018 was $3.7 billion), there is no market more critical to the profitability and prosperity of the U.S. red meat industry. It is therefore imperative that we achieve a level playing field for U.S. pork and beef in Japan, so that the U.S. industry can further expand its customer base in this increasingly competitive market. Today’s announcement is not only excellent news for U.S. farmers and ranchers, but also for Japanese consumers who will have greater access to U.S. pork and beef products. USMEF thanks the Trump administration for prioritizing trade negotiations with Japan and for securing this agreement, which is a major step forward for the U.S. pork and beef industries and for all of U.S. agriculture. UPDATE: On Oct. 7, 2019, the U.S.-Japan trade agreement that was announced Sept. 25 was signed by U.S. Trade Representative Robert Lighthizer and Japanese Ambassador to the United States Shinsuke Sugiyama. USMEF summarized key provisions of the agreement in this bulletin to USMEF members, which also includes links to USTR fact sheets. Before it can be implemented, the agreement must be ratified by the Japanese Parliament. UPDATE: On Oct. 15, 2019, the recently signed U.S.-Japan trade agreement received cabinet-level approval in Japan, clearing the way for consideration by the Japanese Parliament. UPDATE: The Lower House of the Japanese Parliament approved the agreement on Nov. 19, 2019, and it will now be considered by the Upper House. The current parliamentary session is scheduled to end Dec. 9. UPDATE: The Upper House of the Japanese Parliament approved the agreement on Dec. 4, 2019, clearing the way for the agreement to take effect in January 2020. USMEF President and CEO Dan Halstrom issued this media statement.