American agriculture stands to gain significantly from the ongoing multi-lateral Trans-Pacific Partnership (TPP) trade deal. Twelve Pacific Rim nations, which together represent a third of global trade, are attempting to eliminate tariffs between their countries. Just last year, 41 percent of a record $141 billion in American ag exports were bound for the Asia-Pacific region.
But there’s one major holdup before a deal can be finalized: Japan believes some of its ag products, like beef and pork, are “sensitive” to competition with foreign exports, and should be exempt from the talks. In Japan, the average ag tariff is about 40 percent while U.S. ag tariffs average around 12 percent.
At a stop at the Iowa State Fair to discuss the role of exports in President Obama’s trade agenda, U.S. Trade Representative Michael Froman says progress on the issue won’t happen overnight.
He says, “Well, they’ve started, we are engaged in negotiations, the President visited there the end of April and that led to the beginning of real negotiations over agriculture. We’ve reached agreement that all product areas will be covered. There’ll be no exclusions. And that’s an important step. And now we’re going literally product by product, line by line to figure out how we can achieve meaningful market access for all of our products.”
Before Japan joined the talks early last year, Japanese Prime Minister Shinzo Abe confirmed with President Obama that an agreement to eliminate all tariffs on all products was not a precondition for a seat the negotiating table.
Last Saturday Iowa Senator Chuck Grassley was also discussing trade deals at the Iowa State Fair, and says he believes that Japan’s insistence that some products be considered sensitive runs counter to the goals of the TPP.
He says, “For a long period of time there were five sensitive products [that] would not be on the table and so I was very resentful. Of listen[ing] to the plea of Japan to come into the agreement, and then not keeping their word. Now there’s been some movement in that area I can’t quantify the movement that’s been, and let’s hope out of that comes progress.”
The final hurdle for the deal will be whether or not Congress grants the President Trade Promotion Authority or TPA, which allows the Executive Branch to broker trade deals which the Legislative Branch can pass or reject, but not amend. TPA gives trading partners confidence that an agreed-upon deal won’t be changed at the eleventh hour, though some, such as Grassley, believe the mid-term elections will postpone any TPA decisions from Capitol Hill until after November.