Experts Call for a US-Japan Bilateral Trade Agreement


Two years after the United States withdrew from the Trans-Pacific Partnership, the United States and Japan have reopened negotiations for a bilateral trade agreement. The talks are a welcome development, especially in light of the Japan – European Union Trade Agreement which went into effect on February 1st of this year. That agreement will remove 97% of tariffs that Japan applies to European goods and 99% of those applied by the European Union and it will no doubt hurt America’s trade to Japan.

Japanese Prime Minister Shinzo Abe was recently re-elected on a platform emphasizing that the United States would need to accept the standards Japan put forth in the Trans-Pacific Partnership in order to reach a bilateral trade agreement, leaving President Trump little room to negotiate for different terms than the ones he rejected shortly after his inauguration in 2017.

Japan was compelled to reopen the discussion in exchange for relief from American tariffs on automobiles. Meanwhile, American food producers and manufacturers, including our frozen food and canned food suppliers, have expressed anxiety over the long-awaited negotiations, pointing out that other countries have made inroads in trade with Japan while the United States has been subject to higher tariffs and other trade penalties over the past two years.

Representatives from the American beef industry expect trade to decline precipitously if a trade agreement is not met. Today, American producers supply 43% of Japan’s beef, but experts fear this number could drop to 30% by 2028.

Similarly, Japan is currently the biggest consumer of American wheat products, but experts anticipate that Canadian and Australian wheat could replace the United States’ market dominance.

Countries that currently benefit from multilateral trade partnerships with Japan include Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam, as well as the European Union.

Food manufacturers and producers from these trade partners have advantages such as a tariff rate approximately 10% lower than tariffs levied against American imports.

As American food producers risk losing out to international competitors, experts emphasize both the need for a bilateral trade agreement between the United States and Japan and the reality that Prime Minister Abe may have reopened negotiations without any intention of providing the concessions that the United States desires.









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