The agreement reduces or eliminates tariffs on US$7.2-billion worth of American ag products
By Diego Flammini
The United States and Japan have officially signed a trade agreement that includes expanded market access for American ag products.
U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe put pen to paper on an early version of the United States-Japan Trade Agreement on Wednesday in New York.
The bilateral agreement includes a major agricultural component as the deal will eliminate or reduce tariffs on about US$7.2-billion worth of U.S. farm goods.
“This is a huge victory for America’s farmers, ranchers and growers,” President Trump said before signing the deal. “And that’s very important to me.”
Agriculture Secretary Sonny Perdue also applauded the deal.
“This agreement between the United States and Japan is a better deal for the entire U.S. economy, but it a particularly big win for our farmers and ranchers,” he said in a Sept. 25 statement.
Grain sorghum is among the products that will no longer face Japanese import tariffs. Sweet corn and walnuts are also on the tariff-free list.
Japan purchased US$66-billion worth of U.S. grain sorghum in 2017 and those imports faced a tariff of 1.5 percent.
Sorghum prices have decreased this year from about US$170 per metric ton in February to about US$148 per metric ton in August, World Bank says.
Removing the tariffs and expanding market access in Asia is good news for the ag industry.
“Japan has become a stable market for our farmers with growing interest from the consumer and feeding industries, and we look forward to increased market access, duty free, achieved through this agreement,” Dan Atkisson, chairman of National Sorghum Producers, said in a statement Wednesday. “We also feel this relationship with Japan marks an important step forward in further expanding trade relationships with southeast Asia where there are valuable market growth opportunities.”
The U.S. wheat industry will benefit from the trade agreement too.
Japan will provide preferential access for U.S. wheat and wheat products through a country-specific quota. These quotas allow trading partners to import a specific quantity of an item tariff free.
U.S. wheat will enter Japan with the same market access as some competitor grain.
“This agreement puts U.S. wheat back on equal footing with wheat from Canada and Australia that currently have a tariff advantage under a separate trade deal,” Doug Goyings, chairman of U.S. Wheat Associates, said in a Sept. 25 release. “We applaud the negotiators from both countries who worked very hard to reach an agreement that is so important to wheat farmers and to their flour-milling customers in Japan.”
Japanese ag products will receive some U.S. market access advantages in the deal.
America will remove or eliminate tariffs on US$40-million worth of Japanese ag products, including soy sauce, green tea, chewing gum and persimmons.