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US-Japan Trade Agreement Signed

Secretary Perdue Statement on Signing of US-Japan Trade Agreement
(Washington, D.C. – September 25, 2019) – U.S. Secretary of Agriculture Sonny Perdue today issued the following statement regarding the signing of the new United States-Japan Trade Agreement:
“This agreement between the United States and Japan is a better deal for the entire U.S. economy, but is a particularly big win for our farmers and ranchers. When I visited Japan in May for the G20, I made it clear that the U.S. is Japan’s best customer and we felt that relationship was not reciprocal. This agreement helps level the playing field. I thank President Trump and Ambassador Lighthizer for delivering on their promise to open markets around the world for America’s farmers and ranchers.”
Background:
The U.S.-Japan Trade Agreement will provide America’s farmers and ranchers enhanced market access in our third largest agricultural export market. When implemented, this Agreement will enable American producers to compete more effectively with countries that currently have preferential tariffs in the Japanese market. The deal President Trump is delivering will provide our farmers, ranchers, and agribusinesses with market access for high quality U.S. food and agricultural products to 127 million Japanese consumers.
In the U.S.-Japan Trade Agreement, Japan has committed to provide substantial market access to American food and agricultural products by eliminating tariffs, enacting meaningful tariff reductions, or allowing a specific quantity of imports at a low duty (generally zero).  Importantly, the tariff treatment for the products covered in this agreement will match the tariffs that Japan provides preferentially to countries in the CP-TPP agreement.
KEY ELEMENTS: U.S. AG EXPORTS TO JAPAN
Out of the $14.1 billion in U.S. food and agricultural products imported by Japan in 2018, $5.2 billion were already duty free. Under this first-stage initial tariff agreement, Japan will eliminate or reduce tariffs on an additional $7.2 billion of U.S. food and agricultural products.
Tariff Reduction: For products valued at $2.9 billion, Japan will reduce tariffs in stages. Among the products benefitting from this enhanced access will be:
  • fresh beef
  • frozen beef
  • fresh pork
  • frozen pork
Tariff Elimination: Tariffs will be eliminated immediately on over $1.3 billion of U.S. farm products including, for example:
  • almonds
  • blueberries
  • cranberries
  • walnuts
  • sweet corn
  • grain sorghum
  • food supplements
  • broccoli
  • prunes
Other products valued at $3.0 billion will benefit from staged tariff elimination. This group of products includes, for example:
  • wine
  • cheese and whey
  • ethanol
  • frozen poultry
  • processed pork
  • fresh cherries
  • beef offal
  • frozen potatoes
  • oranges
  • egg products
  • tomato paste
Country Specific Quotas (CSQs): For some products, preferential market access will be provided through the creation of CSQs, which provide access for a specified quantity of imports from the United States at a preferential tariff rate, generally zero. CSQ access will cover:
  • wheat
  • wheat products
  • malt
  • glucose
  • fructose
  • corn starch
  • potato starch
  • inulin
Mark Up: Exports to Japan of wheat and barley will benefit from a reduction to Japan’s “mark up” on those products. Japan’s imports of U.S. wheat and barley were valued at more than $800 million in 2018.
Safeguards: This agreement provides for the limited use of safeguards by Japan for surges in imports of beef, pork, whey, oranges, and race horses, which will be phased out over time.
KEY ELEMENTS: JAPAN AG EXPORTS TO THE UNITED STATES
The United States will provide tariff elimination or reduction on 42 tariff lines for agricultural imports from Japan valued at $40 million in 2018. Products include:
  • certain perennial plants and cut flowers
  • persimmons
  • green tea
  • chewing gum
  • certain confectionary products
  • soy sauce
The United States has also agreed to modify its global WTO tariff rate quota for imports of Japanese beef, enabling Japanese beef producers to compete for a larger share of the global TRQ quantity.

Secretary Naig Says U.S.-Japan Trade Deal Creates New Opportunities for Iowa Farmers

DES MOINES, Iowa (Sept. 25, 2019) – Iowa Secretary of Agriculture Mike Naig was in New York City today as President Trump signed a trade deal with Japan’s Prime Minister Abe. Secretary Naig, along with other agricultural leaders, participated in a signing ceremony recognizing the bi-lateral trade agreement.

“Japan is one of Iowa’s most important trading partners,” said Secretary Naig. “Today’s agreement is a win for agriculture and welcome news as our farmers gear up for harvest. By lowering tariffs on agricultural products, Iowa producers can be more competitive in the Japanese market. This deal helps build the momentum we need to ratify USMCA and reach a long-term trade agreement with China. Thank you, President Trump, for getting this trade agreement done.”

Secretary Naig remains focused on expanding markets and trade for Iowa agriculture. He will be joining Iowa Governor Reynolds on a trade mission to Japan in November. Details on the trade mission can be found here.

2018 Export Statistics

Beef

  • Iowa exported $135 million of beef to Japan in 2018.
  • Japan is the largest export market for Iowa beef producers.
  • U.S. producers sold $2 billion of beef to Japan in 2018, one-fourth of total U.S. beef exports.
  • The U.S. exported 330,217 metric tons of beef to Japan in 2018.
  • U.S. beef sales to Japan could increase by 7-10 percent ($200 million a year).

Pork

  • Iowa exported almost $370 million of pork to Japan in 2018.
  • Japan was the largest export market by value for Iowa pork producers in 2018.
  • U.S. producers sold $1.6 billion of pork to Japan in 2018.
  • The U.S. exported 394,300 metric tons of pork to Japan in 2018.

Corn

  • Iowa exported $491 million of corn to Japan in 2018.
  • Japan was the second largest export market (behind Mexico) for Iowa corn growers in 2018.
  • Japan purchased 11.5 million metric tons of corn from the U.S. in 2018.
  • Japan purchased $2 billion of corn from the U.S. in 2018.

Soybeans

  • Iowa exported $122 million of soybeans to Japan in 2018.
  • The U.S. exported $947 million of soybeans to Japan in 2018.

Sources: U.S. Meat Export Federation, U.S. Grains Council and Iowa Economic Development Authority.

 

Iowa Cattlemen Statement on Trade Deal with Japan

President Trump and Prime Minister Abe of Japan made another step towards a bilateral trade agreement that is expected to greatly benefit the U.S. cattle industry. The agreement will include significant tariff reductions for U.S. beef imported into Japan.

“This bilateral trade agreement with Japan is significant for two reasons. First, Japan is our number one export market by value, and the Japanese are hungry for U.S. beef,” says Matt Deppe, CEO of the Iowa Cattlemen’s Association. “Second, a positive advancement on the trade front is good news for all of Iowa agriculture. Hopefully, this momentum will carry forward to the ratification of USMCA and trade talks with China.”

International trade adds over $300 to the value of every head of cattle in the state of Iowa, and approximately one-quarter of that value is due to exports to Japan. Currently, U.S. beef faces a 38.5% tariff while competitors from other countries like Australia, New Zealand and Canada have a tariff rate of only 26.6%.

Iowa Cattlemen’s Association, together with NCBA, will continue to lobby for increased export opportunities for U.S. beef.



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