Tag Archives: Japan

Japan and the U.S. are accelerating trade talks in hopes to reach a quick agreement. Japanese Prime Minister Shinzo Abe  indicated the U.S. and Japan will speed up trade talks as Tokyo faces increased pressure to reach a deal in the next six months to avoid auto tariffs.

However, Politico reports talks between the two likely won’t advance quickly until after Tokyo’s election in July. Trump, ending a summit and visit to Japan, says agriculture products are “heavily in play” in the talks, particularly U.S. beef. Farmers in the U.S. are eager to see an agreement since Japan and other nations entered the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, after the U.S. left the then-called Trans-Pacific Partnership in 2017.

Trump suggested an announcement on parts of an agreement could come sometime in August. Trade experts expect a deal to take longer, however, as the talks, focusing on automobiles and agriculture, will take more time than predicted by the U.S. and Japan.

Prime Minister Shinzo Abe has won a respite from U.S. pressure on trade for now, but analysts expect President Donald Trump to push Japan in a few months into making concessions on agriculture and automobiles as he looks for a major win to bolster his 2020 re-election bid.

In official and informal talks Sunday and Monday during Trump’s state visit to Japan, the U.S. leader indicated Washington would not press Tokyo for a bilateral trade deal until after a Japanese House of Councillors election slated for July, apparently taking into consideration Abe’s desire to avoid tariff-cutting pressure on farmers.

Trump, however, complained about the “tremendous” trade imbalance between the two countries and said there would be some announcements regarding bilateral trade “probably in August.”

Given that farmers have been a reliable source of votes for Abe’s Liberal Democratic Party, he would not want to upset them — especially amid speculation that he may dissolve the House of Representatives for a snap election to be held simultaneously with the upper house election.

In a meeting with Abe in Washington just a month ago, Trump said he wants to “get rid of” Japan’s “very massive” tariffs on American farm products in a deal he said he might strike with Abe by late May, although negotiations for a bilateral trade agreement started in April.

“Mr. Trump does Mr. Abe a favor this time,” said Takeshi Minami, chief economist at the Norinchukin Research Institute in Tokyo. “After the upper house election, the president may use the favor to extract concessions from the prime minister in a deal that would be more favorable to the United States.”

Abe and Trump are expected to meet on the sidelines of a Group of Seven summit in late August in France and the U.N. General Assembly in September in New York.

Trump is likely to press Japan to make concessions, particularly on increased access to its agricultural market to appease American farmers and ranchers amid the 2020 presidential race, according to analysts. Just like Abe, Trump needs votes from U.S. farming states for re-election.

“Great progress being made in our Trade Negotiations with Japan. Agriculture and beef heavily in play,” Trump tweeted Sunday. “Much will wait until after their July elections where I anticipate big numbers!”

U.S. farmers and ranchers are pushing the administration to level the playing field because they have started losing market share in Japan following the recent enactment of a revised Trans-Pacific Partnership, the 11-nation regional free trade agreement, and an FTA between Japan and the European Union.

Trump withdrew the United States from the TPP — which includes Japan and farming nations such as Australia and Canada — in 2017, citing his preference for bilateral trade deals.

For its part, Japan has been calling for the elimination of U.S. tariffs on Japanese vehicles, including a 2.5 percent levy on cars and a 25 percent duty on trucks as agreed to by former President Barack Obama’s administration in the TPP. Tokyo levies no taxes on imported vehicles.

But the Trump administration has expressed reluctance to remove those auto-related tariffs. The president regards automobiles as emblematic of the trade imbalance with Japan as automobiles and car parts accounted for about 75 percent of the U.S. trade deficit as of 2017.

In a threat to Tokyo and other major auto exporters, Trump on May 17 delayed his decision on a potential 25 percent tariff on imported cars and vehicle parts for up to six months, and directed U.S. Trade Representative Robert Lighthizer to negotiate deals with Japan and others to address what his administration perceives as a threat to U.S. national security.

“I think they both understand that agriculture and automobiles are somehow going to be a part of any deal, but exactly how and when agriculture and autos is going to be addressed is still very much up for debate,” said Matthew Goodman, senior adviser for Asian economics at the Center for Strategic and International Studies, a Washington think tank.

Referring to the 180-day window for negotiations, Goodman said Trump is likely to use what the administration calls “the threatened impairment of national security” as an excuse to demand voluntary export restraints or quotas from Japan and other major auto exporters — a practice that is restricted by the World Trade Organization.

Experts say the speed of Japan-U.S. talks will depend on whether the Trump administration demands one-sided concessions from Japan, or is willing to live with more realistic compromises.

“If the U.S. insists on agricultural concessions beyond the TPP levels or on quotas restraining Japanese auto exports to the U.S., I think we are in for protracted negotiations,” said Mireya Solis, director of the Center for East Asia Policy Studies at the Brookings Institution, a Washington think tank.

Japanese economic revitalization minister Toshimitsu Motegi, Lighthizer’s counterpart in the bilateral trade talks, has said Tokyo opposes quotas and other trade-distorting measures that are incompatible with WTO rules.

“The fastest scenario would ensue if the U.S. and Japan agree to reinstate the market access schedules they had agreed under the TPP,” Solis said. “Chances of that are slim, however, because of President Trump’s obsession with the trade deficit and his predilection for tariffs.”

Underscoring Solis’ concern, Trump blasted the TPP, telling reporters Monday that the multilateral pact “would’ve destroyed our automobile industry and many of our manufacturers.”

Niigata, Japan– Western Hemisphere agriculture leaders met Sunday on the margins of the G-20 Agricultural Ministerial in Niigata, Japan, affirming their intent to work together to champion global food security and agricultural trade on the basis of sound science and risk analysis principles. Following the meeting, top agricultural officials from Argentina, Brazil, Canada, Mexico, and the United States issued the following statement.
“Together, we stand to work in partnership, and jointly with additional countries, to support regulatory approaches that are risk- and science-based, predictable, consistent, and transparent. Our five nations recognize that innovations in the agriculture sector contribute to improved productivity, including by smallholder and young farmers, and rural women, in a safe and sustainable manner, and to our countries’ ability to meet the ever-growing global demand for food. With the world’s population projected to reach 9.8 billion by 2050, science and innovation will play a key role in enabling agriculture producers to safely feed everyone.
“As Western Hemisphere agricultural leaders, we affirm our intent to work together to champion global agricultural trade based on sound science and risk analysis principles. We also affirm our intent to allow farmers and ranchers access to the tools needed to: increase productivity; reduce food loss and waste; protect soil, water and biodiversity; and produce safe, nutritious, affordable food products year-round, to the benefit of the world population.”

TOKYO (AP) — U.S. Agriculture Secretary Sonny Perdue has picked up his barbeque tongs to convey his message to Japan: Buy more American beef. Perdue said Monday that as a top consumer of U.S. beef, Japan should treat the U.S. fairly.

He said he hoped President Donald Trump and Japanese Prime Minister Shinzo Abe will strike a trade deal during his boss’s visit to Japan later this month, but acknowledged more time might be needed.

South Korea continues to be the growth leader for U.S. beef exports, with first quarter volume climbing 8% year-over-year to 56,173 mt, while value ($414.2 million) was 13% above last year’s record-shattering pace. U.S. beef has achieved remarkable success in Korea’s traditional retail and restaurant sectors but is also rapidly gaining popularity in outlets such as convenience stores and e-commerce platforms. Recent export growth is not only in the ever-popular short rib category, but also in short plate, briskets, clods and rounds, as end-users recognize the versatility and affordability of high-quality U.S. beef.

Beef exports to Japan were moderately lower than a year ago in March, but still finished the first quarter 2% above last year’s pace in volume (74,147 mt) and 5% higher in value ($480.4 million). This was fueled by growth in variety meat exports, with the U.S. shipping more tongues and skirt meat to Japan. U.S. beef faces a widening tariff disadvantage in Japan compared to imports from Australia, Canada, New Zealand and Mexico, and the latest tariff reduction for these countries didn’t take effect until April 1.

“U.S. beef cuts are still subject to a 38.5% tariff in Japan while our competitors’ rate is nearly one-third lower at 26.6%,” explained Dan Halstrom, USMEF president and CEO. “This really underscores the urgency of the U.S.-Japan trade negotiations, which must progress quickly if we are going to continue to have success in the leading value market for U.S. beef and pork.”

Japan’s tariffs on beef variety meat are lower, but U.S. shipments are subject to a duty of 12.8% while competitors pay less than half that rate.

Other first quarter highlights for U.S. beef include:

  • Beef muscle cut exports to Mexico continued to shine, with first quarter volume up 14% from a year ago to 35,481 mt and value climbing 16% to $220.7 million. While variety meat exports trended lower year-over-year, combined beef/beef variety volume still increased 1% to 57,591 mt while value jumped 12% to $280.2 million.
  • Exports to Taiwan were 3% above last year’s record pace at 13,487 mt, though value slipped 7% to $117.8 million. U.S. beef dominates Taiwan’s chilled beef market with nearly 75% market share – the highest of any Asian destination.
  • CAFTA-DR markets continue to be an excellent source of growth for U.S. beef exports, with first quarter volume to Central America up 15% from a year ago to 3,628 mt and value up 19% to $21.2 million. Exports to the Dominican Republic soared 71% to 2,345 mt valued at $18.9 million (up 65%).
  • Lower exports to Hong Kong and Canada offset some of the first quarter growth in other markets. Exports to Hong Kong trailed last year’s pace by 36% in volume (21,304 mt) and 30% in value ($177.1 million). Exports to Canada were down 14% in both volume (23,199 mt) and value ($143.8 million).
  • U.S. exports to China were up 4% from a year ago to 1,723 mt, but this came at lower prices as export value fell 17% to $13.2 million. There is tremendous potential in the Chinese market for U.S. beef, but due to China’s restrictive import requirements and retaliatory duties pushing the tariff rate to 37%, U.S. prices are significantly higher than the competition. By comparison, most beef suppliers are subject to a 12% tariff in China while beef from New Zealand is duty-free and Australian beef pays only a 6% rate. Australia’s grain-fed beef exports to China in the first quarter totaled 14,347 mt, up 77% year-over-year.

Agriculture Secretary Sonny Perdue will travel to Japan and South Korea next week to participate in the G-20 Agriculture Ministers’ Meeting. The travel itinerary also includes meetings with his counterparts on global agriculture issues.

The Secretary will deliver a keynote address at the G-20 Innovation and Agriculture seminar this Saturday and speak at the Cotton Council International’s annual Cotton Day on May 14. As part of his meetings, Perdue will join his counterparts from Argentina, Brazil, Canada, and Mexico to discuss global agriculture issues.

The Secretary has planned meetings with U.S. Ambassador to Japan William Hagerty, and Japan’s State Minister of Health, Labor, and Welfare, along with Korea’s Agriculture Minister.

During the trip, Perdue will attend a U.S. Meat Export Federation promotional event highlighting the importance of the Japanese market for U.S. meat, as USDA says Japan is the top overseas market for U.S. beef and pork. Finally, Perdue will attend the U.S.-Japan Agriculture Hall of Fame Induction Ceremony, as part of his travels.