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Slow Road to Japanese Agriculture Trade

DANIEL LOOKER 03/24/2014 @ 10:22am Business Editor

With the biofuels boom slowing, trade and exports are regaining importance. When Agriculture Secretary Tom Vilsack addressed the Commodity Classic last month, he got applause with a promise to use USDA trade promotion to sell biofuels. “We think the world is ready for American biofuel,” Vilsack said.

Japan, however, may not be ready for more American rice. One of America’s best customers for farm products is balking at putting long-protected domestic agriculture on the table for negotiations over a new Trans-Pacific Partnership, or TPP. The zone of freer trade would include a dozen nations on both sides of the Pacific (but not China), an area with 40% of the world’s GDP.

Just before a ministerial meeting in Singapore last month to move negotiations along, Japan was asking for special treatment for its agriculture. 

That prompted a bipartisan group of 18 U.S. senators to write U.S. Trade Representative Michael Froman. Led by Michael Bennett (D-CO) and Charles Grassley (R-IA), they raised concerns that Japan hasn’t yet made a comprehensive offer on ag products.

“In previous trade negotiations, the United States requested and received full and comprehensive liberalization in the agricultural sector from both developed countries like Japan as well as developing countries,” the senators wrote. “By requesting special treatment for its agricultural sector in the TPP, Japan may upset the careful balance of concessions that the 11 [other] economies involved in the negotiations have achieved.”

Talks in Singapore ended without resolving that issue.

“A lot of people are watching the United States and Japan,” says Floyd Gaibler, head of trade policy for the U.S. Grains Council. “Rice, wheat, sugar, meat products, and dairy are especially sensitive. If the United States and Japan – the two biggest economies involved in the talks – can reach an agreement, it would be an important step toward successfully concluding the broader negotiations.”

The U.S. has domestic hurdles, too. In an election year, Democrats in the Senate are reluctant to give the Obama administration the trade promotion authority it needs to complete a TPP deal. Some observers see a TPP as months – even years – away.

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Senator Grassley and his Mower