Content ID


On Cusp of Trade Pact with Japan, Trump Sees no Hurry on China

When President Trump meets Prime Minister Shinzo Abe of Japan on Wednesday, it should be a red-letter day for Trump’s policy of bilateral, rather than multi-nation, trade negotiations. The two leaders are expected to approve a deal on agricultural and digital trade. U.S. food and ag exports could rise as a result.

The agreement would be a success for Trump at a moment when resolution of the Sino-U.S. trade war is uncertain. Both sides said working-level meetings were productive last week and ministerial meetings are planned in early October. But China cancelled farm visits set for the weekend to Montana and Nebraska. And Trump told reporters he is looking for “the big deal” with China, not a partial agreement, and he could wait past the 2020 elections if need be.

Deal-making between Trump and Abe appears to be part of international meetings. They are scheduled to meet on Wednesday on the sidelines of the opening session of the UN General Assembly, roughly a month after they announced an agreement in principle on trade against the backdrop of the G-7 meeting in France.

Neither side has provided details of the tentative agreement. When talks began last year, Japan said it would offer the same tariff reductions for agricultural imports that it granted as part of the Trans-Pacific Partnership (TPP). The U.S. trade representative’s office said the agreement with Japan would “open up markets to over $7 billion” of U.S. farm exports and “lead to substantial reductions in tariff and nontariff barriers,” benefitting beef, pork, wheat, dairy, wine, ethanol, and other products, says the Congressional Research Service.

“We can’t get this deal done fast enough,” said David Herring, president of the National Pork Producers Council, during a Sept. 12 luncheon. Japan is the No. 1 customer for U.S. pork in dollar terms; Mexico is tops in tonnage.

Japan stands third, behind Canada and Mexico, on the list of top U.S. customers for farm exports, with purchases estimated for $12.6 billion this year, or 9% of all ag exports.

Greater access to Japanese consumers was expected to be the big prize for U.S. farmers in the TPP. Trump withdrew from TPP within days of taking office. The remaining 11 countries went forward with “TPP-11,” so they pay lower tariffs on ag products shipped to Japan than do U.S. companies.

The Japanese trade minister said in an interview with broadcaster NHK that he wanted a written assurance that Trump will not impose tariffs on Japanese-built automobiles. Cars are the largest Japanese export to the United States. Trump has said the threat of U.S. tariffs create useful leverage in trade talks.

So far, the United States-Mexico-Canada Agreement is Trump’s leading achievement and it awaits a vote in the House, where Democrats want stronger language on labor, environment, pharmaceuticals, and enforcement. During a news conference on Friday, Trump described a potential signing ceremony for USMCA that included House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer. “I think that’s very important for our country. And I would certainly be willing to say that’s a bipartisan deal,” said the president.

Asked if he would make an interim agreement with China, Trump said on Friday, “We’re looking for the complete deal. I’m not looking for a partial deal. China has been starting to by our agricultural product. If you noticed over the last week – and actually some very big purchases. But that’s not what I’m looking for. We’re looking for the big deal.”

Earlier in the day, he said, “I’m taking care of our farmers out of that [trade war] … Our farmers were targeted and they were targeted for $16 billion. And I made that up to them.”

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
Read more about

Talk in Marketing