From U.S. Wheat Associates
When the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) enters into force Dec. 31, 2018, Japan will grant preferential access to wheat export countries that are in the agreement. This has the potential to slash sales to a crucial market for U.S. wheat farmers. That is why U.S. Wheat Associates (USW) President Vince Peterson urged the U.S. Trade Representative (USTR) to seek a rapid solution to this vulnerability through trade negotiations with Japan.
Testifying Dec. 10 at a USTR public hearing and through written testimony, Peterson thanked the Trump Administration for making negotiations with Japan a priority and explained the risk to wheat export sales without a quick U.S.-Japan agreement.
The CPTPP will grant preferential access to Canadian and Australian wheat exports, he said, by reducing the effective tariff on their wheat. Eventually, this reduction will be about $70 per metric ton, or 45 percent below the current effective tariff applied to U.S. wheat. Because Japan has no obligation to change this tariff reduction schedule, Peterson said it will likely shut most U.S. wheat exports out of the Japanese market and undo decades of market development work.
“U.S. Wheat Associates has had an office in Tokyo for more than 60 years,” he said. “We have invested countless hours and millions of hard-earned farmer dollars and federal export market development program funds building this market. During that time, the Japanese milling industry has become an indispensable partner for U.S. wheat farmers.”
Peterson added that over the last five marketing years, Japan is the largest, most reliable and valuable market for U.S. wheat and consistently returns almost $1 billion per year to U.S. wheat farmers and the grain trade.
“All that is at risk without a U.S.-Japan agreement that quickly ends the preference Canada and Australia gain as members with Japan of the CPTPP,” Peterson said. “We thank you for understanding the plight of these farmers, who already face severe trade disruptions in other markets.”
Looking ahead, Peterson added, “U.S. wheat farmers and Japan’s flour milling industry hope that we can maintain provisional equivalence for U.S. wheat imports while our two countries conduct ongoing, good faith negotiations. And we urge the Administration to act quickly to save our market in Japan.”
For more information about what is at stake for U.S. wheat farmers under the CPTPP agreement, visit the USW website at https://www.uswheat.org/policy/trade-negotiations/ and click on “Trans-Pacific Partnership (TPP).” Use this link to access USW’s written submission to the USTR on trade negotiations with Japan.