Ag Groups Hold Out on Japan's TPP Demands

Ag Groups Hold Out on Japan's TPP Demands

Sen. Chuck Grassley, ag groups remain adamant that Japan's request for agricultural tariff exemptions won't fly

Ag groups have a message for the Japanese delegation in Trans-Pacific Partnership negotiations: agricultural tariff exemptions won't be tolerated.

The tariff exemptions – requested in five categories: pork and beef, dairy, sugar, wheat and barley, and rice and starch – have causing quite a stir among agricultural groups, who say Japan is backtracking on its original agreement to enter TPP negotiations.

"The Prime Minister of Japan wanted to be in TPP. Everything was going to be on the table," Sen. Chuck Grassley, R-Iowa, said Thursday during a press call with representatives of four U.S. ag groups. "We've got to hold their feet to the fire."

Sen. Chuck Grassley, ag groups remain adamant that Japan's request for agricultural tariff exemptions won't fly

Related: Groups Have Concerns, But Express Optimism Regarding TPP

The exemptions, the ag groups explained, would keep tariffs on the products in question from going to zero. They would also undermine tariff assurances made by other participating countries, including Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam.

"If the United States is going to open its market to competition from other TPP countries, then so should Japan," argued National Cattlemen's Beef Association President Bob McCan, who was joined on the call by representatives from the American Farm Bureau, U.S. Wheat Associates and National Pork Producers Council.

"We feel that Japan does not deserve special treatment, and it should be treated the same as all the other TPP countries," he said.

The urgency comes just a few weeks after Grassley, along with 16 other colleagues, sent a letter to U.S. Trade Representative Michael Froman, requesting assurance that the U.S. wouldn't budge on Japan's requests.

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They argued that if allowed to go forward, it would open the flood gates for more exemptions – and higher prices.

"Exempting food from trade deals will put upper pressure on global food prices," said Nick Giordano, vice president and counsel for international affairs, NPPC. "It is not a wise idea. It undermines global security."

Not only do the groups and Grassley oppose the exemptions on an economic level, they understand it will result in more exemption requests during other free trade agreements and negotiations on the Transatlantic Trade and Investment Partnership.

"Japan is an economically developed nation – not some third-world country," Grassley said. "The third-largest country in the world can't make protectionist moves like that without having a ripple effect."

Trade Promotion Authority
Though there's significant concerns about the stipulations in the agreement, also in question is the future of the Trade Promotion Authority, a measure that would allow President Barack Obama to "fast-track" the TPP by limiting Congress' ability to tack on amendments.

Introduced in the Senate in January, the controversial measure has approval from several ag groups, who argue that without it, other countries won't sign on to trade deals. That's because Congress would have the ability to add and subtract language before a deal's passage.

Related: TPA Legislation Receives Wide Support

For negotiations to keep moving forward on the Trans Pacific Partnership and the Transatlantic Trade and Investment Partnership discussions, the TPA is needed, AFBF President Bob Stallman said in January.

Grassley agrees. "We're not going to get any of these nations to sign unless we get Trade Promotion Authority through the Congress and Senate," he said.

But there's opposition, Grassley admits. Both Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi are staunch opponents.

"[President Obama] has to spend some political capital to get TPA through, and it he doesn’t do that, then everything else we are talking – in regard to Japan or anyone else – is kind of moot."

Negotiations continue
The future of the agreement may hinge on TPA, but President Obama remains scheduled to visit Japan and meet with Japanese Prime Minister Abe in April. Acting Deputy Trade Representative Wendy Cutler will also finish up meetings with Japanese Ambassador Hiroshi Oe Friday.

Despite the roadblocks that are political disagreements and Japanese demands, ag groups say the outcome of TPP negotiations will have long-standing consequences for U.S. producers.

NCBA President Bob McCan called the situation a "serious juncture," pointing out that Japan is the top export market for U.S. beef. And pork producers, too, have enjoyed huge exports in recent years, reaching $6 billion within the last year.

"We are the poster child for expanding trade, but this is a landscape-changing legacy issue that will impact our producers for the next 25 years," said NPPC's Giordano. "It is impossible to rationalize how we could support an outcome that would establish a terrible precedent and rob our industry of billions of sales."

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