Holding Japan Accountable in Trade Negotiations

May 30, 2014 Issues: Agriculture, Trade, Ways & Means

When Japan joined negotiations for the Trans-Pacific Partnership (TPP) trade agreement in 2013, I was optimistic we could expand market access for Nebraska exporters in one of the world’s largest economies.  Japan has a historically closed market, but recently had shown signs of progress.  By joining the TPP negotiations, Japan agreed to eliminate barriers as part of an ambitious comprehensive agreement.

Unfortunately, recent reports indicate Japan is insisting on hundreds of tariff exemptions on agriculture products.  For Japan to maintain an outdated policy of significant tariff and non-tariff trade barriers is fundamentally inconsistent with the commitment it made when it joined TPP. 

Failure to resolve these issues is causing gridlock in the TPP negotiations, and threatens the agreement’s ability to pass in Congress.  Some agriculture groups are already calling for the United States to pursue TPP without Japan, but I hope we can avoid this step.

Our bilateral trade relationship with Japan is important.  A comprehensive TPP agreement with Japan would make strategic and economic sense, and benefit consumers in the United States, Japan, and the 10 other participating nations.  However, these benefits only materialize if we make these agreements fully enforceable and hold all of our trading partners accountable for addressing trade comprehensively, without broad exclusions.

Last month, I organized a group of 63 Members of Congress to write United States Trade Representative Michael Froman.  In the letter, we asked the Obama Administration to refuse to close TPP negotiations with Japan’s participation if it continues to fall short of what we expect of all of our trade agreement partners.

To enhance Congressional authority and put forward a framework for negotiations, Congress should pass the Bipartisan Trade Priorities Act.  This legislation would help our negotiators ensure Nebraska products receive fair treatment by encouraging all nations, including Japan, to come to the table with their best offer.

Refusing to eliminate agriculture tariffs is also bad policy for Japanese consumers given the diminishing role of agriculture in their national economy.  The Organization of Economic and Development (OECD) reports agriculture’s share of Japan’s GDP dropped from nine percent to one percent over the past half century.  More than half of farm households in Japan do not have a family worker under the age of 65.  By comparison, the number of Nebraska farmers younger than 35 increased by 42 percent in 2012.

Increased international trade has the potential to benefit exporters and consumers.  I hope the Obama Administration will continue to insist on an ambitious TPP agreement which will open new markets for all American exporters, including farmers and ranchers.  If we give in to Japanese demands for broad exclusions, we would miss an important economic opportunity and undermine future trade negotiations.