Upcoming trade deal with Japan should help U.S. farmers

The U.S. is on the verge of a trade deal with Japan that will open the Japanese market to American beef, pork and other food products.

President Donald Trump and Japanese Prime Minister Shinzo Abe are expected to approve the deal at a meeting on the sidelines of the U.N. General Assembly gathering in New York next week. Trump called it an "initial trade agreement" in a statement earlier this week.

"This is a big deal for the U.S. agriculture community, particularly at a time when the China trade war is disproportionately impacting them," Wendy Cutler, vice president of the Asia Society Policy Institute, said on a visit to Minneapolis.

"They've always said 'We don't want subsidies from the U.S. government, we want new market access.' In Japan, this will be new market access," Cutler said.

The Trump administration is also nearing terms on a trade deal with India, aiming to be wrapped at the U.N. meeting as well. The White House has portrayed both as "minideals" that are limited in scope and won't require congressional approval.

With Japan, the U.S. has been seeking access for food products that is similar to what the two countries, along with 10 others, agreed to in forming the Trans-Pacific Partnership trade deal during the Obama administration. Trump pulled the U.S. out of that multilateral pact on his third day in office in early 2017.

Japan and the other countries went ahead with a modified form of TPP that did not include the U.S., a move that left U.S. farmers and other exporters behind in selling goods in Japan, which has the third-largest economy in the world after the U.S. and China.

Though specific terms are still being hammered out, it appears that U.S. farmers will get access to Japan at the stage of tariff reduction that the countries that stuck with the modified TPP enjoy.

"Most of those other countries have experienced two stages of cuts. We would come in right at that same stage," said Cutler, a former U.S. trade negotiator who was involved in the TPP talks and led the U.S. side in forming a free-trade agreement with South Korea.

She left government before Trump's election. In a speech hosted by Global Minnesota and Sasakawa Peace Foundation USA this week, Cutler said trade experts knew that TPP would become a political football during the 2016 campaign but that walking away from the deal has been costly to U.S. businesses and farmers.

"I applaud securing agricultural market access, but we should have gotten that, in my view, two years ago," she said. "If we didn't leave TPP, we'd be competing in those markets right now."

The Trump administration has focused on reviving the agriculture-related market access portions of TPP with a plan to negotiating a more detailed trade pact with Japan in the future.

Evan Ramstad • 612-673-4241