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Has The First Trade Domino Fallen With Japan/U.S. Deal?

Over the weekend it was announced the United States and Japan have reached an agreement in principle on a new, bilateral trade pact. A deal with the Japanese was one of a few trade agreements we were hoping to see finalized so the trade dominoes could begin to fall.

The trade agreement was announced on the sidelines of the G7 summit in France. We don’t have all the details yet, but President Trump has said this will greatly reduce tariffs which United States agriculture products will be facing. The deal should be a big boom for imports of U.S. corn, beef, pork, ethanol, and wine. Fruits and vegetables were conspicuously off the list mentioned by both President Trump and Prime Minister Abe, as there is still some fine print to be worked out there.

The deal should bring the United States on to a more level playing field with countries who were in the Trans-Pacific Partnership (TPP), which is a multi-nation trade deal the United States helped construct and then pulled away from when President Trump took office.

The U.S. Meat Export Federation (USMEF) released the following statement:

“This announcement is tremendous news for U.S. farmers and ranchers, and for everyone in the red meat supply chain because it will level the playing field for U.S. pork and beef in the world’s most competitive red meat import market. It is also a very positive development for our customer base in Japan, which USMEF and our industry partners have spent decades building. These customers have been very loyal to U.S. pork and beef, but our exports to Japan could not reach their full potential under Japan’s current tariff structure.

USMEF thanks the Trump administration for prioritizing trade negotiations with Japan, and especially the officials at USTR and USDA who worked tirelessly to secure this agreement. Favorable access to Japan is a major win, not only for the U.S. red meat industry but for all of U.S. agriculture and for our nation’s rural economy.” 

United States Agriculture Secretary Sonny Perdue commented:

“Japan is a significant market for United States agriculture exports, making today a good day for American agriculture. By removing existing barriers for our products, we will be able to sell more to the Japanese markets. At the same time, we will able to close gaps to better allow us to compete on a level playing field with our competitors. I thank President Trump and Ambassador Lighthizer for their constant support of America’s farmers and ranchers and their hard work negotiating better trade deals around the globe.”

Since the trade deal with Japan was announced, President Trump says Chinese officials have reached out twice to, “get a deal done and stop the spiraling trade war.” President Trump has not said whether he has personally talked with Chinese President Xi on this topic, but this could signal an easing of trade tensions between the two largest economies in the world.

The United States – Mexico – Canada Agreement (USMCA) is also waiting for ratification by the U.S. Congress upon their return from the August recess. There have been issues that House Democrats wanted to be resolved before they would give approval. The USMCA was signed by the leaders of all three countries last November and has already been approved by the Mexican legislative body.

Earlier this year, in Des Moines, U.S. Trade Representative Chief Ag Negotiator Gregg Doud said, “We are waiting for one domino to fall. We just need one of these deals to get the ball rolling.” American Farmers would be more than happy to help to give that ball a shove.

This Article Originally Appeared on the Iowa Agribusiness Radio Network.

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