Whether this statement will achieve its desired effect is an open question. But again, people are paying attention. A couple of headlines make that point:
"US eliminates its rivals: wants Japan to be excluded from Pacific trade talks" from The Voice of Russia.
"Ag Coalition Wants to Dump Japan from TPP Talks," from Farm Futures.
"Japan ready to lower pork tariffs for TPP," from The Japan Times.
Was it a good idea to issue this statement? Candidly, we have no firm opinion on that one, and it doesn't matter. On the downside, the wide-of-the mark, misleading headline from The Voice of Russia does serve as a reminder that statements like the one we highlight today take on a life of their own and can have unintended and unwanted consequences. Here are some other considerations.
Agriculture's Support for Japan's Inclusion. No sector in the United States pushed harder to bring Japan into the TPP negotiations, and it is doubtful that there is any sector of the U.S. economy that will be more critical to winning Congressional approval of a TPP agreement. In short, there has to be something in it for U.S. agriculture or TPP as a whole is not credible.
The Groups Who Didn't Sign. The five groups who authored the above statement are all important and their frustration is understandable - more on that below. On the other hand, there are lots of important U.S. agricultural groups who are not signatories. Our guess is that for many of those the problem was this: Difficult as it may be to negotiate with Japan, Japan is the real reason they are interested in TPP negotiations at all, and so threatening to drop Japan was a step too far.
The Changing Landscape. Compounding that reality is another. As one observer put it to us yesterday, "Nothing happens in a vacuum anymore." Everyone, including all the TPP partners, are doing other things. The recently announced trade agreement between Australia and Japan only underscores that.
The Time Lag of a Partial Deal. And yet, though things don't happen in a vacuum, they are sequenced. Thus, for example, it is more than likely that the agricultural issues between Japan and the United States will be settled - and the details of that settlement leaked - long before there is a final Trans-Pacific Partnership Agreement, much less Congressional consideration of it. If those agriculture provisions are not good ones, that period of vulnerability could be death row for TPP.
Pork Producers' Concerns. With those realities in mind, it is worth paying close attention to what groups like the National Pork Producers Council are saying. In a statement issued yesterday,
Dr. Howard Hill, a pork producer from Cambridge, Iowa, and president of the National Pork Producers Council explained that:
"Allowing Japan to exempt products from going to zero tariffs and preserving the gate price on pork sets a horrible precedent. Other TPP countries may demand similar treatment, which could jeopardize the entire agreement, and that precedent would make it much harder to obtain a good outcome for pork and other agricultural products in future trade deals."
The same NPPC press release compared Japan's reservations on tariff elimination to what has been done in other agreements:
"Japan is demanding special treatment for its agricultural sector, including exempting pork and other "sensitive" products from tariff elimination. The United States never has agreed to let a trading partner exempt as many tariff lines as Japan is requesting - 586. In fact, in the 17 free trade agreements the United States has concluded since 2000, only 233 tariff lines combined have been exempted from having tariff elimination."
Trade Promotion Authority. Finally, we have to wonder, would it make a difference in all of this if the U.S. negotiators had a clear mandate in the form of on-the-books Trade Promotion Authority? We think it would. Oh, the negotiations would still be very tough, but things would be just a little clearer, just a little easier.