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THE TTALK QUOTES
On Global Trade & Investment
Published Three Times a Week By
The Global Business Dialogue, Inc.
Washington, DC Tel: 202-463-5074
Email: Comments@gbdinc.org
No. 66 of 2014
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TUESDAY, SEPTEMBER 30, 2014
Filed from Portland, Oregon
Click here for Friday's quote from NAM's Jessica Lemos on Trade in Environmental Goods.
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TPP: THE JAPAN QUESTION
"The United States should not accept an offer from Japan that is anything less than what it has demanded of, and received from, its other FTA partners, including many developing countries."
The National Pork Producers Council
September 25, 2014
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CONTEXT
| The National Pork Producers Council, a leading U.S. farm sector voice on trade, reacted strongly last week to the news that the recent high-level talks between the U.S. and Japan had failed to produce a breakthrough. Japan's Akira Amari, the minister responsible for the TPP negotiations, met with U.S. Trade Representative Michael Froman on Tuesday and Wednesday. As Mr. Amari summed up the situation, "We presented a flexible proposal and received a positive response to some extent, but discussions afterward didn't go well."
USTR's more formal statement on the talks amounts to much the same thing. It said:
"Ambassador Froman, Minister Amari and their teams met on Tuesday and Wednesday [September 23 and 24] to discuss the outstanding issues in our bilateral TPP negotiations, focusing on agriculture and autos. While there were constructive working level discussions over the weekend, we were unable to make further progress on the key outstanding issues."
The outstanding issues that the pork producers and many others in the U.S. agricultural community are focused on are Japan's so-called "sacred" products: pork, dairy, beef, wheat, barley, sugar, and rice. On these products, Japanese negotiators have said they do not intend to move toward zero tariffs. For America's Pork Producers, that is unacceptable. "Pork," they say, "has never been excluded from tariff elimination in a U.S. free trade agreement." And further:
"The exemptions from tariff elimination demanded by Japan would be more than all of the tariff line exemptions contained in the previous 17 FTAs combined the United States has implemented this century."
The Pork Producers recognize that Japan is the key to the large gains their member could reap from TPP. If those gains are to be realized, however, Japan must do two things. "It must be willing to phase out its tariffs over a reasonable period of time and abolish its trade distorting Gate Price system." The Gate Price system sets a minimum import price for pork products.
Dropping Japan from TPP. We have focused first on the changes in Japanese agricultural policy that America's pork producers would like to see from TPP. Their statement got a lot of press around the world, but it was something in their conclusion that most writers chose to highlight, namely this:
"If Japan continues to refuse [to eliminate tariffs on virtually all products], the United and the other TPP countries should close the negotiations with Japan."
Then, after a TPP negotiation among the eleven has been concluded, and after that agreement has been approved by Congress and implemented, at that point, "Japan, when it is ready, can be invited to begin negotiations again with a second group of nations from the Americas and Asia."
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COMMENT
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There are two topics here. One has to do with the negotiating objectives of the various parties in TPP talks. The other has to do with just which countries are to be parties to the negotiations and signatories to the first TPP deal. With respect to negotiating objectives, the pork producers are urging more trade and more openness, and we hope they win that argument. As for who should be in the mix? Should Japan drop out? That's a tougher question. We know we will be returning to it sooner rather than later; so we'll make this short. The National Pork Producers Council has issued an important statement, and we urge you to read their full statement for yourself. We will not attempt any further paraphrasing of it. One doesn't have to make too many calls, however, before the party on the other end says, in effect, "Dropping Japan: that's not a prescription; it's a negotiating tactic. Pork doesn't want Japan to drop out. No one in the ag. community does. For U.S. agriculture, Japan's participation is what makes TPP interesting." Okay, but when something is said enough, and when enough people are saying it, you have to take it seriously. Last week's statement wasn't the first one with the idea of dropping Japan. Last May, the National Pork Producers Council issued a statement that began this way: "The National Pork Producers Council today joined the International Dairy Foods Association, the National Association of Wheat Growers, the USA Rice Federation, and the U.S. Wheat Association in calling on the Obama administration to conclude the Trans-Pacific Partnership (TPP) negotiations without Japan unless that nation agrees to provide significant market access for the United States."
And those U.S. agricultural groups are not the only ones making that suggestion. Prime Minister John Key of New Zealand raised the same possibility when he spoke to the U.S. Chamber of Commerce last June. Mr. Key was clear that he would prefer a TPP deal that includes Japan. However, he said, if the other eleven countries can come to an agreement on a comprehensive TPP but Japan cannot, "then we should get on and do a deal with those eleven partners." At some point, the suggestion of dropping Japan ceases to be just a tactic and becomes instead a full blown issue with a life of its own.
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SOURCES & LINKS
| National Pork Producers Council Statement on the Transpacific Partnership Negotiations is a link to this document, which was the source for today's quote.
Glum Outlook is a link to an Asiaone story with Minister Amari's summation of the recent talks.
Note on Sacred Products. Above we site a list of seven sacred products mentioned in the September 25 statement from the National Pork Producers Council. We note here that other publications more often refer to a list of five, namely, rice, wheat, beef, poultry, and sugar. Our assumption here is that no one is wrong. It is simply that, in their listings, the Japanese generally include barley and wheat together and beef and pork together. If you are aware of some other explanation for the discrepancy, please let us know.
Groups Suggest Dropping Japan is a link to the May 28 statement by the National Pork Producers Council mentioned in the Comment Section above.
Prime Minister Key at the Chamber is a link to a Reuters article reporting on Mr. Key's Chamber speech on June 19, 2014.
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© 2014 The Global Business Dialogue, Inc.
1140 Connecticut Ave., NW, Suite 950
Washington, DC 20036
Tel: (202) 463-5074
R. K. Morris, Editor
www.gbdinc.org
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