exports
September 25, 2019

Dairy Leaders Praise Initial Stage of U.S.-Japan Free Trade Agreement

 |  By: Anna-Lisa Laca

President Donald Trump and his Japanese counterpart Shinzo Abe met in New York on Wednesday to discuss the ongoing negotiations of the U.S.-Japan Free Trade Agreement. While the deal still faces challenges, the two presidents signed the “first stage” of an initial agreement on Wednesday. Dairy leaders are pleased with the deal but hope for more access and assurances in the final agreement.

 

“This interim trade agreement with Japan is welcome news for farmers across the U.S. who have seen their incomes damaged by trade disputes,” said Jim Mulhern, president and CEO of National Milk Producers Federation in a statement. “Today’s news is not the end of the road though, it’s the first leg of the journey. We thank America’s trade negotiators for their pursuit of a deal aimed at benefiting our dairy farmers and expanding international markets for their high-quality milk.”

For the past several months Tom Vilsack, president and CEO of U.S. Dairy Export Council, has talked about this free trade agreement as a significant opportunity for continued growth in dairy exports. 

“Japan represents a rapidly growing market and without a trade deal our competitors are poised to seize valuable market share from U.S. dairy,” Vilsack said in a statement on Wednesday. “This first stage of a US-Japan agreement will improve upon today’s status quo, which has been unsatisfactory ever since Japan’s treaties with the CPTPP nations and the EU went into effect.”

While this agreement is a step in the right direction, Michael Dykes, CEO of the International Dairy Foods Association, says it does not achieve the same tariff rate reductions as those negotiated under the Trans-Pacific Partnership that President Trump pulled the U.S. out of when he took office. Still, he says it should deliver adequate benefits to cheese and whey, two of the country’s largest exports to Japan.

While Mulhern and Vilsack praised the progress negotiators have made with Japan, they agree there is much more work to be done to best position the U.S. to compete in Japanese markets. 

“To reap those full rewards and ensure the U.S. is able to best compete in the Japanese market, the subsequent stage of negotiations must secure further inroads into Japan, building upon what our key competitors – the European Union and New Zealand – have secured there,” Mulhern said. 

Vilsack added the U.S. needs access to more markets in a final agreement.

“To continue progress toward closing the competitiveness gap with both CPTPP and EU suppliers, it’s essential that the U.S. secure further market openings and assurances in the second stage of negotiations with Japan to best position the U.S. to compete against all of our major competitors in Japan,” he said. 

All three leaders say a complete deal is critical to secure U.S. dairy’s role in an ever-growing Asian market. 

“Without a level playing field for U.S. dairy in ever-growing Asian markets, we will continue to cede valuable market share to global competitors,” Dykes said. 

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