World won’t wait for U.S. to lead on trade
July 21, 2017
Nebraska beef is once again being sold in China after the Trump administration negotiated an end to a 14-year ban. This is a great development for Nebraska agriculture, as well as for Chinese consumers who finally get to enjoy this high-quality, delicious product.
In contrast to this good news, Japan and the European Union announced a trade agreement early this month which would lower Japan's tariffs on European meat and dairy products. Understandably, this is causing deep concern among U.S. beef, pork and dairy producers.
With the world's third-largest gross domestic product, Japan is the largest export market for U.S. beef and the second-largest export market for U.S. pork. However, significant barriers to trade still exist, and Japan remains a market with plenty of untapped potential for U.S. exporters.
Other nations are currently making market gains in Japan at the expense of the U.S. For example, Australia, whose own bilateral trade agreement with Japan took effect in January 2015, saw the tariff on its beef drop from the nearly 40 percent rate the U.S. pays to approximately 30 percent in April 2017. This rate will continue to decrease until it reaches 19.5 percent for frozen Australian beef and 23.5 percent for fresh Australian beef.
These tariff rate discrepancies between U.S. and Australian beef undermine U.S. competitiveness and resulted in a 14.6 percent increase in Australian beef exports to Japan in 2015.
Now, with a new agreement negotiated between Japan and the European Union, U.S. producers fear losing further market share in this crucial economy.
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This is why my resolution urging the Trump administration to negotiate a trade agreement with Japan is so important. The resolution, which I introduced in the House in March, calls on the Trump administration to use the process established under the Trade Priorities and Accountability Act, or TPA, to begin working on a trade deal with Japan. I supported passing TPA in 2015 because it empowered Congress to direct trade negotiations while giving other countries the confidence to bring their best offers to the table.
Under the Trans-Pacific Partnership negotiated between the U.S. and 11 other Pacific Rim countries, the tariff on U.S. beef exports to Japan was set to fall to 9 percent over 15 years. With President Trump pulling the U.S. out of TPP in favor of bilateral agreements, we need to move quickly on initiating trade talks with Japan.
As we work to expand our partnerships in the Asia-Pacific region, we must also continue to strengthen our relationships with our neighbors Canada and Mexico. The Trump administration has expressed its commitment to modernizing the North American Free Trade Agreement.
There is no reason we cannot take another look at the 25-year-old agreement, but we need to ensure the gains achieved for U.S. agriculture are not undermined. We must move through this process quickly and assure Mexican consumers quality U.S. products will continue to be as available and affordable for them as they have been to this point.
Our agriculture producers fuel our economy and feed the world, and it is our job to make sure markets are open to them. As a member of the Ways and Means Committee, which has jurisdiction over trade policy, I will keep emphasizing the importance of asserting U.S. leadership in the global marketplace. ❖