The Trump Administration announced Wednesday [September 26] that it is in the process of opening negotiations with Japan for a potential comprehensive trade agreement. The joint statement from both countries came after a meeting between US President, Donald Trump, and Japanese Prime Minister, Shinzo Abe, in New York.
In the statement, both countries recognized the “importance of a strong, stable and mutually beneficial trade and economic relationship between the United State and Japan,” and the interest in expanding “trade and investment” between Japan and the US in a “mutually beneficial manner.”
It added that Japan and the US will start negotiations, after the completion of necessary procedures, for a “United States-Japan Trade Agreement” to address goods and other important areas.
Market importance and industry response
Japan has been a major trading partner for the US feed industry and groups including the American Feed Industry Association (AFIA), America Soybean Association (ASA), National Corn Growers Association (NCGA) and US Grains Council said that they welcomed the news.
Japan has been an important market for US soybean, said Ron Moore, director with the American Soybean Association (ASA). “We’ve been working with Japanese [as they] purchase their soybean from the US for at least 50 years,” he added.
“It’s been a great relationship,” he told FeedNavigator. “They’re one of the larger importers – China took over as the lead purchaser but Japan is a very important market for US soybeans.”
Additionally, the association has been asking for the administration to start work on bi-lateral or other trade agreements, he said.
“President Trump says he wanted to do bilateral [agreements] and we’re happy that he’s reached out to the Japanese movement to start those talks,” Moore said. “It’s long overdue and we’re very happy that it’s been started.”
Those thoughts were echoed by members of the National Corn Growers Association as Japan is a major export market for corn, said Kevin Skunes, NCGA president.
“Since withdrawing from the Trans-Pacific Partnership, NCGA has urged the administration to re-engage Japan in negotiating a trade agreement,” he said. “The announcement that talks will begin is welcome news to American corn farmers.”
Japan is a strong purchaser of several feed grains, including sorghum, barley and distillers dried grains with solubles (DDGS) reported the US Grains Council. It was the second largest export market for US corn in the 2016/17 marketing year and likely will be the same for the 2017/18 marketing year.
The American Feed Industry Association (AFIA) added that the announcement was encouraging. Japan provides the third largest export market for US feed.
Ending the existing barriers and evening the “playing field” between the two countries in a trade agreement is expected to allow US feed and ingredient manufacturers to have increased access to the market.
Last year, the US exported about $880m in feed, feed ingredients and pet food to Japan, reported the AFIA.
The association is hoping to see the administration move quickly in its negotiations, said Gina Tumbarello, director of international policy and trade with AFIA, in a statement.
“One of the Trump administration’s first acts was the complete withdrawal from the Trans-Pacific Partnership, leaving a large void for how the US animal food industry could compete in the Asia-Pacific region,” she said. “This week’s news that the United States is pursuing an agreement with one of TPP’s former signatories, Japan, is a positive ray of hope in a time when many within the agricultural community, including US animal food and ingredient manufacturers, have seen their opportunities to do business dwindling in the Asia-Pacific region.”