US, Japan Narrow Market Access Discord to Beef and Pork, Dairy, Say Observers
The U.S. is increasingly flexing its muscle in Trans-Pacific Partnership negotiations, despite the White House’s lackluster lobbying for Trade Promotion Authority and the broader trade agenda, said panelists at a Woodrow Wilson International Center for Scholars. While TPP partners are edging closer to wrapping up TPP talks, contentious market access and rules provisions are still fueling disagreement, and hopes for an immediate conclusion to the negotiations are far-fetched, said the panelists.
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U.S.-Japanese bilateral negotiations, primarily those on agricultural market access, are the “tip of the iceberg” of outstanding TPP issues, said Gary Horlick, a lawyer and former head of the Commerce Department's Import Administration, echoing common insight into the talks. Japanese concessions could pave the way for it to access U.S. natural gas, which would be a critical boon for Japan in the future, said Horlick.
Agricultural negotiations have focused on five Japanese agricultural product sectors, including rice, beef and pork, wheat, dairy and sugar, but negotiators now are mostly targeting beef, pork and dairy, said Horlick. “It’s not like the U.S. is going to be pressing Japan to open its market on sugar much. We have our own sacred products,” said Horlick, referring to U.S. sugar subsidies that Brazil challenged successfully at the WTO. “Rice is done. Literally the day Japanese membership in TPP negotiations was announced, the U.S. rice federation announced ‘well you know, we know we’re going to get screwed. It’s okay.'” Wheat is also off the table in the negotiations because the U.S. benefits from current protections in place, said Horlick.
The Obama administration called repeatedly for comprehensive tariff elimination in the negotiations, but that is out of the realm of possibility, said the panelists. The U.S. allowed South Korea to exempt rice from liberalization in the bilateral U.S.-Korea free trade agreement. The panelists did not discuss how the U.S. and Japan will resolve its disagreements over dairy and beef and pork, and Horlick dismissed reports of a bitter summit between U.S. Trade Representative Michael Froman and Japanese Minister of State for Economic and Fiscal Policy Akira Amari in late September. “This has not been a contentious negotiation, nothing close to U.S.-Canada for example,” said Horlick.
A U.S.-Japanese compromise on market access negotiations will, to a degree, dictate the terms of other TPP bilateral market access talks, said the panelists. TPP partners will not be able to sell an agreement to their constituencies if they don’t get comparable concessions from the two biggest economies in the talks, the panelists said. “My perception is that the Canadians are waiting to see what happens with Japan, and then they’re going to jump in and negotiate from there,” said Robert Rogowsky, a Monterey Institute for International Studies analyst and former chief economist at the U.S. International Trade Commission. Canada is fighting to keep its tariffs on dairy and poultry. The U.S. and Japan are also pitted against the other TPP partners in demanding 12 years patent exclusivity for biologics, said Horlick.