Wednesday, 4 June 2014

Agri groups urge TPP deal without Japan

Recent complaints from powerful international agricultural lobby groups reveal a growing and serious irritation underlining the Trans Pacific Partnership (TPP).

During the May talks in Singapore, the Japanese negotiators flatly refused to open their agriculture sector. Japan is demanding special treatment for its farming sector, including protecting certain products from tariff elimination.

Some powerful agricultural groups are now so frustrated they have called for Japan to be booted from the talks outright. Bowing to Japanese demands would set a bad precedent, they say.
The United States’ National Association of Wheat Growers (NAWG) released a statement at the end of last week expressing exasperation with Japan’s reluctance to liberalise key agricultural sectors.

NAWG and US Wheat Associates joined with several other agricultural organisations to lash out at Japanese intransigence, saying it could indicate “the end of hopes” for the TPP.

The complaints are important – especially coming from the US wheat lobby – because of the leverage these farmers have over Washington. Should they remove their support from the TPP, the American side of the negotiations may struggle.

On the other hand, suspending Japan (should they continue to rope-off particular sectors), or even the outright removal of Japan from the negotiations as retaliation, could seriously threaten the integrity of the talks as well.

The strongly worded press release says Japan is not adhering to its own pledge “to pursue an agreement that is comprehensive and ambitious in all areas, eliminating tariffs and other barriers to trade and investment,” which Japan made when they joined the TPP talks in July 2013.

In their frustration, NAWG recommends suspending talks with Japan while continuing the negotiations with other TPP partners that are “willing to meet the originally contemplated level of ambition”.

Failing to liberalise the Japanese agricultural sector, will encourage other partner countries to “withhold their sensitive sectors as well”, the American farming group NAWG says.

“The result would fall far short of a truly comprehensive agreement that would set a new standard for future trade agreements. In fact the TPP envisioned by Japan, if it stands, would be the least comprehensive agreement the US has negotiated since the 21st century began,” they say.

At the interim Singapore TPP talks, the Japanese trade representative Akira Amari told other delegations that Japan would not remove tariffs in the seven agricultural sectors it considers “sacred”.

The seven sectors are reportedly: dairy, sugar, rice, beef, pork, wheat and barley. Also included are other downstream products such as flour and flour mixes.

A concurrent statement was released from the Five Nations Beef Alliance (FNBA) – which includes advocacy groups from Australia, Canada, Mexico, New Zealand and the United States. They demand that any TPP agreement be a “high quality deal eliminating all tariffs on beef”.

Their concern is similar to NAWG’s worry as they see a lack of commitment to trade liberalisation, especially after the Singapore talks and Mr Amari’s comments.

Beef + Lamb New Zealand – a member of the FNBA – chief executive Dr Scott Champion told the National Business Review their statement was meant as reassuring advice for the negotiations.

“We want to make sure we’re speaking with one voice on this. It’s really important we get the same deal. Our message is ‘hang in there guys’ – keep pressing for a result.”
Mr Champion says it was always going to difficult to complete the final details of the TPP and predict future timelines, but he is “pretty optimistic” the majority of the deal will be sorted by the end of this year.

The FNBA is calling for each TPP member to provide identical market access to all other members to avoid competitive disadvantages and distortions in trade.

On the Japanese side, the advocacy group Japan Agricultural Cooperatives Group (JA Group) has openly opposed the TPP. They worry that opening the sector could harm their interests.

However, suggesting the current impasse around the Japanese agricultural trade sectors could be a temporary obstacle, the talks appear still to have top-level support in Japan. 

Japanese Prime Minister Shinzo Abe visited Singapore May 31 where he discussed the TPP with counterpart Lee Hsien Loong.

Mr Abe says the two countries will work closely to help conclude the TPP negotiations as early as possible. He says he is keen for reforms to open Japan’s economy and stimulate growth.

“If we miss this year, the US will have its midterm elections and no one will know what the US Congress will look like after [that].” Singapore’s Prime Minister Mr Lee says, stressing the urgency of passing the TPP promptly.

Japan currently relies on global wheat imports of about 5 million metric tons per year to meet total demand and has purchased significantly more US wheat than any country in the world. US wheat exports stand at about 3.1 million metric tons per year on a five-year average, representing over 60% of its total annual wheat imports.

American and Japanese negotiators will hold two more days of talks at the end of this week in Washington to see if they can advance the matter bilaterally.

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