Trump, Abe say US and Japan have new trade pact
BIARRITZ, France – President Donald Trump said Sunday the U.S. and Japan have agreed in principle on a new trade deal that calls for the Japanese to buy U.S. surplus corn.
“We’ve been working on a deal with Japan for a long time, and we’ve agreed in principle,” Trump said during the G-7 summit in southwest France.
Details of the agreement, announced a few hours after a meeting between Trump and Japanese Prime Minister Shinzo Abe, were not immediately available. But U.S. Trade Representative Robert Lighthizer said the deal will open up markets to $7 billion in other products.
U.S. Secretary of Agriculture Sonny Perdue said by removing existing barriers for American products, producers will be able to sell more to the Japanese markets.
"At the same time we will able to close gaps to better allow us to compete on a level playing field with our competitors," Perdue said.
The news of a trade deal with Japan was welcomed by farm groups across the country.
"This is much-needed good news on the agricultural trade front," said American Farm Bureau Federation President Zippy Duvall.
Top U.S. agricultural exports to Japan currently include beef, corn, pork, soybeans and wheat. Soybeans and soy products are America’s leading agricultural export with an export value of more than $28 billion last year.
Japan is currently a top 10 export market for soybeans, said Davie Stephens, president of the American Soybean Association (ASA).
“We have repeatedly stressed this past year during the trade war with China that we would like the administration to work hard on existing and new free trade agreements, so we are definitely pleased to hear that the President and his team have heard ASA and other farm groups by working on this deal," Stephens said. "Along with more stability for soybean exports to Japan, this trade deal also brings potential to increase pork and beef exports; a value-add opportunity for soybeans and way to create more jobs here in the U.S.”
David Herring, a pork producer from Lillington, N.C. and president of the National Pork Producers Council said the group looks forward to the rapid implementation of the agreement.
"The United States produces the safest, highest-quality and most affordable pork in the world," said Herring. "It is the preference of many Japanese customers and we look forward to competing on a level playing field again."
Dr. Dermot Hayes, an economist at Iowa State University, estimates exports to Japan will grow from $1.6 billion in 2018 to more than $2.2 billion over the next 15 years as a result of the United States pork industry getting market access in Japan as favorable as its competitors.
Corn growers were also encouraged by the agreement, especially since Japan is the second largest buyer of U.S. corn.
“Japan has been an important, longstanding trading partner with America’s corn farmers. We hope the next stage of negotiations are successful in enhancing rules of trade and building on this strong relationship,” said National Corn Growers Association President Lynn Chrisp.
The U.S. Grains Council said lowering market access barriers with Japan is a critical win-win.
"Japan is also a partner with which we hope to build a growing ethanol market," the U.S. Grains Council said in a statement.
Alan Bjerga, a spokesman for the National Milk Producers Federation told AgriPulse that 'A trade deal with Japan … would be a powerful signal that the U.S. can get deals done and wants to get them done quickly.'
“A strong agreement will help the U.S. remain competitive in the long term,” told the news organization.
Trump said the deal would likely be signed at the United Nations General Assembly meeting in September.
Abe said that while some working remains to be done on the final language of the deal, “we have successfully reached consensus with regard to the core elements related to agricultural and industrial trade.”
USA TODAY contributed to this report.