U.S.

Rice Producers Signal Flexibility On Japan Market Access In TPP

http://insidetrade.com/201304162431035/WTO-Daily-News/Daily...

Daily News

U.S. Rice Producers Signal Flexibility On Japan Market Access In TPP

Posted: April 16, 2013

A U.S. rice industry representative yesterday (April 15) held open the possibility that U.S. rice producers could accept a Trans-Pacific Partnership (TPP) deal that does not include full liberalization of Japan's rice market as long as it represents a significant improvement in the quality and quantity of their current access. At a press conference on Japan's potential TPP entry, USA Rice Federation Chief Operating Officer Robert Cummings said U.S. rice producers have long understood that rice is uniquely sensitive in Japan and would be one of the most difficult topics in the TPP negotiations if Japan were to join. We're hopeful that, at the end of the negotiation, we're going to end up with a significant improvement in the quality and quantity of our rice access to Japan, he said. Japan currently restricts rice imports through a tariff-rate quota (TRQ) set at roughly 767,000 metric tons. While imports within the quota are duty free, shipments outside the quota are subject to a duty rate of 341 yen per kilogram, or roughly $3,400 per metric ton, according to an industry source. This high duty rate means it is not viable for U.S. producers to ship outside the quota. In a follow-up interview, Cummings signaled that the U.S. and Japan may be able to find a middle ground between full liberalization of Japan's rice market and excluding it from the negotiations altogether. I think one way to look at this negotiation is not to look at it in the extremes, which is product exclusions or 100 percent complete liberalization, he said. He downplayed a study by Japan's agriculture ministry that predicted big losses for Japan's rice sector if the country joined TPP, noting that it assumed full liberalization of the rice market. Instead of focusing on the two extremes, the negotiations should seek to take into account Japan's political and economic sensitivities on rice as well as the U.S. industry's objective of improved market access, Cummings argued. He noted that there has already been a lot of discussion in Japan about domestic agriculture reform and how to make Japanese producers more efficient, and said this issue could be discussed in the negotiations. Cummings spoke at a press conference organized by U.S. agriculture groups to show their support for Japan's entry into the TPP talks. While he appeared to leave the door open for an outcome short of full market liberalization on rice, other agriculture representatives were more forceful in demanding that Japan eliminate tariffs across the board. We know that agriculture is sensitive not only in Japan, but in many [TPP] countries, National Pork Producers Council Vice President Nick Giordano told reporters. But our expectation when all is said and done is that [tariffs on] most products -- all products -- will be going to zero. Giordano argued that tariff phaseouts and other approaches can be used to provide for a smoother landing for sensitive products. The head of the American Farm Bureau Federation this week also appeared to hold out the possibility that U.S. agriculture producers could ultimately accept an outcome in TPP that falls short of fully liberalizing the Japanese market as long as it includes substantially improved market access for agriculture across the board. What you would ideally like to do is, in some fashion, improve market access at some level for all commodities, Farm Bureau President Bob Stallman said in an April 15 interview. If we show that we're making market access gains and there's more opportunity for us to improve our export flow to these [TPP] markets, that's going to tend to make us much more supportive. "We start from the premise that no product is excluded and that we seek tariff elimination," he stressed. But once the talks are concluded, the Farm Bureau will decide whether or not to support the final TPP agreement based on the projected economic benefit to U.S. agriculture in the aggregate, Stallman explained. "There are no individual 'bright line' tests that we apply for a specific commodity," he added. Stallman, a Texas rice farmer, acknowledged that the exclusion from tariff cuts for rice that was obtained by South Korea in its bilateral trade agreement with the U.S. may make it more difficult for the U.S. to convince Japan to liberalize trade in that sector under TPP. But he said it was critical that the Japanese have at least agreed not to take anything off the negotiating table at the outset of talks (Inside U.S. Trade, March 1).

1/2

2013/04/18 17:37

U.S. Rice Producers Signal Flexibility On Japan Market Access In TPP

http://insidetrade.com/201304162431035/WTO-Daily-News/Daily...

He added that it was important that the U.S. recognize political sensitivities trading partners face when considering new market access commitments, noting that protests over U.S. beef imports in South Korea almost toppled its government in 2008. [B]ut that doesn't mean that, in the negotiations, we don't try to assure that we maintain our gold standard of trying to have everything on the table and in some manner improving market access in all areas, he said. According to Stallman, some in Japan have argued that the issue of new market access for rice in particular is irrelevant, based on the argument that Japanese consumers simply prefer domestically grown product. But he refuted that notion and said that, if allowed to compete, U.S. producers would prove it to be untrue. While most U.S. rice producers grow long-grain rice -- a variety that is largely not consumed in Japan -- producers in California have grown a kind of short-grain rice for the Japanese market known as Koshihikari, and production could expand if new market access was opened up, he argued. At the press conference, Giordano drove home the point that the potential inclusion of Japan in the TPP talks makes the agreement much more significant for U.S. agriculture producers. The bottom line is that TPP with Japan represents the single most important trade negotiation ever for the U.S. pork industry, and for most of our colleagues in American agriculture and for most sectors of the U.S. economy, he said. Devry Boughner Vorwerk, director for Latin American and International Business Relations at Cargill, stressed that the U.S. agriculture industry is willing to do what it takes to help the Obama administration reach its goal of finalizing the TPP in 2013. Cargill is willing to roll up its sleeves and work in support of the administration on all sides, along with U.S. companies and the U.S. agriculture industry, to get this done, she said. But other agriculture representatives acknowledged that it may be difficult to conclude the TPP this year, especially with the addition of Japan. We're all about a good final agreement, and if it takes longer than 2013, so be it, Giordano said, when asked whether Japan's entry would slow down the talks. But I believe this administration and the other countries are working hard to try and finish this year. If it's not possible, we look for the best possible outcome shortly thereafter. Similarly, the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council this week said in a joint press release that they were willing to work with U.S. and Japanese officials to ensure that the inclusion of Japan into the TPP will accelerate the negotiations towards conclusion in early 2014. At the press conference, NMPF Vice President Jaime Castaneda took a different stance from Giordano in that he stressed that the U.S. and other TPP countries should seek to conclude the negotiations as soon as possible even if that means sacrificing some of the ambition that countries are seeking. It doesn't do us any good to seek perfection when a very good agreement is achievable, he said, noting that the U.S. cannot afford to fall behind economies such as the European Union that are negotiating free trade deals at a faster rate. U.S. dairy producers are worried about granting New Zealand further access to the U.S. dairy market in the TPP. Castaneda stressed that, in order for the U.S. dairy industry to support a final TPP agreement, U.S. negotiators will have to bring home a package that includes four elements. The first is sanitary and phytosanitary (SPS) provisions that go beyond World Trade Organization rules and are fully enforceable, Castaneda said. At the last round of TPP talks in Singapore, the U.S. proposed a consultative mechanism for resolving SPS disputes that appears to fall short of industry demands for full enforceability. While he declined to discuss the U.S. proposal, Castaneda argued that countries already have the ability to consult over SPS disputes. He said an enforcement mechanism is needed to ensure that countries comply with the commitments they have undertaken in the TPP context. According to Castaneda, the other elements U.S. dairy producers need to see in a final TPP deal are protections for common food names such as Parmesan cheese that the EU wants to claim as geographical indications; additional market access for U.S. dairy products in Japan, Canada, Malaysia and Vietnam; and changes to New Zealand's dairy sector, which is dominated by the Fonterra dairy cooperative. U.S. dairy groups have called for a TPP deal to impose competition disciplines on Fonterra, which they argue enjoys unfair advantages in New Zealand, an allegation that Fonterra rejects.

1996-2013. Inside Washington Publishers Web Design by Blue Water Media

2/2

2013/04/18 17:37