OMAHA
(DTN) -- U.S. wheat growers are likely to lose some market share in Japan in
the coming years because of a free trade agreement between Japan and the
European Union, and the newly constituted Comprehensive and Progressive
Trans-Pacific Partnership, a new USDA report warns.
The
Foreign Agricultural Service headlined the report, "Competitive Field
Tilts Against U.S. Wheat in Japan."
The
report highlights the impact of two trade deals in Japan that would lower
tariffs on a variety of wheat products, including pasta and flour. While the
U.S. was responsible for 45% of Japan's wheat imports -- about $630 million of
$1.4 billion in total wheat imports -- the U.S. could lose more of the wheat
market as the EU-Japan deal comes into force as early as next year.
Japan
is also championing changes under the newly constituted Comprehensive and
Progressive Trans-Pacific Partnership as countries work to implement the trade
pact without U.S. participation. President Donald Trump withdrew the U.S. from
the Pacific trade deal nearly a year ago.
The
Foreign Agricultural Service report notes Japan concluded talks with the EU
just last month, and several of the tariff reductions offered to Europe
"largely resemble the concessions that Japan made in the Trans-Pacific
Partnership agreement negotiation."
The
Comprehensive and Progressive Trans-Pacific Partnership includes Japan and
Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru,
Singapore and Vietnam. Dow Jones also reported Wednesday that Great Britain is
informally considering joining the Trans-Pacific Partnership as well.
Currently,
roughly 95% of Japan's wheat comes from three U.S. varieties of dark northern
spring, western white and U.S. hard red winter wheat, as well as Canadian
western red spring wheat and Australian standard white wheat.
Under
the EU and Pacific trade pacts, Europe, Canada and Australia would see
increases in tariff-free export volumes to Japan, and the markup of tariffs for
additional volumes of wheat would be cut by 45% as well over time.
While
Japan imports small volumes of processed wheat through flour, wheat starch or
baking mixes, the EU and TPP trade deals also would increase the quotas of
tariff-free volumes for those products as well. The EU and Turkey are currently
the dominant exporters of pasta products to Japan, but the U.S. also maintains
a 14% market share of those products.
The
report comes after leadership from the U.S. Wheat Associates and National
Association of Wheat Growers wrote the Office of the U.S. Trade Representative
in October to "strongly urge" USTR to pivot away from renegotiating
trade deals to opening new markets. The statement came after the U.S. had
announced renegotiations over the South Korea free-trade agreement.
"While
we disagreed, the president made clear that he did not support the
Trans-Pacific Partnership. We were promised a series of bilateral trade
agreements in its place," said NAWG CEO Chandler Goule at the time.
"USTR has limited resources -- it is time to get past plowing the same
fields and start opening ground in new markets. Right now, we are standing
around watching the world pass us by on trade agreements."