Ag groups urge US officials to continue pushing Japan toward nixing tariffs

Agriculture groups argued Wednesday that Japan should remain part of negotiations on a massive Asia-Pacific trade agreement as talks continue on tariff elimination.

Beef and dairy industry leaders said that negotiators on the 12-nation Trans-Pacific Partnership (TPP) must continue working with Tokyo to not only eliminate tariffs but to craft a broader model for global trade.

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They have argued in recent weeks that Japan should get booted from the talks if it can't deliver on a full slate of tariff elimination and the greater market access Tokyo promised when they joined talks.

Rep. Devin Nunes, chairman of the House Ways and Means Subcommittee on Trade, said in his opening remarks at Wednesday's hearing that Japan and Canada should be left on the sidelines of the TPP until they are willing to agree to zeroing out tariffs.

“In negotiations for the TPP, I am concerned that the Administration is not holding Japan and Canada to the level of ambition that Congress has demanded,” he said.

Nunes conceded that tariff reduction may be gradual and that even “a long timeframe may be warranted, but there has to be a path to zero.”

“If any countries insist on retaining tariffs, then we must complete the negotiations without them and allow them to rejoin when they can commit to full tariff elimination,” he said.

Japan is mostly aiming to protect five "sacred" sectors — beef and pork, dairy, rice, sugar and wheat.

Agriculture industry groups have been clear that they will continue urging the Obama administration to press Japan on wrenching open their markets.

Bob McCan, head of the National Cattlemen's Beef Association, told lawmakers on Wednesday that Japan needs to follow the same rules as all the other TPP nations and that the beef industry is certainly doing its part to "put pressure on Japan for the tariff elimination."

"I don’t think we’re at that point yet in our negotiations," he said. 

"I think Japan really wants to be part of this trade deal more than they’re letting on. We just need to work through it. It may take more time but it’s important that this a 21st century type trade pact."

Andrei Mikhalevsky, president and CEO of California Dairies, said TPP and the U.S.-European Union trade deal "will probably be the blueprint for maybe 70 percent of the trade of dairy around the world so it’s important we get these first ones right."

“I’d be optimistic about getting Japan in," he said. "Our perspective is dairy has to be one of those items in because when you look at the other countries involved and how important dairy is to them.”

Dermot Hayes, professor in agribusiness at Iowa State University, said failure to obtain a TPP agreement could cause economic stagnation and put the U.S. well behind other countries that are pushing forward in their talks with Japan. 

The idea of leaving Japan and possibly other nations out of the trade deal has been broached before by Ways and Means Chairman Dave Camp (R-Mich.) and other panel members. 

But U.S. Trade Representative Michael Froman said these talks provide Washington and Tokyo the only way to finally break through long-standing market access barriers.

At the same time, though, Froman has argued that the ultimate goal is tariff elimination and talks continue in that vein between the U.S. and Japan, which have a separate bilateral negotiation to the TPP. 

In recent weeks, U.S. farmers have expressed their concerns that Japan is clinging to tariffs on some markets while the United States and other nations press for full access.

Dairy interests sent a letter last week to Froman and Agriculture Secretary Tom Vilsack that “it is clear, however, that Japan, as well as Canada, continues to strongly resist living up to the ambitious trade goals it obligated itself to undertake upon joining TPP negotiations."

Without a positive resolution on the outstanding issues, including tariffs, "our industry will find it difficult to support the final agreement."

In addition to the U.S., Japan and Canada, the countries involved in the TPP talks are Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

This story was updated at 10:30 a.m.