THE TTALK QUOTES 

On Global Trade & Investment
Published By:
The Global Business Dialogue, Inc.
Washington, DC  Tel: 202-463-5074
 
No. 62 of 2019
MONDAY, SEPTEMBER 16, 2019

Click HERE for last Monday's Brexit quote from Boris Johnson.


JAPAN: A FOCUS ON THE LARGER PRIZE

 "[W]e respectfully urge the Administration to hold fast to its commitment to achieve a high-standard trade agreement with Japan and ensure this initial package does not impede momentum toward such a broader accord."

14 Major U.S. Trade Associations
In a Letter to USTR Robert Lighthizer
September 11, 2019
CONTEXT
To review familiar developments, President Trump and Prime Minister Abe of Japan announced last month that they had agreed on the outline for a limited trade agreement. That was on August 25 at the G7 Summit in Biarritz. At the time the two leaders said they expected to sign this new deal during this year’s U.N. General Assembly meetings in New York. Those proceedings begin tomorrow and will carry through to the end of this month. We don’t know when or even if the new agreement will be signed. This is one case, however, where the relative absence of news about the promised agreement strongly suggests that the responsible bureaucracies – USTR for the United States – are working hard to meet the deadline their leaders have set.

Agriculture, digital trade, and industrial tariffs are the issues that are expected to be addressed in the promised agreement – especially agriculture. But the U.S.-Japan trading relationship is enormous, and those topics should be just the beginning for a comprehensive U.S.-Japan trade agreement. It was that larger agreement that was the focus of the letter that 14 U.S. trade associations sent to Ambassador Lighthizer last week. Here is the first full paragraph of that letter:

"The undersigned business organizations welcome the news that the Administration is nearing an “early harvest” in trade negotiations with Japan that will provide U.S. farmers and ranchers with improved access to the Japanese market, reduce certain industrial tariffs, and establish new rules for digital trade. While this is a positive development, we respectfully urge the Administration to hold fast to its commitment to achieve a comprehensive, high-standard trade agreement with Japan and ensure this initial package does not impede momentum toward such a broader accord. American workers and companies in a wide range of sectors cannot afford to miss this opportunity to address the full range of U.S. trade concerns in a state-of-the-art comprehensive trade agreement."

And these were the groups that signed the letter:
Signatories to the September 11 Association Letter to
USTR on U.S.-Japan Trade

American Chemistry Council
American Council of Life Insurers
Biotechnology Innovation Organization
Business Roundtable
Coalition of Service Industries
Motion Picture Association of America
National Association of Manufacturers
National Foreign Trade Council
Personal Car Products Council
Pharmaceutical Research and Manufacturers of America
Securities Industry and Financial Markets Association
United States Council for International Business
U.S.-Japan Business Council
U.S. Chamber of Commerce
From the Chemical Industry.  The American Chemistry Council was one of the signatories of the letter we have been talking about. At an Administration hearing last December, the group set out its priorities for a U.S.-Japan trade deal. Their first priority was “the immediate elimination of tariffs on all chemical trade between the U.S. and Japan, and their second priority was “enhanced regulatory cooperation .” In addition, the group suggested that a U.S.-Japan trade agreement should include “provisions to address the ongoing issue of plastic waste in our oceans .”
COMMENT
This is not the first of these entries (and it won’t be the last) where the subject matter brings to mind a phrase we associate with the U.S. Navy’s Construction Battalion or Seabees:  “The difficult we do immediately, the impossible takes a little longer. ” Except that there is no reason to believe that a larger agreement is impossible. After all, not everything in a trade agreement is horse-trading. In some areas, the challenge is not finding trade-offs – Japanese robots for American beef for example – but forging new arrangements on issues of common concern like dispute settlement, regulatory cooperation, and, one would hope, reducing plastic waste in the ocean. 

As for the plea in the opening paragraph of the association letter, the groups are right to worry, but perhaps they shouldn’t worry too much. If an interim agreement is announced this month, it will not come too soon for the U.S. farmers, pork producers and cattlemen, all of whom are in a tight squeeze. But yes, there is a downside. There will be a sigh of relief and the pressure for a larger deal will abate, at least for a while. That said, U.S.-Japan trade is vibrant and dynamic and the pressure for further improvement is bound to return and sooner rather than later. That’s our guess. 
RELATED EVENT - SEPTEMBER 26
JAPAN-US TRADE: THE NEXT STEP.  This event will be held from 9 to 10:30 that morning at the National Press Club in Washington, with speakers from agriculture and industry. The title link will take you to the announcement for this event, with the list of speakers and registration options. 
SOURCES & LINKS
A Letter to Ambassador Lighthizer is a link to the association letter that was the source for today’s featured quote, as published by the U.S. Chamber of Commerce.

U.S. Chemical Companies and Japan takes you to the oral testimony that Ed Brzytwa of the American Chemistry Council gave at last December’s Administration hearing on objectives for an agreement with Japan. 

U.S. Agriculture and Challenge for Japan is the September 5 TTALK Quote. This focused on the challenges faced by both U.S. wheat producers and Japanese policy makers as a consequence of Japan’s current preference arrangements, which disadvantage U.S. producers.  
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