THE TTALK QUOTES


On Global Trade & Investment
Published By:
The Global Business Dialogue, Inc.
Washington, DC  Tel: 202-559-9316
No.4 of 2020
WEDNESDAY, JANUARY 15, 2020

Click HERE for last Thursday's quote on the fires in Australia.
COURTESY OF A TRADE DEAL

 "We can get big steaks as prices go down."

A Tokyo Shopper
The Japan Times
January 9, 2020 (publication date)
CONTEXT
In a White House ceremony earlier today, President Trump and Vice Premier Liu He of China signed the long-awaited Phase One Trade Agreement between the United States and China. We shall come back to that agreement soon and probably often. Today’s focus, however, is on Japan and the fact that the two-part agreement announced by President Trump and Prime Minister Abe last September entered into force on January 1. As a result of the tariff portion of that agreement, Japan will be buying more U.S. pork, dairy, wheat, almonds, and blueberries – and, yes, more U.S. beef.

In 2018, Japan purchased over $14 billion in U.S. agricultural products. To state the obvious, U.S. producers, especially agriculture producers, were significantly disadvantaged in Japan by America’s withdrawal from the Trans-Pacific Partnership agreement in January of 2017 and by the subsequent entry into force of a modified TPP among the remaining eleven countries. The new U.S.-Japan agreement remedies that. As the USTR fact sheet on the agreement explains:

Over 90 percent of U.S. food and agricultural imports into Japan will either be duty free or receive preferential tariff access once the Agreement is implemented.

In short, U.S. producers will now be able to sell their goods in Japan on the same basis as those offered there by producers in Canada, Australia, New Zealand and other TPP countries, or, as it is now known, CPTPP. (That stands for Comprehensive and Progressive Agreement for Trans-Pacific Partnership.)
COMMENT
No doubt about it, where trade is concerned, we are in a period of more big changes, more than a few upheavals, and new agreements, with more to come. Our own view is that the origins of these developments date back to well before the U.S. withdrawal from TPP. But, again, new arrangements are emerging, new agreements are being made, and we are not just referring to those involving the United States. 

One consequence of Brexit, for example, is that Japan, like many other countries, will need to forge a new trading relationship with the United Kingdom. Our understanding is that a top goal for Japan in those talks is to reduce or eliminate the 8 percent tariff that currently applies to Japanese car exports to EU countries, including, for the moment, the UK. We don’t know how that will turn out, but we expect there will be an agreement within the next year or two. We believe that will happen because we think that the UK Secretary of State for International Trade, Liz Truss, was correct in her assessment of the underlying goals and sentiments. Speaking in Tokyo a few months ago, Ms. Truss said:

Businesses should be reassured that there is a huge political will on both sides to begin negotiating a new free trade agreement with Japan as soon as possible.

There will be difficulties of course, but they will get there.


Beyond Brexit and the Future of UK-US Trade is the topic for the next GBD colloquium. The title link will take you to the announcement for this session, including the list of speakers and registration options. Sign up today. It would be great to see you on the 28th.
SOURCES & LINKS
Customers Wooed with Lower Prices takes you to a January 9 article from the Japan times on grocery prices in Japan in the wake of the entry into force of the new, U.S.-Japan trade agreement. This was the source for today’s featured quote. 

Fact Sheet on Agriculture in the U.S.-Japan trade deal takes you to this 2019 publication issued by the Office of the U.S. Trade Representative. 

Phase One Signed is a link to the White House announcement on the signing of this new agreement with China.

Huge Political Will is a Reuters story from this past September, which focuses on the possibility of a new trade deal between Japan and the UK, and which includes the above quote from Liz Truss.

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