If the world can be seen as a game of Risk, the global meat industry—with the help of the Trump administration—just got Japan. While the President touted last week’s deal as aiding struggling U.S. farmers hurt by trade fights, the real winners are global players like the Chinese-owned Smithfield, Brazil-based JBS and Cargill, who have lobbied together for years to further pry open Japan’s market for their beef and pork.
The latest win for these big meat goliaths comes on the heels of the recently completed EU-Japan trade deal, and the completion of what was previously called the Trans Pacific Partnership (the 11-nation CPTPP) – an agreement that the Trump administration pulled out of. Both deals lowered Japanese tariffs on agriculture imports, aiding these companies’ operations around the world. The latest deal with Japan will lock in many of the same wins for these global corporations’ U.S.-based operations.
Earlier this year, U.S. and Japanese food and farm groups (including IATP) raised concerns that an agreement would only benefit global agribusiness. In a letter, the groups criticized a deal “that serves only to open our respective markets and strengthen corporate control over our rural economies. Market openings under previous trade agreements have contributed to the failure of independent family farms and increases in corporate concentration in agriculture, as well as environmental degradation and weakened standards for food safety.”
Similar objections were raised during the fight over the original TPP. In 2016, more than 160 farm, food, rural and faith groups ripped the TPP for serving the interests of global trading firms over farmers. Part of the pushback against these deals is the continued growth in rural communities of controversial factory farms (operations with thousands, if not tens of thousands, of animals producing large amounts of manure) primarily to feed exporting agribusiness companies. These operations are facing rising opposition from rural residents, including independent family farmers themselves. Rural communities suffer from air and water pollution associated with factory farm manure lagoons, while independent producers are driven out of the market.
Instead, the limited U.S.-Japan deal covers agricultural products and a narrow set of industrial goods (like machine tools, bicycles and musical instruments). There is also a separate executive agreement on digital trade that appears to be lifted from the new NAFTA. Also referenced in public announcements by both countries is a verbal commitment from the Trump administration not to apply additional tariffs on Japanese auto parts entering the U.S. – at least in the immediate term.
Japan is the United States’ third biggest agriculture export market according to the U.S. Trade Representative, and the country’s biggest market for exported pork, beef and wheat. The deal lowers Japanese tariffs on those and a number of other U.S. agricultural exports to levels previously agreed to by Japan under the CPTPP.
Unlike the TPP, Japan’s rice market was not included in the deal. And five House members have written to the USTR criticizing the dairy parts of the agreement, arguing that it provides less market access than enjoyed by dairy companies exporting to Japan from the CPTPP countries and the EU. The deal also opens up the U.S. market for more Japanese beef (a relatively small part of the U.S. market), while reducing 42 tariff lines for food and agriculture imports from Japan.
The Trump administration believes that because the agreement only involves tariff reductions in a small number of sectors, it does not require Congressional approval. The final text of the deal has still not been published. The secrecy of the negotiations with Japan, including the exclusion of Congress throughout, represents another step backward in efforts to make trade negotiations more transparent, inclusive and accountable. The USTR’s behind-closed-doors approach works well for plugged in multinationals like Cargill, Tyson and others well represented on its trade advisory committees.
The agreement is contingent on approval of the Japanese parliament, expected this fall, and would go into effect on January 1. According to the USTR, phase two of the negotiations will begin in the spring of 2020, and include other elements of the CPTPP, such as dispute resolution, investor protections and rules on food safety, intellectual property and government procurement. That phase will likely take much longer to reach agreement and if agreed to, would require Congressional involvement and approval. It is unclear how much appetite Japan actually has for a phase two negotiation – with their primary goal, the prevention of new auto-related tariffs, already achieved in this initial agreement.