As the ink dries on the final signatures needed for the new U.S.-Japan Trade Agreement, the U.S. Grains Council (USGC) is celebrating improved access to the Japanese market and more than 50 years of partnership with one of the largest and most loyal customers of U.S. coarse grains and co-products.
“In negotiating and approving this agreement, our countries have built on a long-standing relationship of mutual trust and embodied that sentiment for the foreseeable future,” said Ryan LeGrand, USGC president and chief executive officer, in a statement applauding the agreement. “We look forward to continued work with our Japanese partners on a more comprehensive trade package that will address important non-tariff barriers and what we hope is continued improvement in market access in the ethanol sector.”
The Japanese Diet ratified the trade agreement on Dec. 4, 2019 – the final step needed before the agreement can go into effect on Jan. 1, 2020. The U.S. and Japanese governments mutually agreed on the date for entry into force and the United States does not need Congressional approval for this phase of the agreement.
The agreement solidifies trade with Japan by maintaining a zero duty on imports of corn for feed and eliminating a three percent tariff for corn other than feed. Japan will also eliminate U.S. sorghum tariffs, which are as high as three percent, and reduce a mark-up on barley for feed. The agreement also includes a staged reduction for U.S. ethanol and U.S. corn, barley and sorghum flour. The agreement also preserves duty-free market access for U.S. feed and food corn, corn gluten feed and dried distiller’s grains with solubles (DDGS).
Importantly, these provisions allow U.S. farmers and agribusinesses to compete on a level playing field with competitors from countries in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Japan Economic Partnership Agreement (EU-Japan EPA). The Council is continuing to work with U.S. and Japanese partners as additional discussions take place regarding non-tariff trade barriers and additional market access measures related to ethanol.
The Council has worked in Japan for more than 50 years, helping to grow the Japanese feed, livestock and starch industries. Japan ranked as the second largest market for U.S. grains in all forms in 2018/2019 at 16.7 million metric tons (657 million bushels), valued at $6.3 billion. By commodity, Japan represented the second largest buyer of U.S. corn, third largest buyer of U.S. barley and barley products, fourth largest buyer of U.S. sorghum and eighth largest buyer of U.S. DDGS.
The U.S.-Japan Trade Agreement reflects deep ties built over these decades of mutual work. As this agreement moves forward, lowering these market access barriers with one of the most valuable U.S. grain buyers is a critical win-win.
About The U.S. Grains Council
The U.S. Grains Council develops export markets for U.S. barley, corn, sorghum and related products including distiller’s dried grains with solubles (DDGS) and ethanol. With full-time presence in 28 locations, the Council operates programs in more than 50 countries and the European Union. The Council believes exports are vital to global economic development and to U.S. agriculture’s profitability. Detailed information about the Council and its programs is online at www.grains.org.