By Floyd Gaibler, U.S. Grains Council Director of Trade Policy and Biotechnology

Following the recent meeting between President Barack Obama and Prime Minister Shinzo Abe, Japan could make a decision to formally join the Trans-Pacific Partnership (TPP) negotiations as early as next week. The joint U.S. – Japan statement issued on Feb. 22 emphasized that Japan would not have to make a prior commitment to unilaterally eliminate all tariffs upon joining the TPP negotiations.

Japan’s entry could transform the agreement. Japan is the world’s third largest economy, after the United States and China. It is the fourth largest U.S. agricultural export market overall, despite maintaining substantial import barriers in the food and agricultural sector. Japan is also the world’s largest single-country importer of feed grains and the number one purchaser/importer of U.S. corn. Japan currently is also the top importer of U.S. barley, the second leading importer of U.S. sorghum, and the fourth leading importer of U.S. DDGS

TPP, however, could create pressure for Japan to make serious policy changes to its agricultural system, potentially making it more dependent on direct supports to farmers and less dependent on import protection. Full participation in TPP would force Japan to lower or remove tariffs on imported meat and poultry products, thus exposing Japanese producers to significant new competitive pressures. Abolition of government support schemes and price adjustment mechanisms between domestic and imported products would also become necessary under full TPP participation.

Reforms of the Japan livestock and feed industry are likely to have a significant impact on feed grain and meat imports from the United States as well. The U.S. Grains Council is engaged in detailed analysis of these impacts and stands ready to assist both U.S. exporters and our long-time partners in Japan in adjusting to these changes if and when TPP is adopted.