Members of North Dakota’s Congressional delegation are hailing a $7 billion trade agreement with Japan that they said would result in the sale of more agricultural commodities from the United States to what is the state’s fifth largest trading partner.
North Dakota Farmer’s Union, meanwhile, said there aren’t yet enough details to comment on the deal, while North Dakota Farm Bureau said it is much-needed good news.
“NDFB is pleased to hear U.S. and Japan may be close to a trade deal that includes agriculture,” said North Dakota Farm Bureau President Daryl Lies. “This is much-needed good news on the agricultural trade front and gives farmers and ranchers a lift in their spirits, as harvest season begins in North Dakota. Top U.S. agricultural exports to Japan currently include beef, corn, pork, soybeans and wheat. We appreciate the Administration’s work to secure greater access for farmer and ranchers. We hope this agreement will encourage other countries to come to the negotiation table as well.”
The agreement in principle was announced on Sunday at the G-7 Summit by President Donald Trump with Prime Minister Shinzo Abe.
“It’s a very big transaction, and we’ve agreed in principle,” Trump said in a video clip that was posted to his Twitter feed. “It’s billions and billions of dollars.”
Among points Trump highlighted are what he said would be a very large purchase of corn.
“We have excess corn in various parts of our country with our farmers because China didn’t do what they said they were going to do,” Trump said. “And Prime Minister Abe on behalf of Japan, they are going to be buying all that corn, and that’s a very big transaction. They are going to be buying it from our farmers.”
Abe’s comments weren’t included in Trump’s Twitter feed, but, according to a transcript of their remarks issued by the White House, Abe said some work remains to be done to finalize the agreement’s content, with hopes that it can be signed in September, when the United Nations General Assembly will be in session.
Abe declined to say how much corn Japan would purchase, however, even though prompted to do so by Trump.
Insect pests have created a need for Japan’s private sector to purchase a certain amount of agricultural products, Abe said, adding that this would be done by the Japanese private sector, meaning Japanese corporations.
“We believe that there is a need for us to implement emergency support measures for the Japanese private sector to have the early purchase of the American corn,” he said. “Of course, there is something that is already a shared understanding — by the Japanese public, Japanese private sector, as well. So that’s why, against such backdrop, I do think that there is a possibility for us to cooperate to address this issue.”
U.S. Trade Representative Robert Lighthizer, meanwhile, said that an agreement had been reached on “core principles” for three areas, agricultural, industrial tariffs, and digital trade.
“We’ll get to the details at another time,” he said. “Japan is our third largest agricultural market and they import $14 billion of U.S. agricultural products. This will open up markets to over $7 billion of those products.”
He listed beef, pork, wheat, dairy, wine and ethanol as among beneficiaries, and said it would result in substantial reductions in tariffs and non-tariff barriers. One example, he said, is beef.
“Japan is by far our biggest beef market,” he said. “We sell over $2 billion worth of beef to Japan. And this will allow us to do so with lower tariffs and to compete more effectively with people across the board, particularly the TPP countries and Europe.”
In return, the U.S. would reduce some of its industrial tariffs, Lighthizer said, but auto tariffs are specifically not in that group.
Existing auto tariffs would remain, but not get higher, Trump said.
“On Japan, they stay the same,” he said. “They’re staying the same.”
He went on to say the deal includes buying some wheat.
“This is a massive purchase of wheat also, in addition to everything else,” Trump said. “This is a very large purchase of wheat, and the very, very large order of corn will go quickly.”
Sen. John Hoeven, R-North Dakota, was among those saying he was pleased with the deal.
“We’ve been encouraging the Administration to finalize negotiations with Japan, which is our nation’s third largest agriculture market,” he said. “We appreciate the President and his trade team for securing this new trade agreement in principle, which will open up the Japanese market to an additional $7 billion in U.S. agriculture goods. We look forward to continuing to work with the Administration to advance trade agreements and hope this new agreement will put pressure on China to reach an agreement. We will also continue working to advance the USMCA, which needs to originate in the House.”
Japan, Senator Kevin Cramer said, is the third largest agricultural export market for the United States, and it’s fourth largest export market overall.
“Congratulations to President Trump and Prime Minister Abe for securing this trade deal which helps American farmers, workers, and businesses. Japan agreed to purchase significant amounts of our agricultural commodities, including top North Dakota products like wheat and corn. I look forward to continuing to work with the Administration to advance bilateral deals such as this.”
Cramer spent some time with the Japanese ambassador at the Japanese embassy in Washington before traveling to Japan as part of a trip to the Indo-Pacific region, where he said he encouraged Japanese officials to consider trade agreements with the United States.
“With China as a common challenge, and United States farmers sacrificing disproportionately in the Chinese trade dispute, we hope Japan’s negotiators consider advancing mutually-beneficial trade agreements between our countries,” Senator Cramer said at the time. “This would increase our exports and increase their intake of the safe, high-quality products we produce.”
Gov. Doug Burgum said that Japan is North Dakota’s No. 5 export market, with $36 million dollars after Canada at $6.9 billion and Mexico at $228 million. Other large trading partners for the state are Australia at $144 million and Germany at $60 million.
“With this trade agreement it will become an even more important market for the corn, soybeans, beef, and other quality goods produced by our farmers and ranchers, who are among the world’s best and can compete with anyone on a level playing field,” Burgum said. “We’re grateful to President Trump and his administration for their persistent efforts on this deal, which will open up Japanese market to over $7 billion in U.S. goods. Now it’s time for Congress to pass the U.S.-Mexico-Canada Agreement to strengthen trade with North Dakota’s top two trading partners, promote job creation, and grow the economy.”
Burgum, too, has met with Japanese leaders, attending the Midwest U.S.-Japan Association’s 50th annual conference in Omaha, which he said was the first time North Dakota has participated in the conference that promotes trade and cooperation between the two countries.
“Japan has a population of nearly 127 million people in an area the size of North Dakota and South Dakota combined. We have food and energy to export, and Japan needs to import food and energy. And Japan respects international protection of intellectual property. The United States has a huge opportunity to make a great trading partner an even more strategic ally,” Burgum said.