Securing more in Japan trade deal for CA dairy farmers

Representative Josh Harder CA

Josh Harder

Representative Josh Harder (CA-10) along with Representatives Ron Kind (WI-01), Roger Marshall (KS-01), and Lloyd Smucker (PA-11) led a bipartisan letter with dozens of their colleagues calling on the U.S. Trade Representative and Secretary of Agriculture to fight for dairy protections in the next phase of trade deal negotiations with Japan. The first phase won important concessions, but more work needs to be done to protect American dairy export interests in Japan. Two new trade deals between Japan and the European Union as well as Japan and its Asian neighbors have given greater market access to America’s dairy competitors around the world. This has put American dairy farmers at a disadvantage when attempting to sell their products to Japan. The bipartisan coalition of lawmakers wants to ensure the deal accounts for specific needs of the dairy industry.

“Central Valley dairymen and women have been facing depressed milk prices and tough market conditions for years. We made some decent progress in the first phase of the deal, but there’s a lot left to do,” said Rep. Harder. “We buy a lot of commodities from Japan and they should buy ours at fair rates and with fair market access. If we get this deal right we’re talking about potentially doubling our $100 million annual California exports to Japan. We need more jobs and export capacity now more than ever – we have to get a good deal for our dairy industry.”

California exports over $100 million in dairy products to Japan every year – and the export value increased by 22 percent between 2017 and 2018 according to the most recent data available from the California Department of Food and Agriculture. Japan is the #4 export market for California dairy products – but estimates indicate a good trade deal could improve market access and double the amount of dairy exports to the country every year.

The text of the letter is below and an original version is available here.

Dear Ambassador Lighthizer and Secretary Perdue,

The recently completed Phase One trade agreement with Japan made forward progress on several issues of importance to America’s dairy industry. However, many opportunities remain in this key market and we urge your offices to work together to swiftly and regularly engage with Congress as statutorily required during the negotiations of the comprehensive Phase Two agreement.

As you know, the dairy farmers and food manufacturers we represent help feed the world by producing high-quality and nutritious milk and dairy ingredients that are exported to markets across the globe. These sales abroad fuel economic growth here at home, creating more than 85,000 jobs dependent on exports and supporting our rural communities.1 However, our dairy farmers are struggling to stay afloat amid depressed milk prices and a prolonged rural recession. The U.S. Department of Agriculture reports that the U.S. lost more than 6,000 dairy farms over the last two years, representing a 15% decline in dairy farm numbers over that period.12 This is a sobering statistic that underscores the urgent need to move swiftly on trade agreements that can expand overseas market access for the dairy industry, especially in a market as valuable as Japan.

Japan is one of the top five overseas markets for Made-in-America dairy products, and increasing demand from both Japanese food processors and consumers has created an incredible opportunity for the U.S. dairy industry. Over the coming years, domestic Japanese dairy production will be insufficient to meet demand. America’s dairy industry stands willing and ready to meet this need.

While the Phase One agreement with Japan made progress on achieving improved tariff treatment for many American dairy products, our farmers and processors remain at a disadvantage to our competitors due to the preferential access granted to our competitors by the Japan-European Union (EU) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) agreements. A comprehensive Phase Two deal is necessary to address these remaining gaps and inequalities in market access in order to maximize opportunities for American dairy products.

Given the fact that our domestic market is a top destination for Japanese exports, Japan must ensure that the terms of trade offered to the United States are better than those offered to other, less valuable, markets. We wholeheartedly endorse Ambassador Lighthizer’s assessment during his testimony before the House Ways and Means Committee in June 2019: “You cannot treat your best customer worse than you treat people from all these other countries in Europe and all the other TPP countries.” A particularly important opportunity for our dairy industry relates to products for which Japan gave minimal market access in its trade agreements, such as milk powder and butter.

Moreover, our comprehensive Phase Two agreement with Japan must also include effective disciplines for applying sanitary and phytosanitary measures that are science-based as well as enforceable commitments to protect common cheese names. The common food name provisions in USMCA set a strong precedent that affirm market access rights for a non-exhaustive list of commonly used product terms and reject the monopolization of common names as barriers to trade. We encourage the U.S. government to further expand upon this successful framework in the Phase Two agreement with Japan.

 





 

A 2019 U.S. Dairy Export Council study found that the U.S. could roughly double its share of the Japanese market over the next 10 years if we have at least the same market access as our global competitors.3 This is a valuable opportunity that cannot be left to linger on the negotiating table.

On behalf of our constituents, please swiftly pursue a comprehensive Phase Two agreement that capitalizes on the incredible strides you already made in this important market. We look forward to working with your offices to advance this important issue.

 





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