ASA Japan Comments Submitted to USTR

ASA coordinated with USSEC submitting joint comments and objectives for a U.S. – Japan Free Trade Agreement to the USTR, highlighting reducing tariffs and increasing market access as key objectives for both in the upcoming Free Trade Agreement with Japan.

Japan is the fifth-largest market for U.S. soybean exports, with shipments valued at $976 million in 2017. Japan’s World Trade Organization (WTO) commitments provide duty-free treatment for soybeans and soybean oilcake imports, while tariffs on other soybean products are as high as 20 percent. However, the demand for soybeans for crushing should remain strong. With a 73 percent market share, the United States is the largest soybean supplier to Japan. Brazil, Japan’s second largest soybean supplier, holds a 16 percent market share.

Background:

On Oct. 25, USTR formally announced plans to negotiate a FTA between the U.S. and Japan. This was welcome news as ASA has been encouraging the Administration to engage with Japan since the pull out of TPP. This became more vital in November as Vietnam became the seventh country to ratify the CPTPP, which will allow the CPTPP to go into force, undercutting U.S. goods which will not have access to the TPP agreements on tariffs and trade.

Tariffs on soybean products such as soybean oil are as high as 21-percent. These tariffs, currently as high as 13.2 yen per kilogram (approximately 20.8 percent ad valorem equivalent), would have been eliminated in six years under TPP. Japan’s imports of U.S. soybean oil were valued at $7 million in 2017.  Japan would have also gradually eliminated its 4.2-percent tariff on soybean flour with oil residue, 5.1 percent tariff on soy protein with protein content over 90%, and 10.6 percent tariff on soy protein with protein content between 80-90 percent under TPP. As for soybean meal, there is no tariff.  Japan’s imports of U.S. soybean meal were valued at $107 million in 2017. As such the ASA and USSEC would expect the same deal or better in the U.S.-Japan FTA.

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