Congressional Research Service Says TRQs, SPS Inferior in Japan Deal, Compared With TPP
A recent Congressional Research Service report on agricultural gains in the Japan mini-deal said that while it does match the Trans-Pacific Partnership in many ways, there are some significant shortfalls, including products under tariff-rate quotas in the broader multilateral deal that aren't in the mini-deal.
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Rice, barley, butter, skim milk powder, cocoa products, evaporated and condensed milk, edible fats and oils, coffee, tea, chocolate, candies, sugar and vegetable preparations all have TRQs in the TPP, and none are in the bilateral U.S.-Japan deal. Also, the TPP and the Japan-European Union free trade agreement cover non-tariff measures, such as sanitary and phytosanitary measures, geographical indications and biotech. But the U.S. doesn't have those provisions, so its agricultural exporters could be at a disadvantage to countries in those FTAs, the report said. The mini-deal also “does not include a formal dispute settlement mechanism to enforce commitments should either side take fault with the other’s implementation,” the report notes.
Congress may want to examine whether the limited agreements set a precedent for other countries to seal partial trade agreements with other countries, which could result in difficulties for U.S. exporters, “as well as potentially undermine respect and adherence to the letter and spirit of the WTO,” the report said.
Agriculture exports to Japan fell by more than $1 billion in 2019, as competitors in Europe, Australia and Canada took market share, due to their FTAs. The Agriculture Department forecasts that 2020 will not be a year of recovery, but that's because of the COVID-19 pandemic disruption more than the differences in FTAs. It expects agriculture exports in 2020 to be $100 million below the 2019 level.