Adding Japan trade pact would grow sales
By JOHN O'CONNELL
The National Potato Council estimates annual U.S. potato exports would grow roughly $275 million within five years through Japan's inclusion in the Trans-Pacific Partnership trade agreement.
Japan's prime minister asked to join in March. This month, President Obama offered his support of welcoming Japan to the bargaining table. All 10 other negotiating countries must consent for Japan to be added.
Japan is already the largest foreign market for U.S. spuds, importing $400 million in potato products in fiscal year 2012, up 10 percent from the prior year.
NPC joined leaders with national milk, pork and rice organizations, along with the American Farm Bureau Federation and Cargill, Inc., during a Monday afternoon press conference at the National Press Club in Washington, D.C., in support of adding Japan to the agreement.
NPC spokesman Mark Szymanski said the agreement stands to eliminate Japan's tariff's on U.S. spuds -- 8.5 percent on frozen products and 20 percent on dehydrated products -- and open doors for fresh imports. Currently, Japan allows only a small amount of U.S. fresh imports for coastal potato chip production and prohibits table stock imports.
NPC predicts removing trade restrictions with Japan would increase frozen potato exports by $140 million, with total sales approaching $500 million, by 2017. Also during that timeframe, NPC expects annual dehydrated exports would grow 10 percent per year to about $50 million, fresh chip potato exports would grow 25 percent per year to $25 million, and annual fresh table-stock spud exports would reach $100 million.
Oakley, Idaho, grower Randy Hardy, NPC's vice president of trade affairs, said the U.S. must keep pace with Europe, which is also negotiating a free trade agreement with Japan. He's visited Japan's potato growing region and believes the country has ample unmet demand.
"Japan doesn't have storage or the variety we have, and their growing area is limited," Hardy said.
Increasing exports to Japan would drive production at Washington processing plants strategically located for the export market, said Washington Potato Commission Executive Director Chris Voigt.
"Because of our emphasis on the Pacific Rim, that's why this is going to be a very good situation for Washington," Voigt said.
Idaho Barley Commission Administrator Kelly Olson said Japan is a major market for U.S. feed barley and is the No. 1 importer of U.S. corn. Though Japan has no import quotas on U.S. grain, Olson said the agreement could remove tariffs and address certain Japanese practices adding to the cost of imported grain.
"It's always better to have them at the table in negotiations than outside of the process," Olson said.
According to the U.S. Dairy Export Council, Japan is the fifth largest U.S. dairy export market, purchasing $284 million in U.S. dairy products in 2012, despite "substantial market access barriers in many of the biggest dairy categories."
The 17th round of TPP negotiations will commence in Peru May 15-24. The U.S. auto industry and Ford Motor Co. have voiced opposition to Japan's participation, worried an agreement wouldn't adequately address an automotive trade discrepancy and would "lock in one-way, unfair trade."