Japan approves US-Japan Trade Agreement

By Erin Voegele | December 04, 2019

U.S. Trade Representative Robert Lighthizer issued a statement Dec. 4 confirming Japan’s Diet, its bicameral legislature, has approved the recently signed U.S.-Japan Trade Agreement and the U.S.-Japan Digital Trade Agreement. The U.S. Grains Council has spoken out to applaud Japan’s approval of the agreement, noting that it includes a staged tariff reduction for ethanol.

“I commend Japan’s quick action to approve these important trade agreements between our two nations, which are the world’s first and third largest economies,” Lighthizer said. “We expect the President to sign the implementing proclamation for the United States next week.  The positive results the United States and Japan will gain from these agreements would not be possible without the strong leadership of President Trump and Prime Minister Abe.  Now, U.S. farmers and ranchers will have significantly improved access to Japan’s market, and America’s leadership in the growing digital economy will continue to flourish to the benefit of all our workers."

According to the Office of the U.S. Trade Representative, the U.S. is preparing for the two agreements to go into effect on Jan. 1, 2020. As agreed by President Trump and Prime Minister Abe, both governments will begin consultations early next year in order to enter into further negotiations on a broader trade agreement.

“The agreement solidifies trade with our second largest corn market, immediately reduces U.S. corn and sorghum imports for all purposes to a zero-tariff level, reduces the U.S. barley mark up and includes a staged tariff reduction for U.S. ethanol and U.S. corn, barley and sorghum flour,” said Ryan LeGrand, president and CEO of the USGC. “In addition, U.S. feed and food corn, corn gluten feed, and DDGS will continue to receive duty-free market access.

“Japan purchased more than $2 billion of U.S. corn in the most recent marketing year, is an important market for food and feed barley as well as sorghum and promises to be an important future market for U.S. ethanol,” he continued.

“In negotiating and approving this agreement, our countries have built on a long-standing relationship of mutual trust and embodied that sentiment for the foreseeable future,” LeGrand said.  “We look forward to continued work with our Japanese partners on a more comprehensive trade package that will address important non-tariff barriers and what we hope is continued improvement in the ethanol sector.”

The trade agreement with Japan was reached on Sept. 25. To date, Japan has not been a significant market for U.S. ethanol. That, however, could soon change. The Japanese government announced a new biofuels policy in April 2018 to allow imports of ETBE made from U.S. corn ethanol. The first shipment of ETBE made with U.S. ethanol arrived in the country in July 2019.