In a letter sent yesterday to top Obama administration trade officials, the National Pork Producers Council (NPPC) detailed the reasons US negotiators on the Trans-Pacific Partnership (TPP) should insist that Japan eliminate its so-called 'Gate Price' on US pork.
The TPP is a regional negotiation that includes the United States, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, which account for nearly 40% of global GDP.
NPPC told Agriculture Secretary Tom Vilsack and US Trade Representative Michael Froman that the Gate Price has associated with it a long history of fraud and criminal activity, and it discriminates against Japanese consumers by putting upward pressure on food prices and has prompted Japanese meat processing companies to move their factories to other Asian nations, costing the country much-needed jobs.
The byzantine system also may violate Japan's constitution, which requires that obligations contained in treaties be given legal precedence over domestic laws. Japan considers the World Trade Organization's "Marrakesh Agreement," which established existing WTO rules, as a treaty. Several plaintiffs, including a former Japanese government official, are arguing that the Gate Price violates provisions of the WTO Agreement on Agriculture, which prohibit the use of variable import levies, and, therefore, is in violation of the country's constitution.
Pork producers' support for a final TPP Agreement is conditioned on the elimination of all tariff and non-tariff barriers to US pork exports in each of the TPP nations, including the elimination of the Gate Price in Japan," said NPPC President Howard Hill, a veterinarian and pork producer from Cambridge, Iowa.
In the TPP negotiations, Japan is demanding special treatment for its agricultural sector, including exempting pork and other "sensitive" products from tariff elimination and maintaining the Gate Price on pork.
"While Japan's current TPP offer on pork, if implemented, might allow a modest increase in US pork exports to that country," Hill said, "it would rob the US pork industry of hundreds of millions of dollars in annual pork exports to Japan and would stymie the creation of thousands of US jobs that the industry would realise if the Gate Price and tariffs on pork were eliminated. Further, the disposition of this issue will impact our producers for the next 25 years, setting a precedent for future US free trade agreements."
Japan is the No. 1 export market for US pork, which shipped nearly $2 billion of products to the island nation in 2013.
[To read the letter to Vilsack and Froman, click here.]