Food & Ag Policy Briefing: US-Japan deal, EFTA signs with Mercosur, agrochemical battles
US President Donald Trump and Japanese Prime Minister Shinzo Abe have signed a deal which promises benefits for US agriculture whilst the EFTA bloc, like the EU, has also forged a deal with South America.
Two trade deals have been concluded in recent days with the US and Japan signing a tentative agreement and the European Free Trade Association (EFTA) following in the EU’s footsteps and concluding a deal with the Mercosur countries.
The US and Japan pact promises to open Japan’s agricultural markets to more US products, allowing US farmers and ranchers to compete on more equal footing with members of the Trans-Pacific Partnership (now dubbed the CPTPP), a multinational trade agreement concluded under the Obama administration but abandoned by Trump.
One of the groups expect significant benefits from the deal is the US hog industry.
"We look forward to rapid implementation of the agreement as international competitors are currently taking US pork market share through more favourable access," David Herring, president of the National Pork Producers Council, said.
“The United States produces the safest, highest-quality and most affordable pork in the world. It is the preference of many Japanese customers and we look forward to competing on a level playing field again."
Whilst many other agricultural groups welcomed the deal, the US rice industry, which calls Japan the third-largest export market, was disappointed.
"While we are certainly disappointed to hear that rice wasn't included in last week's discussions, we remain committed to working with the US government to realize improved rice trade," said Charley Mathews, chair of USA Rice, on Aug. 27. "At this point, we're faced with a 700% tariff on US rice going into Japan which translates to a lack of consumer access."
South America deals
The European Free Trade Association (EFTA) followed the EU’s example and concluded a deal with Mercosur last week.
Iceland, Liechtenstein, Norway and Switzerland concluded the negotiations in Buenos Aires late August following negotiations that began in January 2017.
Meanwhile, concerns over the EU-Mercosur deal continued to rumble on last week.
Spanish farmers’ organisation, La Unión de Uniones, said the EU’s rice imports from the Mercosur markets of Uruguay, Argentina, Paraguay and Brazil have increased by more than 200% in the last four years and, with the new FTA in the making, they pose a threat to Spanish rice producers as 60,000 tonnes of rice a year will be able to enter the EU without tariffs.
In its analysis, La Unión de Uniones looked at the handful of products considered sensitive under the terms of the agreement and determined that although overall imports have fallen slightly over the last five years, they did increase in the case of rice, beef and honey and could continue increasing significantly in subsequent years.
The Mercosur deal was also drawn into the concern over the Amazon fires that have been raging this month. French President Emmanuel Macron and Irish Prime Minister Leo Varadkar had reiterated their warnings that they will not approve the draft accord, struck on June 28, if Brazilian President Jair Bolsonaro fails to honour his country’s climate commitments.
Macron wrote in a tweet that “our house is on fire. Literally. The Amazon – the lung of our planet which produces 20 percent of our oxygen – is burning.”
But on August 26, Brazilian Agriculture Minister Tereza Cristina Dias said the countries were “overreacting” by linking the Amazon fires with the deal. Dias also said she hopes the country’s farming products will not suffer from any trade embargos because of environmental issues.
In France, the French regulatory agency, ANSES, called for the help of independent research teams to gather toxicology data which will form part of the evidence upon which the upcoming decision to permit or ban the weed killer glyphosate in the EU will be made.
The current approval of glyphosate will expire on 15 December 2022 and the renewal process will begin three years prior to this in December 2019.
In the US, the latest legal filing in the case of the former school groundsman Dewayne Johnson states that Monsanto’s conduct related to the safety of glyphosate was “reprehensible” and a jury’s decision to hit the company with $289 million in punitive and compensatory damages should be upheld.
Last year, a state judge reduced the damages to $78 million, concluding the punitive damages exceeded constitutional limits. Monsanto has filed its own appeal seeking to have the case dismissed. The fate of the appeal could provide clarity for Bayer, which now owns Monsanto, and for attorneys representing thousands of plaintiffs who allege exposure to glyphosate caused them to develop cancer.
Another agrochemical which has raised health concerns is chlorpyrifos but the European Commission has indicated that it has no plans to speed up or bypass EU regulatory procedures to bring about an immediate ban.
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