On Wednesday, November 20th, the Ways and Means trade subcommittee held a hearing to discuss the phase one trade agreement between the U.S. and Japan. As of November 19th, Japan’s lower house of parliament passed the agreement in a vote. The agreement is expected to be passed by the entirety of the Japanese parliament soon. The agreement does not need to be voted on by the U.S. Congress and is set to be implemented on January 1, 2020.
There were four witnesses that testified at the hearing: Darci Vetter, Edelman U.S. Public Affairs; Matthew Goodman, Center for Strategic & International Studies; John Nassar, United Automobile Workers; and Russell Boening, Boening Bros. Dairy and Texas Farm Bureau.
Many Democratic members of the subcommittee expressed concern over U.S. Trade Representative (USTR) Robert Lighthizer’s decision not to testify at the hearing, despite his and the administration’s heavy involvement in the negotiations with Japan. Additionally, members of the subcommittee explained that the extent to which USTR and the administration negotiated the trade agreement without consulting Congress is a violation of the procedures set out in the Trade Priorities and Accountability Act (TPA).
Congressman Bill Pascrell (D-NJ-09) said, “Vest Congress, not the president, with the ability to regulate trade. Ultimate authority lies with the Congress. When we [Congress] fail to properly vet a trade agreement, we abrogate, I believe, our own powers, and further enfeeble our own branch. And that’s the price of our inaction.”
Another concern brought forth by subcommittee members is that the first phase of the trade agreement is not “comprehensive” since it excludes key dairy products, such as butter, milk powder, and yogurt. Although exclusions are not ideal, IDFA is hopeful that the implementation of a phase one trade agreement will foster a better trading relationship between the U.S. and Japan, therefore leading to a phase two agreement. Such an agreement will allow U.S. dairy and other agricultural exporters to gain more market access in Japan.
IDFA understands the concerns brought forth by the trade subcommittee today. However, the phase one trade agreement is a crucial step forward in U.S. dairy exporters gaining a level playing field against competitors in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and EU. The current agreement will help to improve our current market position with Japan. Moreover, if we had done nothing, U.S. dairy would continue to be less competitive in a global marketplace where Japan has implemented trade deals with competitors including the EU, New Zealand and Australia. We must continue to ensure American producers and processors remain competitive.
Please direct all questions to Beth Hughes, senior director of international affairs.