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Beef, wheat emerge as key trade battlegrounds as new Asia-Pacific deal takes shape

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Beef and wheat, and Japan, emerged on the trade war frontline as major agricultural exporters Australia and Canada lauded the prospect of a revised Asia-Pacific trade pact – while US growers were urged to “turn up the heat” on the Trump administration.


Canada’s government said that outline agreement on so-called TPP-11, a revised version of the Trans-Pacific Partnership trade deal, was “great news for Canadian farmers” in offering the country’s agriculture industry “preferential access” to the nations signing up to the bloc.


The deal, expected to be signed in Chile in March, “will provide new market access opportunities for a wide range of Canadian products, including meat, grains,” as well as the likes of pulses, seafood and maple syrup.


TPP-11 will “help Canada reach our government’s ambitious goal of increasing agri-food exports to Can$75bn annually by 2025,” the government added.


Other countries signing up to TPP-11, known in full as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, include Australia, Canada and New Zealand – major agricultural exporters – and leading importers Japan and Mexico.


However, TPP-11 signally excludes the US, which in March pulled out of the original Asia-Trade pact deal.


‘At the expense of US producers’


In Australia, Trade Minister Steve Ciobo said TPP-11 would see some of the country’s agricultural exporters succeed at the expense of US rivals, noting in particular improved access to Japan, a major beef and grains importer.


“Australian beef producers will have increased access with a more rapid decrease in tariffs on beef into Japan,” Mr Ciobo said.


The shift would “greatly provide a competitive advantage” in Japan to Australia’s beef industry, “at the expense of US beef producers, who will continue to have higher tariffs than we face”.


The US has historically been the second-ranked beef exporter to Japan, behind only Australia.


‘Beef industry will benefit’


According to Australia’s Weekly Times, Agriculture Minister David Littleproud said that “reductions in Japan’s tariffs on our beef and new quotas for wheat, sugar and rice to Japan, as well as sugar into Japan, Canada and Mexico, are also great news.


He added that “this all leads to better farmgate prices, which is what we all want”.


Trade expert Andrew Hudson, a board member at the Export Council of Australia, said that Australia’s “beef industry will benefit from accelerated reductions in Japan’s tariffs”.


Mr Hudson, at law firm Rigby Cooke, highlighted too “new quotas for wheat, rice and sugar to Japan, Canada and Mexico”.


‘Short-sighted and unnecessary’


However, in the US the announcement prompted a caution from the wheat industry that the TPP-11 had put the country’s exports of the grain “at serious risk”.


US Wheat Associates said that the announcement of a TPP-11 concord “sends another discouraging signal to our long-time wheat importing customers in Japan”, which buys an average of 3.1m tonnes of US wheat a year.


Factoring in that the deal will see Japanese import tariffs on Australian and Canadian wheat fall by some $65 a tonne, and US wheat producers face a “total price disadvantage of more than $200m per year” from TPP-11.


The withdrawal by US President Donald Trump from the original TPP deal “was short-sighted and unnecessary, and now US wheat farmers could take the hit,” said Ben Conner, director of policy at USW, which promotes US wheat exports.


‘Heat needs to be turned up’


The National Association of Wheat Growers added that the announcement of TPP-11 “should serve as a rallying cry for farmers, ranchers and dairy producers calling for the new trade deals we were promised when the President walked away from TPP.


“The heat needs to be turned up on the [Trump] administration and on trade negotiations with Japan.


“An already-stressed agriculture sector needs the benefit of free and fair trade now.”

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