This week, President Trump is traveling to Japan to embark on a new trade mission. The time is right for Japanese trade talks, as we enter the final stages in approving the US-Mexico-Canada Agreement (USMCA).
Throughout this month, we have seen significant progress on advancing the USMCA to replace NAFTA and achieve free and fair trade between our countries. Mexico passed sweeping labor laws called for in the USMCA. Tariffs on aluminum and steel were dropped, in addition to retaliatory tariffs on American agriculture by Mexico and Canada. All of these moves signal the final steps toward ratifying the USMCA. As a member of the whip team helping to secure final approval in Congress, I believe passing the USMCA is among the most important things we can do this year to boost the Kansas and U.S. economy. Canada and Mexico are Kansas’ top two trading partners and congressional approval of the USMCA will be monumental.
With that process near completion, it’s time we turn to Kansas’ third-largest trading partner and the third-largest economy in the world: Japan.
In 2017, Kansas exported $1.2 billion in goods and $206 million in services to Japan. Japan-based companies also employed nearly 10,000 workers in Kansas. As a major importer of wheat, beef and pork, as well as a major producer of automobiles and auto parts, Japan is a critical trade partner for Kansas and our country.
Like the USMCA, a Japanese trade deal can boost opportunities for manufacturing across all sectors of the U.S. economy.
Also like the USMCA, a trade deal with Japan must open up more market access for Kansas farmers, ranchers and manufacturers. Specifically, a trade deal with Japan can continue Kansas’ growing export of wheat, and significantly increase exports of Kansas ethanol and beef.
Japan is already the largest buyer for U.S. wheat, purchasing 10% of all American wheat exports each year including Kansas hard red winter, soft white and hard red spring.
Last year, Japan increased its mandated emission savings and decided to open up imports of corn-based ethanol from the U.S. to meet its goal. Demand from the new market is expected to reach nearly 100 million gallons every year.
These are great developments for Kansas farmers.
And in a welcome step for Kansas ranchers, this week Japan lifted its restriction on U.S. beef that had required beef to come from cattle less than 30 months old. The move is expected to result in an additional $200 million in U.S. beef exports each year, underscoring the potential to export even more if we lower Japan’s 38.5% tariff on beef through a trade agreement.
I applaud President Trump’s strength for the positive developments we have already seen in Japan, which highlight the opportunity that exists from a comprehensive trade deal between our countries. I urge our friends in Japan to seize this opportunity and reach a deal in which we reduce tariffs and other trade barriers. Farmers and manufacturers I talk to in south-central Kansas are standing with the president in his efforts to get countries like Japan to the negotiating table. Through these efforts, Kansans believe better trade deals are possible.
President Trump has already updated our trade agreement with Korea, also an important market for U.S. beef, and I am optimistic that the U.S. is on the cusp of a win-win trade deal with Japan. Now is the time to build on the momentum of the USMCA and reach a free, fair and enforceable trade deal with Japan that farmers, ranchers and manufacturers in the heartland deserve.