Revived TPP threatens U.S. wheat sales

The United States is likely to lose lucrative market share of wheat in Japan, the U.S. Department of Agriculture is warning the American agriculture industry.

The reason: other nations’ embrace of free trade deals.

“The current market preference for (Canadian spring wheat) over (American spring wheat) may be compounded in the coming years by the reduction in the Japanese government markup for 1CW if the (revived Trans Pacific Partnership) is effectuated,” said the report from the USDA’s Foreign Agriculture Service, titled Competitive Field Tilts Against US Wheat in Japan.

The report also suggests Australia’s share of the wheat market will increase if TPP is approved. As well, it highlights the European Union’s greater access to Japan due to its free trade deal with the country.

In 2016, Japan imported US$1.4 billion worth of wheat, with 45 percent coming from the U.S., USDA said in the report. It generally imports about 5.2 million tonnes of wheat for food every year, with 95 percent coming from the U.S., Canada and Australia.

Canada’s 1.7 million tonnes of wheat shipments to Japan represent 34 percent of imports in 2016, and have taken a bigger share of the market due to lower relative prices.

While the new TPP details aren’t known, the report assumes they will be similar to those in the deal that U.S. President Donald Trump pulled out of a year ago. They are almost the same as the details in the Japan-EU agreement.

Japan had agreed in the original TPP to gradually but steadily reduce a form of tariff on wheat for TPP members. That would have included the U.S., but the revived negotiations only contain the other 11 members. The tariffs in the original TPP were to be reduced by 45 percent over several years.

The report offers a USDA analysis of where other countries could gain a competitive edge over U.S. wheat in Japan’s market.

Almost all major U.S. agriculture and commodity groups supported TPP. Many have also lobbied Trump to leave the North American Free Trade Agreement intact and have urged the White House to try to achieve other trade deals to make up for the loss of TPP.

A frustrated National Association of Wheat Growers has already complained about the death of the TPP talks and the Trump government’s continued attacks on existing trade deals, such as the one with South Korea.

When asked to comment for this story, U.S. Wheat Associates pointed to its statement from one year ago, saying nothing had changed.

“Without TPP or alternative agreements, U.S. farmers will be forced to the sidelines of trade while losing market share in the region to our competitors, including Australia, Canada, Russia and the European Union, which have current agreements or are negotiating new ones,” said the Jan. 23, 2017, statement.

About the author


  • Monkeeworks

    Now the scare tactics start. “If you (the U.S.) don’t join the TPP they may lose export.” We don’t have the TPP now, we don’t need it tomorrow. If a country needs grain they will buy the grain from whom-ever has the best price. It is called ‘trade’. I remember Brian telling Canadians the same thing when they brought in NAFTA. Some people are going to cash in big time on the TPP, just like they did with NAFTA.
    My grandfather told me, and this was over 60 years ago, “”Be afraid, really afraid, when the government comes forward and says,”we are from the government and we are here to help.” You can bet pockets will get lined with our tax dollar.””
    Remember Brian, he ended up being called Lyon Brian?(misspell on purpose) He told all Canadians if we did not pass the referendum on the ‘Charlottetown Accord’ Canadian banks would close and call in thousands of loans and mortgages? We bit our tongues and did not pass the accord. When he was questioned about his lie to get the accord passed he just said he wanted to get the accord passed.
    The point is, we do not need everything the government says we need. When the government says we need something, in reality, it is the government who wants it, and usually, someone gets a lot richer for it, and it won’t be the common person.

Markets at a glance

Copyright © 2018. All market data is provided by Barchart Market Data Solutions. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.


Stories from our other publications