Disregard for ‘Off-Limits’ Industries in Japan-US TPP Negotiations Cannot Be Tolerated

At the Japan-U.S. level negotiations for the Trans-Pacific Partnership (TPP) in Tokyo, the chief representative for Japan, Hiroshi Ōe, stated, “Certainly, we have made sound progress,” but expressed the view that reaching an agreement will still take some time. As always, a host of vague, zen-like answers makes it utterly impossible to ascertain the actual state of the negotiations.

However, in this round of talks, it would appear that the U.S. requested that Japan relax tariffs on the importation of powdered skim milk. Powdered skim milk is included among dairy products, which is one of Japan’s five major “off-limits” agricultural product industries. Particularly, such tariff relaxing would deal a serious blow to Hokkaidō, responsible for over 80 percent of the nation’s production.

Obviously Japan rejected this proposal, but in the grand scheme of the talks, the fact that such a demand would even emerge is disturbing in itself. The bicameral Agricultural, Forestry and Fisheries Committee has stated that withdrawal from the talks isn’t off the table if off-limits industries cannot be protected. The government ought to maintain a resolute attitude with this in mind.

Tariffs are imposed upon imported powdered skim milk based on value and quantity. Since it is difficult to differentiate between domestic and imported products, if imports are liberalized, domestic products won’t stand a chance. Along with powdered skim milk, butter — which is produced simultaneously — will also be placed in jeopardy.

Of the raw milk produced in Hokkaidō, 80 percent is used as base material for dairy products. Butter and powdered skim milk constitutes half of that. Without powdered skim milk, Hokkaidō dairy farms would become untenable.

In the Japan-Australia Economic Partnership Agreement (EPA), the tariff on Australian beef is set to marginally decrease over time from the current 38.5 percent to half that rate. It is predicted that this will result in competition with cattle types used for domestic dairy, with a particularly large influence on the major producers in Hokkaidō. There is a concern that not only will livestock farmers be affected, but administrators who sponsor calves to dairy farmers will also face pressure.

Among the continuing Japan-U.S. TPP talks, beef and pork tariffs that should have been off-limits are becoming a point of focus. Since there is no transparency to the confidential negotiations, uncertainty among those connected to agriculture is only getting worse. The recent request to relieve powdered skim milk tariffs only contributes to this. With things as they are, Hokkaidō dairy farmers are unable to construct a plan for the future, and there will be no stopping the diaspora of farmers looking for new careers.

As the Japan-U.S. business level talks continue, the goal is to reach a definite agreement at the TPP cabinet meeting in Australia starting on Oct. 25. However, compromises on off-limits sectors are out of the question. Any concession that leads to a breaking down of these protected industries is absolutely unacceptable.