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Dairy Industry to Congress: Phase 1 Japan Deal Makes Key Gains, But Phase 2 Needed

December 9, 2019

NMPF and 33 other agricultural organizations sent a letter last month to the House Ways and Means Committee expressing strong support for a “Phase 1” trade agreement with Japan while emphasizing the need to continue Phase 2 of the negotiations.

This year has been critical for expanding trade opportunities for U.S. dairy exports. In September, the U.S. and Japan struck a so-called Phase 1 trade deal that improves market access for U.S. dairy products in this growing market. Japan approved Phase 1 U.S.-Japan deal Dec. 4, clearing the path for the agreement to be implemented on Jan. 1. That would then be followed by “Phase 2” – a more comprehensive deal that could include more gains for dairy.

The letter, signed by NMPF and groups including the U.S. Dairy Export Council, International Dairy Foods Association, and the Corn Refiners Association, reiterates that a Phase 1 agreement “is critical to our economic prosperity and strengthens the U.S. food and agriculture sector by increasing the competitiveness of American farmers, ranchers, and food exporters in the Japanese market.” But it also notes that Phase 2 negotiations are necessary to “build on the market access gains” already achieved and address additional tariff and non-tariff barriers affecting the exports of U.S. dairy, beef, pork, poultry, fruit and vegetable, grains and other agricultural and food products.

The initial agreement makes significant headway in helping to close the gap between U.S. suppliers to Japan and some of our key competitors. To deliver the full range of access sought by the U.S. dairy industry and ensure U.S. dairy exports can most effectively compete in Japan, however, more work is needed

Timing on a Phase 2 agreement remains uncertain. The House Ways and Means Committee on Nov. 20 held a hearing on the Phase 1 deal and the prospects for a comprehensive deal. NMPF will continue its proactive engagement on this issue in order to achieve a Phase 2 agreement that builds upon the trade deals already secured by key dairy competitors.