The US food and agriculture industry says New Zealand is among those "stealing" markets from American exporters as pressure ramps up on the Trump administration to secure a trade deal with Japan.
The US National Milk Producers Federation (NMPF) and nearly 90 other industry signatories have written to the US Trade Representative, saying US interests are increasingly disadvantaged by competing regional and bilateral agreements with Japan, including the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) of which New Zealand is a member.
"Japan recently decreased tariffs on agricultural imports from the European Union and CPTPP member countries, which the group (signatories) warned, is stealing markets once enjoyed by American exporters," said the federation in an industry note.
"Expanded agricultural market access to Japan is vital for America's struggling rural economy, and that access needs to be on par with what's already enjoyed by US competitors," it said of the message delivered to the administration.
"The administration finally took the necessary step of announcing talks late last year, formally starting negotiations last month. NMPF is focused on touting the urgent need for a deal with Japan that helps US dairy exporters maintain and grow their competitiveness in this dairy-hungry market," it said.
The latest lobbying effort follows the US Dairy Export Council sounding the alarm early this year about New Zealand's first trade agreement with Japan via the CPTPP.
New Zealand and Australia, which is also a member of the CPTPP, are Japan's two largest dairy suppliers. Japan is New Zealand's 5th largest dairy export market with an annual value of about $450 million.
The CPTPP eliminated tariffs on all New Zealand exports to CPTPP economies with the exception of beef to Japan and some dairy products into Japan, Canada and Mexico, where access is improved through partial tariff reductions and duty-free quotas.
US President Trump withdrew from Trans-Pacific Partnership trade talks, the precursor to CPTPP, in 2017.
NMPF said the US exported US$270m (NZ$411m) of dairy goods to Japan last year, making it the fifth largest buyer of US dairy products.
It said the letter to Washington highlighted a US Dairy Export Council study earlier this year which showed America could double its share of the Japanese market over the next 10 years if given "appropriate" market access.
"Without positive action from trade officials, the (council) study forecast that dairy exports to Japan will fall 20 per cent over the next 5 years as Europe, Australia and New Zealand increase their dominance in the market, given the benefits their own trade treaties with Japan provide them.
"A US trade agreement with Japan is needed quickly and it must include market access provisions at least equal to the terms of the CPTPP and the EU-Japan EPA (economic partnership agreement), building on those precedents where possible," NMPF said the letter spelled out.
The CPTPP, signed by 11 Asia-Pacific countries, which collectively were the destination of 30 per cent of New Zealand exports worth $16.7 billion last year, has been ratified by six of the countries. It came into force in December.
The Government says the agreement has the potential to deliver about NZ$222m of tariff savings a year once fully in force.
The Japan-EU trade agreement took effect earlier this year.
As the Herald reported in February, the economic impact study commissioned by the US Dairy Export Council on the potential fallout for the US from the CPTPP, concluded competitors including New Zealand could seize US$1.3b in sales from the American industry in the next 10 years.
This could climb to US$5.4b once the two trade agreements were fully implemented over 21 years, the study claimed.
The report also claimed New Zealand and Australia had "limited capacity to increase their supply" to Japan, the second biggest importer of cheese in the world after the UK.
As a result Japan had looked to the US and the EU for extra supply, the study said.
It found if the US had the same market access as its competitors, American dairy exporters share of the Japanese market could grow from 13 per cent in 2017 to 24 per cent in 2027.
Source: NZ Herald
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