TPP will not nix farm tariffs right away: former US Trade Rep
The Nikkei | Tuesday, December 7, 2010
TPP will not nix farm tariffs right away: former US Trade Rep
WASHINGTON (Nikkei)—Japan’s joining the Trans-Pacific Partnership would not bring an immediate end to tariffs protecting domestic farmers, who would still be able to receive some kinds of government support, former U.S. Trade Representative Clayton Yeutter tells The Nikkei.
Yeutter became America’s top trade negotiator in 1985 under the Reagan administration. During his tenure, he oversaw the conclusion of a free trade agreement with Canada and led the U.S. delegation in the Uruguay Round of multilateral negotiations. He went on to serve as agriculture secretary.
Excerpts from the interview follow.
Q: What is your understanding of the TPP?
A: Well, it should be a high-standard agreement for the 21st century.
The logical place to (pursue free trade) would be the Doha Round of multilateral negotiations, but that’s going nowhere at the moment. So the TPP is where the action is right now. It’s the most important negotiation that’s under way in the world today.
Q: Is the TPP trying to eliminate 100% of tariffs?
A: Maybe it won’t reach 100%, but the objective ought to be 100% or something very, very close to that, because in my view the way to provide flexibility in an agreement like this is through the timing of the tariff reductions. And that ought to provide some comfort to Japan’s agricultural industry.
Japan’s agriculture need not worry about all tariffs being lifted at the time that such an agreement goes into effect. They’ll be phased out over time. And some may be eliminated immediately, others may be eliminated after five years, others after 10 years, others after maybe as much as 15 years. That’s for the negotiators to determine, of course.
Q: Will it be possible to make exceptions for rice and other sensitive farm products?
A: That’s an issue for the negotiators to resolve, not just with respect to Japan. Other countries also have products that they would consider to be sensitive as well, I’m sure.
But that list, if you will, ought to be much smaller in the context of a free trade agreement than in the context of the Doha Round.
Q: How do you see Japan’s situation now, including in terms of agricultural policy?
A: Japan as a nation has had a relatively stagnant economy now for almost 20 years and that needs to change. And if Japan chooses not to participate (in the TPP) because it’s politically difficult to do so, then it seems to me that Japan has made a decision to relegate itself to gradually becoming a second-tier economic power in the world.
On agriculture specifically, there are just a lot of ways to reform agriculture.
Reform is not impossible, it just takes some creativity.
(There are) income supports that are non-production-based and so therefore they do not distort trade nearly so much. And, of course, there are environmental programs for rural areas, soil conservation programs for rural areas.
Q: Some negotiators worry that Japan’s joining the TPP negotiations will hold up the process. Do you think that’s true?
A: Certainly, having Japan in the negotiation will slow things down. But it (will) also (have) the merit of making this a much more meaningful negotiation for everybody, including Japan.
Q: How will last month’s midterm elections affect U.S. trade policy?
A: My view is that the election has improved the prospects for trade agreements and trade expansion. I believe the attitude on Capitol Hill will become more positive moving into next year. Certainly, the Republican leadership in the House of Representatives ... will be much more supportive of free trade agreements.
The Obama administration is committed also to export expansion.
As a consequence of the election, labor unions’ leverage on Capitol Hill has been substantially reduced, and that will be helpful in terms of moving existing free trade agreements through the Congress and any new agreements that might be negotiated, such as the TPP.
— Interviewed by Nikkei staff writer Masakuni Oshirabe
(The Nikkei Dec. 4 morning edition)
