When you stand still on trade, you fall behind. Nowhere is this more apparent for the United States than in Japan, the world's third largest economy and long a top market for U.S. exports. It's also why the U.S. just launched negotiations for a trade agreement with Japan.
Like many other countries in the Indo-Pacific region, Japan has been striking new trade deals and tearing down barriers to global commerce. It's imperative that we act quickly so that our workers, farmers, and companies are not stuck on the outside, looking in.
The Trans-Pacific Partnership (TPP) is a case in point. The U.S. led the way in negotiating this 12-country trade pact, but when Washington withdrew in 2017, Japan and the other participating countries chose to implement it without us. The TPP finally entered into force last December.
Thanks to the agreement's tariff cuts, Japan imported 60% more beef from Canada, Australia, and other TPP countries in January than it did the previous year. And since a new EU-Japan trade pact entered into force in February, European farmers and manufacturers are also benefiting from tariff cuts in Japan.
However, the rising tide of trade between Japan and its new trade agreement partners has meant lost sales for Americans. U.S. pork exports to Japan, the top export destination, have dropped by 35% so far this year. U.S. wheat and barley sales to Japan are also suffering. The trend extends to manufactured goods as well.
In response, the U.S. is poised to launch negotiations with Japan for a bilateral trade pact. This is good news, and the Chamber strongly supports this move.
U.S.-Japan trade topped $300 billion last year, and Japanese firms, which have invested nearly $500 billion dollars in the U.S., employ nearly 1 million Americans.