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Why Japan Did America’s Dirty Work in the TPP: USTR Gave Away the Agricultural Store

By Lambert Strether of Corrente.

While doing the research for this morning’s work-up of TPP, I ran across this thirty-six page PDF, said to the the Japanese government’s summary of TPP (see translated headline here; link appears on page). During the Atlanta negotiations, I noticed that the Japanese were playing a much more forward role than usual, starting with all the leaks in the Japanese press that the deal was done (when in fact it wasn’t), and Trade Minister Amari serving as a constant source of quotes for the hungry press, threatening to leave at midnight because he had a plane to catch, and so forth. Frankly, I had expected Abe to throw Obama under the bus, once they had his permission to remilitarize, to protect Japanese agriculture for their upcoming elections.

So I shot the PDF off to NC contributor Clive, who knows Japanese, saying “The media is trumpeting “Agreement” but I’m not sure what kind of agreement we have.” Here’s how Japanese agriculture did get protected. Take it away, Clive!

* * *

Wow. That is a treasure trove. Unfortunately “treasure” isn’t perhaps the right word if you’re a U.S. citizen. Certainly as far as Japan is concerned, you’ve been sold out good and proper by your government.

That master negotiator USTR Froman has caved big time and handed Japan everything it asked for, certainly in terms of agriculture. To call it a sweetheart deal (Japan being the one who is being wooed, USTR Froman apparently being the Girl Who Just Can’t Say No) would be understating it. About the only concession from the Japan is the reduction to a small degree in agricultural tariffs. But as you’ll see, there’s no hurry to implementing them and plenty of get-out clauses.

Too much detail to quote the provisions detailed in the document in their entirety, but let’s take beef by way of example. Here from Section II “Conclusion of Market Access Negotiations” subsection 1 “Market Access for goods (Access to the Japanese Market)” is item 4, “Beef”:

(1) To avoid the elimination of tariffs while also reducing tariffs (but) with safeguards (the tariffs on beef will be reduced as follows).

38.5% (current) 27.5% (initially (at the enactment of the TPP)) 20% (after 10 years) 9% (16 years later)

(2) Safeguards:

trigger quantity (this is an annual “anti-dumping” limit that, once imports rise above a set level mean an additional import surcharge is made):

590,000 t (initially) 696,000 t (after 10 years) 738,000 t (after 16 years) (Also for the 5 years after year 11 from the enactment of the TPP there will be a 20% cut in the quarterly trigger level*)

safeguard tax rate:. 38.5% (initially) 30% (4 years) 20% (11-year) 18% (15 years)

From Year 16 (since the TPP became enacted) the Safeguard tariff tax will be reduced by 1% every year. But if the Safeguard tax is invoked (i.e. if the anti-dumping trigger is reached) the Safeguard tax will not be reduced the following year. However, if the Safeguard tax (threshold) level is not reached for four (consecutive) years then the Safeguard tax will be abolished.

If imports have been substantially reduced due to an outbreak of livestock disease for more than three years, these tariff changes will not be applied for a period of time of up to five years starting from a substantial lifting of the ban (this provision will not be applied to the U.S. and Canada until after the end of January 2018).

* I must add that I have no idea what this clause means at all! I’m guessing that it is trying to say that between years 11 and 16 (inclusive) following the TPP enactment, the trigger quantity has to be smoothed out over the year as beef sales have seasonal variations, but someone who knows more about how the current beef import anti-dumping measures work would need to tell me what this change would do.

So, Japan gets to keep not only its beef import quotas with the additional “safeguard” special anti-dumping tax but also the regular tariffs which only reduce (and aren’t eliminated) over 16 years. The other agricultural tariff terms are similarly bad for the U.S. and stunningly good for Japan. Japan, in return, gets everything it wanted on auto imports. My best advice to Japan’s ministerial negotiator Amari is to run from the building as quickly as you can before Froman realises he’s been had.

* * *

Well, that’s interesting. I’d comment only that I question “caving”; I don’t accept Democratic narratives of weakness. If we think of TPP as a trade deal, then “caving” to the Japanese, the second largest economy at the table, on every conceivable agricultural issue would seem to make the ratio of benefit to cost uncomfortably even.

However, if what the people Obama (and hence Froman) work for want — better, what the trans- and post-national squillionaire parasitroids who have injected their controlling, neoliberal, TINA-flavored ideological venom into the hive mind of our political class really want — is the destruction of national sovereignty in favor of global rule by the corporations they own, then the ratio of benefit to cost is still enormously high; Japanese beef is trivial from the elite’s commanding heights, although Texas, Nebraska, Kansas, California, Oklahoma, Missouri, and Iowa might not like it very much. But no doubt their local oligarchies will come around, if only the right inducements can be found.

Readers, please thank Clive for yet another great job, done in such a timely fashion.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

25 comments

  1. allan

    ブラボ (Burabo) ! Thank you, Clive and Lambert.

    Why, it’s almost as if `free trade’ is a misnomer.
    Not something one is ever going to find in the MSM.

  2. shinola

    “…squillionaire parasitroids who have injected their controlling, neoliberal, TINA-flavored ideological venom into the hive mind of our political class…”

    Now that’s some snappy writing!

    1. Lambert Strether Post author

      “I would say to Robertson what an old tutor of a college said to one of his pupils:’Read over your compositions, and where ever you meet with a passage which you think is particularly fine, strike it out.'” –Boswell: Life of Johnson

      That said, I had a little fun… And Hudson’s parasite meme really deserves wide adoption.

      1. susan the other

        That’s interesting bec. I had an art prof. who said when there is place on your canvas that is precious to you, don’t be afraid to get rid of it.

  3. Kris

    I wonder if we’re looking at this backwards. I still remember when the Bush administration was desperately trying to convince Japan to remilitarize, sending Colin Powell over numerous times to persuade them. Maybe the TPP concessions in favor of Japan are part of the price Japan exacted in exchange for doing Washington’s bidding.

    1. RBHoughton

      Hi Kris, you’re a man who knows the way of the world,
      and the basic role of war-mongering in its management.
      Good comment.

  4. grayslady

    Thanks for the translation, Clive. Based on your work, it sure seems that US producers shouldn’t even bother trying to export beef for at least 16 years.

  5. Clive

    UPDATE: Since I wrote this I had chance to check with a native speaker about what the mysterious clause which I couldn’t quite get my head around (「関税が 20%を切る 11 年目以降5年間は四半期毎の発動数量も設定」) might have meant. I felt slightly better that she too wasn’t completely sure what it was driving at, the main problem being the context wasn’t explicit and while the subject was clear (“the tariffs”) as was the verb it applied to (“to be cut”) as was the amount (“20%”), the timeframe was a right mish-mash. What we think it means is:

    “From Year 11 (after the enactment of the TPP) thru’ the next five years (i.e. until Year 16) the trigger quantity change will be applied on a quarterly basis”

    In other words, there has to be a smoothed out transition in the last 5 years with the increase in the “Safeguard” import quota from 696k tons → 738k tons (i.e. the extra 42k tons) being spread out equally over each quarter of the 5 year period. Otherwise, the 16 year (!) transition period would be even worse as the last increase would not have to be made until the end of Year 16.

    If you’ll indulge me in a bit of speculation here, this was perhaps an example of a classic Japanese negotiation ploy in action. Originally the U.S. I suspect wanted this quarterly application to start in Year 1. But I’d bet my mother-in-law that the Japanese negotiators picked this — fairly trivial — point and dug in over it. That way, the U.S. negotiating team would spend a huge amount of energy and negotiating time banging on about a point which is neither here-nor-there. Eventually the compromise of the phasing-in getting applied over the last 5 years was reached, this didn’t really matter to the Japanese anyhow. But they got their way on the substantive part — which is of course the levels of the quota and the tariff. The other even more hilarious possibility is that the Japanese negotiating team hoodwinked the U.S. negotiators into thinking this “20% cut” meant something else — something much more impressive sounding — entirely, rather than just a timings question. Oh, I’d have loved to have been a fly on the wall at the negotiations to find out if I’m right on this point.

    Yet another possibility is that, if you’re joining us from Lambert’s previous feature http://www.nakedcapitalism.com/2015/10/tpp-its-not-a-deal-and-its-not-a-trade-deal-and-its-not-a-done-deal.html on the TPP, this entire clause is merely a pre-prepared booby-trap for the Coming Attraction that is the inevitable international squabbling over the exact text of the real TPP treaty.

    1. Uahsenaa

      I’m reading the report now, so I may have more to say, but this strikes me as so much theater. The US already gave away its one real bargaining chip (the military thing). I do not see how this will go over with the Diet, Abe likely knows that, and he managed to buy himself inordinate goodwill by conceding something that will likely never fly. The “appearing to work with someone on something already toast” is also a classic Japanese negotiating strategy.

  6. ira

    Related to TPP, but not to US-Japan ag,

    Did Obama Bomb Doctors Without Borders for Opposing TPP?

    http://theantimedia.org/doctors-without-borders-bombing-tpp/

    This is what I’ve been thinking for days now. As MSF has said, if passed this will be the template for further trade deals wrt to access to affordable medicines, and literally millions of people will be adversely affected — iow suffer and die needlessly.
    In their own words, ‘this is the worst trade deal wrt to access to affordable medicines in history.’

  7. flora

    Very interesting post. Thank you. Clive’s translation of the Japanese document shows the USTR’s assertion that the US is negotiating from a position of strength is false.

    1. Mike Sparrow

      They want Japan to buy American made arms. For arms dealers, it is a position of strength.

        1. susan the other

          and thanks Clive and Lambert. It’s pretty amusing how the Japanese were simply immovable on agriculture and Froman caved just to expedite and salvage the rest of the TPP. Of course the Japanese knew he would, right?

      1. Yves Smith

        Japan was always going to buy American made arms, so I don’t understand your point. To not buy American arms would be seen as a declaration of war by the US.

  8. rfdawn

    Agricultural protectionism hasn’t conceded much anywhere, it’s not just Japan. Almost as if it isn’t a free trade agreement at all.

    1. ifthethunderdontgetya™³²®©

      It isn’t.

      The people with most of the money are more concerned with getting top dollar for their drug patents, movies, etc. than actually lowering any genuine trade barriers for something paltry like agricultural exports.

      And they sure as hell don’t want pesky foreigners complaining about pollution or protection for workers when corporate profits are the only thing that matters.
      ~

  9. DRob

    Pathetic! All the self righteous, group thinking trendies who are now complaining how the Obama admin has caved to get a TPP agreement are the same people who blasted all the critics of the Iran nuclear agreement with charges of political bias and/or dual loyalty. Is it just possible that Obama/Kerry caved even more to get the Iran agreement, but ideological blinders kept the trendies from seeing it?

    1. Lambert Strether Post author

      I deprecate general proffers addressed to the air. Did you have any particular comment in mind?

      For myself, I don’t think Obama caved at all on TPP, and if Obama caved on Iran at all, (a) it would have been to the Europeans, who told him they weren’t going back to the table, and (b) it would be part of his “pivot” to Asia.

  10. JTMcPhee

    Got to love the triangulation and machinations of our palace guards and special pleaders. Since they operate in a bubble suspended from a balloon floating on a froth of funny money generated by all that “trade”…

  11. greg

    Is this actually a problem? In real terms, since agriculture, and especially meat production, is so heavily subsidized, the real cost of meat to our economy is probably much greater than the nominal price we pay for it in the store. (Yes, even for us, who buy it here.) So in real terms, we would be selling meat to the Japanese at a loss. Consider also that other real costs, such as animal waste disposal, and soil neglect, are externalized onto our environment. And our children.

    The real problem is that, because of relentless extraction of wealth from the economy by our wealthy masters, (and the TPP would be but but another tool in their extraction kit,) agricultural subsidies have become a political necessity, as without them many more millions would be unable to afford enough food to live on.

    So the reality is, our government is really not interested in exporting more meat to Japan, as it would drive up the price of meat here. Of course, American farmers should probably be a bit put out.

    So we lose, but we win. This one.

    A shout out to non-vegetarians, of which I (sigh) am one: That juicy steak is brought to you in part by your children’s future.

  12. Kevin Zeese

    Pull back the lens and incorporate the US military pivot to Asia. Abe put in place its new security laws allowing the Japanese military to work with ours (or any other country) to use their military against another country. The US is also pushing a greatly expanded base in Okinawa. Japan is the most important country in the region for the Asian Pivot and a key to US hegemony in the region. Was “giving away the store” on the TPP part of the payoff? Japan, like the US, has a history of empire and dominance of other countries. Japan, no doubt, wants to be the Asian enforcer of US dominance of Asia. All of this is linked to the reality that the US is the largest empire in world history and that we live in an empire economy. Empire economy has great costs to those who live inside it (beyond the enormous cost of the military) and one of those costs is lousy trade deals with nations who are key partners in the US Empire.

  13. Holger

    Thank you for sharing this. I gave the link of this to an organisation over here in Germany:
    http://www.lobbycontrol.de
    Maybe they can use it in the European cause against TTIP.
    It definitly sheds some light onto the dirty deals that come with these “free-trade” agreements.

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