American farmers on Monday welcomed a trade agreement reached in principle between the United States and Japan, saying the tariff-cutting deal would help them gain competitiveness instead of continuing to lose ground to foreign rivals.
"We are very happy that this agreement will end the growing competitive cost advantage that Canadian and Australian wheat imports got" under a revised Trans-Pacific Partnership free trade pact, which went into effect last year without the United States, a national wheat association said in a statement.
The United States had initially been among the TPP members, which includes countries like Australia, Canada and Japan. But it pulled out of the pact in 2017, with President Donald Trump saying he preferred to forge bilateral trade deals. He has also pushed for a deal to reduce the country's hefty trade deficit with Japan.
Trump and Japanese Prime Minister Shinzo Abe, who met on Sunday on the sidelines of the Group of Seven summit in France, agreed in principle on the bilateral trade deal and to step up remaining work to sign it in September.
While the details of the agreement are yet to be announced, Japan is expected to cut tariffs on U.S. farm products such as beef, pork, wheat and dairy products to around the same levels as in existing free trade frameworks such as the revised TPP.
Under the revised TPP, formally known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, Japan's 38.5 percent tariff on beef imports will be lowered in stages to 9 percent over 16 years.
With Japan being the top export market for U.S. beef, the U.S. National Cattlemen's Beef Association President Jennifer Houston has said in a statement that Trump delivered another "victory" for the U.S. beef industry.
"Last year, Japanese consumers purchased over $2 billion of U.S. beef, accounting for roughly one-quarter of overall U.S. beef exports. Removing the massive 38.5 percent tariff on U.S. beef will level the playing field in Japan," she said.
Japan also decided during the Abe-Trump meeting to purchase around 2.5 million tons of excess corn in the United States as the U.S.-China trade dispute has taken a toll on such farmers, according to government sources.
An association of U.S. corn growers said in a release Monday that the bilateral trade agreement is "very encouraging" and that it is looking into the possible impacts for its farmers.
"Japan is the second-largest purchaser of U.S. corn and has been an important, longstanding trading partner with America's corn farmers," the statement said.
U.S. Secretary of Agriculture Sonny Perdue also hailed the agreement, saying that the United States can sell more to Japanese markets by "removing existing barriers for our products."
"At the same time we will be able to close gaps to better allow us to compete on a level playing field with our competitors," he said in a press release issued on Sunday.