‘Just another headwind’: U.S.-Japan trade deal dims rare bright spot for Canadian farmers

A preliminary U.S.-Japan trade deal is expected to slash tariffs for American beef and pork exports, ending Canada’s advantage in the lucrative Asian market at a difficult time for farmers.

“In the past few months, as the U.S.-China trade war flared up and China turned away from us, Japan was one of the few markets where we had increased volume,” Gary Stordy, director of government and corporate affairs at the Canadian Pork Council, said. “We were able to substantially increase our market share. Now this is just another headwind.”

The White House is under pressure to deliver a win to farmers caught in the crossfire of a U.S.-China trade war that has seen Beijing slap stinging retaliatory tariffs on American soybeans and pork. U.S. farmers have also had to watch from the sidelines as nations like Canada and Australia gained market share in Japan due to the lower tariffs afforded to them under the CPTPP, a deal abandoned by Trump in 2017.

If the final deal matches CPTPP tariff levels, it will likely raise political tensions with the other member nations of that pact, trade analysts say. The narrow scope of the proposed deal is also prompting questions about its compliance with international trade law. The World Trade Organization’s “most favoured nation” provision requires countries to provide any privileges or concessions granted to one nation to all other WTO countries.

However media reports on the US Japan deal suggest it is “very limited” he added, and would hardly qualify as covering “substantially all trade.” That could leave the deal vulnerable to challenges from other countries before the WTO. Canadian meat exports have soared under the CPTPP with shipments of chilled pork to Japan up 8.5 per cent to 17,800 tonnes in April, nudging ahead of the U.S. for the first time, according the Japanese customs data.

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