NEWS
HOPES OF A LEVEL PLAYING FIELD FOR US WINES IN JAPAN
By Siulan Law Mathews DipWSET
29-4-2019
President Donald Trump told visiting Japanese Prime Minister Shinzo Abe last Friday that a new bilateral trade deal could be reached by the time he visits Tokyo in May, hopefully would level the playing fields for American wine exporters in the Japanese market.
Abe’s visit, which included a round of golf on Saturday with Trump, was to set the stage for Trump’s Japan visit in late May to celebrate Prince Naruhito becoming the new Japanese emperor.
A US-Japan free trade agreement is welcome news to US wine exporters because it would level their playing fields in the Japanese market.
One of Trump’s first acts as president was to pull the country out of the Trans-Pacific Partnership (TPP), the 12-country free trade deal negotiated by President Obama but left unfinished.
The 12 countries are USA, Japan, Australia, Peru, Malaysia, Vietnam, New Zealand, Chile, Singapore, Canada, Mexico and Brunei.
The remaining 11 members proceeded without USA, slashing tariffs with each other and leaving American businesses at substantial competitive disadvantage.
Benefiting from TPP, Australian wines are currently taxed at 5.6% in Japan and will eventually drop to zero and there is no duty for Chilean wines. Worse still, the EU-Japan free trade agreement became effective early this year, wines from EU countries also enjoy zero tariffs in Japan.
Comparatively, California wine exporters have to face 15% tariffs when exporting to Japan.
According to the Wine Institute, the California wine trade body, the EU-Japan accord has opened up more opportunities for European wines in Japan. Italy, the third largest wine exporter to Japan, recently signed a deal to promote Italian bottles in 10,000 Japanese supermarkets.
Last week, the Wine Institute and 87 other food and farm groups and companies sent a joint letter to Trump’s top trade official Robert Lighthizer.
They said in the letter: “U.S. exporters of wheat, beef, pork, dairy, wine, potatoes, fruits and vegetables and other products are facing collapse of their Japanese market share as these lucrative sales are handed over to their competitors.”
Lighthizer has held trade talks with Japanese economy minister, Toshimitsu Motegi, ahead of Abe’s USA visit last week.
American media quoted the Japanese Embassy in Washington as saying that Japan is prepared to provide the USA with the same tariff rates that Tokyo negotiated with the EU and the 10 other TPP countries.
However, the two sides are still to agree on the scope of the trade negotiations. It is still very uncertain whether a trade deal could be reached by the time Trump visits Tokyo in May.
(the writer can be contacted at: SLawMathews@thewinechronicle.com)
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