Statement on U.S.-Japan Trade Agreements

WRITTEN COMMENTSON: “U.S.-Japan Trade Agreements”TO: Subcommittee on Trade, U.S. House of Representatives Committee on Ways & MeansBY: The U.S. Chamber of Commerce and U.S.-Japan Business Council

The U.S. Chamber of Commerce and U.S.-Japan Business Council appreciate the opportunity to present the following comments on the U.S.-Japan Trade Agreements for consideration by the House Ways and Means Trade Subcommittee.

At the outset, we would like to stress that we welcome many of the provisions included in the U.S.-Japan Digital Trade Agreement and the useful constellation of “Stage 1” outcomes on agriculture and certain industrial goods in the broader U.S.-Japan trade negotiations. While these are positive developments, we respectfully urge the Administration to hold fast to its commitment to achieve a comprehensive, high-standard trade agreement with Japan with the broad outcomes such an agreement would reflect. We also ask that Congress works to ensure that the initial package does not impede momentum toward a broader trade accord.

Addressing the full range of U.S. trade concerns through a state-of-the-art, comprehensive trade agreement is of fundamental interest to American businesses and their workers in a wide range of sectors. It is especially important because other major economies, including the European Union (through the EU-Japan Economic Partnership Agreement); and Canada and Mexico (through the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership), have recently entered into market-opening trade agreements with Japan. As a result, a broad array of industries in these countries already enjoy preferential access to and treatment in the Japanese market.

The breadth of the U.S. business community’s priorities in the U.S.-Japan trade negotiations are well known. Among the areas that should be addressed in a comprehensive trade agreement with Japan are: market access and technical barriers to trade; services (including financial, telecommunications, audiovisual, express delivery, ICT, and other professional services); intellectual property, copyrights, trademarks, and trade secrets; customs administration and trade facilitation; investment; government procurement; regulatory cooperation and good regulatory practices; transparency and procedural fairness; state-owned and controlled enterprises; anti-corruption; small and medium-sized enterprises; and competition policy.

These priorities are reflected in comments submitted to the Office of the United States Trade Representative by our organizations in November 2018 and in the negotiating objectives established by Congress in the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (known as Trade Promotion Authority). While the “Stage 1” agreements omitted most of these priorities, we remain hopeful that they will be included in “Stage 2” and believe that Congress should work to ensure that these outcomes are achieved. The United States-Mexico-Canada Agreement (USMCA) serves as a model in many respects, and we believe there is a real opportunity in the trade negotiations with Japan to create a new “gold standard” trade agreement that will help U.S. firms maintain a foothold in one of the world’s most dynamic markets and regions.

Additionally, we believe that regular engagement with the private sector directly, as well as through the Advisory Committee for Trade Policy and Negotiations (ACTPN) and relevant Industry Trade Advisory Committees (ITACs), would have led to an even stronger “Stage 1” outcome. In section 135 of the Trade Act of 1974 (1974 Trade Act, 19 U.S.C. 2155), Congress established a private-sector advisory system to ensure that U.S. trade policy and trade negotiation objectives adequately reflect U.S. commercial and economic interests; unfortunately, during Stage 1, they were not sufficiently consulted and strong outcomes could have been achieved.

The United States and Japan have built a close strategic partnership, and our bilateral relationship demands an economic partnership that is equally exceptional. We recognize Stage 2 negotiations will be challenging and stand ready to work with both sides to secure successful outcomes that strengthen ties between two of the world’s largest economies. Beyond the overarching priorities outlined earlier, the members of the U.S. Chamber and the USJBC have identified a number of issue- and sector-specific priorities that are outlined in the following submission.