Rice Excluded From Trade Accord U.S., Japan Aim to Sign Soon

Jenny Leonard, Mike Dorning and Michael Hirtzer

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U.S. rice growers won’t get increased sales under the current terms of a trade deal agreed by President Donald Trump and Japanese Prime Minister Shinzo Abe, people familiar with the accord said.

While there are still details to be finalized, the people said there won’t be any expansion of Japan’s quotas for U.S.-grown rice. U.S. producers hope the issue will be dealt with in the second phase of negotiations between the two countries, according to one of the people.

Still, it’s unclear whether or when Trump and Abe will continue talks given that any trade deal in Japan has to be approved by the parliament and the Trump administration is running out of time before the 2020 presidential election.

Japan is a key export market for U.S. rice farmers, who have been under pressure after the Asian nation signed trade agreements with other countries including the revised 11-member Trans-Pacific Partnership. U.S. Agriculture Secretary Sonny Perdue had suggested the White House may make a concession on rice, which is “sort of a cultural issue in Japan,” local media have reported.

“Although we are glad to see the bilateral agreement between the U.S. and Japan, we were disappointed to see that U.S. rice was not included,” said Stuart Hoetger, a rice trader and manager of Pinnacle Rice Coop in Chico, California. A spokesperson for the U.S. Trade Representative didn’t respond to a request for comment.

Japan is required to import 682,000 tons of rice under World Trade Organization commitments, with the U.S. typically making up about half of that amount, according to USA Rice. Since Japan signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, there’s been more competition from Australian producers, the industry group said.

Chris Crutchfield, president of rice miller and marketer American Commodity Company LLC in Williams, California, said the U.S. industry wants not only more volume but better quality access to the Japanese market. Much of the U.S. rice going to Japan is auctioned by the government and used to make noodles, beer or sake, with only a small amount sold as table rice. American rice should be allowed to be auctioned directly to private buyers and marked as being grown in the U.S.

“We still believe the administration is going to get us something better than we currently have,” Crutchfield said by telephone.

(Adds comments from rice miller in last two paragraphs)

--With assistance from Isis Almeida.

To contact the reporters on this story: Jenny Leonard in Washington at jleonard67@bloomberg.net;Mike Dorning in Washington at mdorning@bloomberg.net;Michael Hirtzer in Chicago at mhirtzer@bloomberg.net

To contact the editors responsible for this story: Anna Kitanaka at akitanaka@bloomberg.net;James Attwood at jattwood3@bloomberg.net

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