Iowa Gov. Kim Reynolds and Secretary of Agriculture Mike Naig led a group of 24 Iowans on a trade mission this week in Japan. In a teleconference from Japan on Tuesday, Reynolds told Iowa reporters: “I’m pleased with the discussions and meetings that have taken place. The opportunity for Iowa to increase trade with Japan is immense, especially with the passage of the U.S.-Japan trade agreement.”
Japan is Iowa’s third-largest customer, buying $1.5 billion of the state’s $18 billion in total exports last year. This week’s trade mission, focused on the food and ag industry, was aimed at expanding trade and investment opportunities and was coordinated by the Iowa Economic Development Authority. Japan in 2018 was Iowa’s leading export market for pork and beef, as Iowa companies exported $537 million in meat products to Japan. In addition, Japan was the second-largest destination for Iowa corn in 2018, importing $491 million in Iowa corn.
Opening doors for Iowa products
“Our goal is to increase exports of Iowa products to Japan and to encourage foreign investment in Iowa,” Reynolds says. “This is vital to our overall economic development. Leading trade missions such as this opens doors for Iowa by showcasing our products to the global economy and forging personal face-to-face relationships that last a lifetime. Japan is an important partner with substantial economic power, and we want to encourage Iowa companies to make the most of it.”
The delegation left for Japan Nov. 8 and returned to Iowa on Nov. 14 with “great optimism,” Naig says. “Iowa’s export opportunities have been aided by the recent U.S.-Japan trade agreement that greatly benefits, pork, beef corn and ethanol.”
The first phase of the U.S.-Japan agreement is now being considered by the Japanese government, with an eye on approving it and implementing it in early 2020. It would eliminate or lower tariffs on certain U.S. ag products.
President Donald Trump and Japanese Prime Minister Abe signed the agreement in September, and Japan’s leaders are expected to approve the first part of it. The two countries are still working on a broader deal that includes automobiles. “Once the first phase takes effect, work will begin on that second phase of the U.S.-Japan agreement,” Reynolds says.
Farmers need trade agreement
Naig says farmers in the U.S. needed a trade agreement with Japan after the U.S. pulled out of the Trans-Pacific Partnership. Japan and 10 other remaining members renegotiated their own trade agreement. “This new agreement between the U.S. and Japan is important because as Japan moved ahead with TPP, the U.S. faced higher tariffs than those countries still participating,” he explains. “The U.S.-Japan deal puts us back on a level playing field and gives us a slight advantage in some categories.”
Japan is a big market for U.S. farmers, Naig says. It ranks No. 3 on the list of customers of U.S. ag exports. Canada and Mexico are the No. 1 and No. 2; Japan is third.
The Iowa group’s itinerary on the trade trip included stops in Yamanashi, which has been Iowa’s sister state for nearly 60 years, as a member of the Iowa Sister States program. Other highlights included meeting with Gov. Kotaro Nagasaki of Yamanashi, an embassy reception in Tokyo and face-to-face meetings with industry representatives. The Iowans and Japanese business representatives discussed investment opportunities in Iowa.
Japanese firms invest in Iowa
Reynolds says Japanese companies have made more than $290 million capital investments in Iowa since 2010. Their operations include Ajinomoto, an amino acid manufacturer in Eddyville, and Valent Biosciences, a plant at Osage that makes environmentally friendly pesticides and other products.
“We are an important market for the Japanese, and they are an important market for us,” Reynolds says. “Based on the meetings we had during the mission trip, I’m very positive that we’ve laid a foundation for similar investments in the future.”
The trade mission was coordinated by the Iowa Economic Development Authority and included representatives of IEDA and the Iowa Finance Authority. Iowa companies involved in meat and food processing were represented, as was Iowa Farm Bureau, Iowa Pork Producers Association, Iowa Beef Industry Council, Iowa Corn Growers Association and the Iowa Sister States program.
Click on this link to listen to Gov. Reynolds and Secretary Naig’s media call-back from Japan Listen to Gov. Reynolds and Secretary Naig's media call-back from Japan.
The IEDA’s international trade office connects Iowa companies with markets for their products and services, educates Iowa businesses on exporting and assists global companies wishing to establish or expand operations in Iowa.