Japan and the U.S. are having beef over the price of meat.
The U.S. is pressuring Japan to remove import tariffs on pork and beef as part of the Trans-Pacific Partnership — a proposed new free trade agreement being discussed by twelve countries on the Pacific Rim. Next week when President Obama goes to Tokyo this issue will be high on the agenda.
Japan is the world's top importer of pork — Japanese eat expensive tenderloins and cutlets deep fried into crispy katsu.
"Over 25 percent of the U.S. pork is exported, and Japan is our most consistent trading partner," says Bob Ivey, general manager of Maxwell Foods, a major U.S. pork producer that sells to Japan. "So we are very excited about the new trade agreement."
But that agreement won't be easy. Japan has traditionally protected its agricultural commodities. Japanese Wagyu beef is renowned, and their pork industry is one of the world's largest. Still, the U.S. is pushing for much lower import tariffs on its meat.
"That's the U.S. demand. You could say roughly free trade in a little less than a generation," says Gary Hufbauer, senior fellow at the Peterson Institute, and international economics think tank. "This will be one of those down to the wire deals."
If they can't work this out, Hufbauer says Japan could drop out of the agreement altogether.