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The pact will put in motion decreased tariffs and increased beef exports to Japan.
December 4, 2019
“This agreement is one of the biggest developments in the history of red meat trade, as no international market delivers greater benefits to U.S. farmers and ranchers, and to the entire U.S. supply chain, than Japan.”
That’s Dan Halstrom’s reaction to news that the Upper House of the Japanese Parliament approved the U.S.-Japan trade agreement on Dec. 4, which will greatly improve access for U.S. red meat in Japan. Key provisions of the agreement, which was approved by Japan's Lower House on Nov. 19, were released in October by the Office of the U.S. Trade Representative (USTR).
Halstrom, U.S. Meat Export Federation (USMEF) President and CEO, said with the U.S.-Japan trade agreement now approved by the Japanese Parliament, the U.S. beef and pork industries look forward to expanded opportunities in Japan, which is already the largest value destination for U.S. pork and beef exports (combined export value in 2018 was $3.7 billion). “In addition to the benefits provided to the U.S. industry, Japanese consumers will now enjoy more affordable access to a wider range of U.S. products. “
NCBA President Jennifer Houston echoed the U.S. beef business’ appreciation. "There's just no other way to say it: this is a tremendous victory and a great day for America's beef producers and Japanese consumers.”
“Japan is the number one export market for U.S. beef, and for many years it has been a top priority of NCBA to remove tariff and non-tariff trade barriers that have prevented American beef producers from meeting Japanese consumer demand for safe and high-quality U.S. beef,” she said.
“This agreement levels the playing field and opens the door for U.S. beef producers to meet consumer demand in Japan. NCBA has been a strong supporter of President Trump’s push for a bilateral trade deal with Japan, and we look forward to capitalizing on this opportunity in 2020.”
With tariff rates mirroring those imposed on major competitors, USMEF's forecast for 2020 is for U.S. beef and pork exports to Japan to reach $2.3 billion and $1.7 billion, respectively. Export volumes are projected to be roughly 360,000 metric tons for beef and 410,000 metric tons for pork. Volume and value projections are based on reduced tariff rates being in place for the full year.
USMEF projects that by 2025, U.S. red meat exports to Japan will approach $5 billion—roughly $2.8 billion for U.S. beef and more than $2 billion for U.S. pork—as consumption of U.S. red meat increases due to greater access for Japanese consumers and the U.S. gaining market share. The agreement also opens new opportunities for value-added and processed red meat products, with tariffs on these products phasing to zero, which contributes to the overall growth in U.S. exports to the high-value Japanese market.
“Because of the Administration's commitment to this issue, America's cattle producers will no longer be at a competitive disadvantage in our largest export market. That means our current market of $2 billion a year—nearly $100 per head sold—is likely to grow in the years to come," Houston said.
“I commend Japan’s quick action to approve these important trade agreements between our two nations, which are the world’s first and third largest economies, said USTR Robert Lighthizer. “We expect the President to sign the implementing proclamation for the United States next week.”
The United States is preparing for the U.S.-Japan Trade Agreement and the U.S.-Japan Digital Trade Agreement to go into effect on January 1, 2020. As agreed by President Trump and Prime Minister Abe, both governments will begin consultations early next year in order to enter into further negotiations on a broader trade agreement, according to Lighthizer.
With the approval by the Diet, Japan's upper legislative chamber, the bilateral trade deal with the United States will gradually lower the tariff on U.S. beef from 38.5% to 9%. This will keep U.S. beef on a level playing field with imports from Australia, Canada, Mexico, and other countries. Japan is the largest export market for U.S. beef, accounting for approximately $2 billion in sales per year, according to USMEF.
Senior Editor, BEEF Magazine
Burt Rutherford is director of content and senior editor of BEEF. He has nearly 40 years’ experience communicating about the beef industry. A Colorado native and graduate of Colorado State University with a degree in agricultural journalism, he now works from his home base in Colorado. He worked as communications director for the North American Limousin Foundation and editor of the Western Livestock Journal before spending 21 years as communications director for the Texas Cattle Feeders Association. He works to keep BEEF readers informed of trends and production practices to bolster the bottom line.
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