Japanese Tariffs on Us Beef After Tpp
Japan might have to impose a temporary safeguard tariff for American beef as the imported volume nears the limit of 242,000 MT agreed in the Japan-US Tarde Agreement firmed in 2020. The measure shall last for 30 days from its effective date, and the tariff will rise from 25.8% to 38.5%. Countries that have not surpassed their import quota for the safeguard are expected to benefit from the situation.
The Japanese government might have to impose a temporary safeguard tariff for the imported beef from the US soon, as it approaches the maximum level agreed for this FY in the Japan-US Trade Agreement in effect since January 2020. The maximum amount of beef agreed with the reduced tariff under the agreement for FY 2020 is 242,000 MT, and with a month left for the end of the FY, Japan has an accumulated volume of 233,112 MT by the end of February 2021. The temporary increase in the tariff shall become effective the following day that the maximum amount is surpassed and effective for 30 days. A consultation between the countries shall commence within ten days after the measure is taken to discuss the situation. The tariff will rise from 25.8% to 38.5% when the safeguard measure comes into action. Countries that have not surpassed their quota for the safeguard can benefit from the situation. The Japan-US Trade Agreement was initially firmed so that the US pork and beef can be competitive against its competitors who have preferential market access under the Japan-EU Economic Partnership Agreement and the Comprehensive and the Progressive Agreement (Japan-EU EPA) for Trans-Pacific Partnership (CP-TPP), which both came into effect at the beginning of 2019. The Japanese imports of American beef had an increasing trend with an average annual growth of 10% in the volume up to 2018. However, in 2019 the Japan-EU EPA and CP-TPP agreements came into force, beef from countries like Australia, Mexico, New Zealand, Canada, and the EU became more competitive than American beef. Consequently, in 2019 there was a YoY reduction in the American beef export volume by 3.55%. Source: Tridge, USMEF The Japan-US Trade agreement stipulates a gradual tariff reduction for chilled, frozen, processed offals of beef and pork from the US in conditions that mirror the reductions applied to the CP-TPP and Japan-EU EPA. The chilled or frozen pork will be phased to zero tariffs by 2027. The chilled or frozen beef will have the tariffs gradually down from the initial 38.5 to 9% by 2033, and the phase-out for other beef varieties of meats will be down to zero by 2033 but with different schedules as observed below. Source: USMEF At the beginning of March, the FAS/Tokyo have forecasted downward the Japanese total beef import of 2021 to 835,000 MT. The downward projection is a consequence of the slow recovery of the catering industry, which was affected by the on-going state of emergency in many of the main prefectures of Japan due to the COVID-19. And the decrease in the supply of Australian beef due to constraints in the supply and high prices compared to US suppliers. The YoY decrease of imports of beef from Australia is expected to be around 17%. The imports of American are expected to remain strong as importers switch back to American beef suppliers after the implementation of the Japan-US trade agreement. The USMEF considers the possibility that the US might trigger the beef safeguard each year as the exports grow fast. Source: USMEF
Japan Beef import Forecast for 2021
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Source: https://www.tridge.com/stories/japan-will-set-a-tariff-hike-on-us-beef-imports-as-it-nears-the-limit
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