Source:Rita Jane Gabbett, MEATINGPLACE, 7/6/17
 

The European Union announced it reached a trade agreement with Japan that will reduce tariffs on several imported items, including pork and beef products.

Under the terms of the pact, about 85 percent of tariff lines concerning EU agricultural food products exported to Japan will be allowed to enter duty-free over time, corresponding to the 87 percent current export value for agricultural products.

Pork
Of particular concern to the U.S. pork industry is a dramatic reduction in tariffs applied to EU pork products exported to Japan. The agreement will phase out the 4.3 percent ad valorem duty for high value cuts over 10 years. More importantly, it will  dramatically reduce the tariff for EU pork products to about 44 cents per kilogram from the current roughly $4.25 per kilogram. In 2016, the EU exported about $1.4 billion worth of pork products to Japan.

“The United States must quickly finalize a trade deal with Japan if it wants to maintain that important market,” said NPPC President Ken Maschhoff. “We can’t stand by while countries around the world negotiate agreements that give them a competitive advantage over American products.” 

In 2016, Japan imported nearly $1.6 billion of U.S. pork products.

The U.S. pork industry has become increasingly dependent on exports, a trend that will continue as newly constructed pork processing plants come online this year and next year.

“European exporters stand to gain a significant advantage through the tariff reductions negotiated in the economic partnership agreement with Japan, which we understand are very similar to those included in the Trans-Pacific Partnership (TPP),” the U.S. Meat Export Federation (USMEF) warned in a statement emailed to Meatingplace. “The EU-Japan agreement underscores the fact that Japan – the highest-value destination for both U.S. pork and U.S. beef – is clearly moving forward in reducing agricultural trade barriers for other suppliers.”

Beef
Under the EU/Japan trade pact, tariffs on beef and veal will be cut to 9 percent from 38.5 percent over 15 years with an initial cut to 27.5 percent for a significant volume of beef products.

A volume-based safeguard for the Japanese beef industry will function on a model similar to the one agreed to by Japan in the TPP.

The EU export potential is fully reflected in the size of the safeguard, which will disappear in 15 years if not used over four consecutive years.  

“Although the EU is not currently a major beef supplier to Japan, Europe has become a factor in Japan’s imports of tongues and other beef variety meats. Through the agreement with Japan, duties on EU beef variety meats will be slashed initially and phased to zero over the next 11 to 13 years, putting the U.S. at a significant disadvantage,” according to USMEF's statement. 
“Duties on chilled/frozen EU beef cuts (currently 38.5 percent) will be initially cut by about 10 percentage points, then phased down to 9 percent over 15 years. Meanwhile U.S. beef continues to pay a 38.5 percent duty and remains subject to Japan’s quarterly beef safeguards.”

Non-tariff, technical barriers
The agreement addresses many non-tariff measures that had constituted a concern for EU companies, as some Japanese technical requirements and certification procedures often made it difficult to export safe European products to Japan.

The agreement also includes a commitment to ensure that standards and technical regulations are based on international standards to the greatest possible extent.

For instance, reliance on international standards will be helpful for easier and less costly compliance of food products with Japanese labeling rules.

Sanitary and phytosanitary measures
The EU and Japan have agreed to simplify approval and clearance processes to ensure import procedures are completed without undue delays so that undue bureaucracy does not negatively impact exporters.

The agreement will not lower safety standards or require parties to change their domestic policy choices on matters such as the use of hormones or genetically modified organisms (GMOs).

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