On Monday, US President Trump and South Korean President Moon Jae-in signed a revised version of the United States-Republic of Korea Free Trade Agreement (KORUS). This means the duty rate on US beef has been reduced to 21.3% from 40%, and will continue to decline each year until it is eliminated by 2026.
The United States is the largest supplier of beef to Korea and trails only the European Union as the second-largest pork supplier. US red meat exports to Korea set a record last year of $1.7bn, up 19% year-over-year and up 69% from 2012, when KORUS entered into force.
Then on Wednesday, Trump and Japanese Prime Minister Shinzo Abe released a joint statement affirming the “importance of a strong, stable, and mutually beneficial trade and economic relationship between the United States and Japan” and “recognizing that our economies together represent approximately 30% of global Gross Domestic Product”, which bodes well for producers exporting beef to Japan.
US Meat Export Federation president and CEO Dan Halstrom issued the following statement on the Japanese talk, hoping to see a swift result.
“Japan is the leading value market for US beef and pork, and there is tremendous room for further export growth. But for that to happen, tariff relief is absolutely essential so that US red meat is on a level playing field with our main competitors. USMEF is very encouraged by the commitment to open negotiations on a US-Japan trade agreement, with specific inclusion of agricultural market access. We hope to see rapid progress in these negotiations.”
The announcements were unsurprisingly welcomed by the United States Cattlemen’s Association (USCA).
President Kenny Graner issued the following statement: “US cattle producers sent $7.27bn of beef to South Korea in 2017, making the United States the largest supplier of beef for the country. The revised KORUS trade agreement, with a reduced and eventually eliminated tariff schedule for beef, represents the Administration’s dedication to securing fair trade agreements that put domestic producers first.
“Expanding market opportunities for US beef exports to large consuming countries like Japan and Korea is an important objective for US producers. With the US withdrawal from the Trans-Pacific Partnership (TPP) last year, there has been concern that US beef would lose market share to one of our most important export markets - Japan. The joint statement indicating an intent of the US and Japan to enter into negotiations holds the hope that US producers will quickly be back on par with other major beef exporting countries who remained in the TPP. We are greatly encouraged by these recent actions and look forward to addressing our trade agreements with other countries with the same vigor.”
National Cattlemen's Beef Association President Kevin Kester also welcomed the news. “The National Cattlemen’s Beef Association strongly supports President Trump’s commitment to expanding trade with Japan. Today’s announcement is exciting news for America’s beef producers because Japan is our top export market, accounting for nearly $1.9bn in US beef sales in 2017. Unfortunately, US beef faces a massive 38.5% tariff in Japan—a trade barrier that hurts America’s beef producers and Japanese consumers. NCBA has been a strong advocate for a bilateral trade deal between our nations and looks forward to working closely with the Trump Administration to secure increased market access for our industry.
“We congratulate President Trump and Prime Minister Abe for taking this important step in our trading relationship. The faster negotiations conclude, the faster US producers can provide more Japanese consumers with the high-quality beef they demand.”
National Pork Producers Council (NPPC) also strongly praised the Trump administration. Japan is the US pork industry’s top value market, importing more than $1.6bn of US pork in 2017.
“This is fantastic news for America’s pork producers,” said NPPC President Jim Heimerl. “Japan has been our top export market for years, so it’s good that the administration wants to solidify the relationship with that important economic and geopolitical ally.
“This is very positive for the US pork industry, and it comes at a time when pork producers were having concerns about losing market share in Japan.”