Japan approves US trade agreement

By Aidan Fortune

- Last updated on GMT

Japan approves US trade agreement

Related tags Us Japan Beef Pork Processing and packaging Innovation Processing equipment & plant design

The US meat industry has welcomed the Japanese government’s approval of a trade deal between the two countries that could see meat exports grow to $5bn by 2025.

The deal, agreed in principle in August​ and confirmed in September​, was approved by the Upper House of the Japanese Parliament, the Diet, and is expected to be signed by US President Donald Trump next week with the agreement predicted to go into effect on 1 January 2020.

Under the US-Japan Trade Agreement, Japan has committed to provide substantial market access to American food and agricultural products by eliminating tariffs, enacting meaningful tariff reductions, or allowing a specific quantity of imports at a low or zero duty.

United States Trade Representative Robert Lighthizer 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.  We expect the President to sign the implementing proclamation for the United States next week.  The positive results the United States and Japan will gain from these agreements would not be possible without the strong leadership of President Trump and Prime Minister Abe.  Now, US farmers and ranchers will have significantly improved access to Japan’s market, and America’s leadership in the growing digital economy will continue to flourish to the benefit of all our workers.”

US Meat Export Federation president and CEO Dan Halstrom said: “With the US-Japan trade agreement now approved by the Japanese Parliament, the US beef and pork industries look forward to expanded opportunities in Japan, which is already the largest value destination for US pork and beef exports (combined export value in 2018 was $3.7bn).​”

USMEF’s forecast for 2020 is for US beef and pork exports to Japan to reach $2.3bn and $1.7bn, 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.

The USMEF projects that by 2025, US red meat exports to Japan will approach $5bn – roughly $2.8bn for US beef and more than $2bn for US pork. 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 US exports to the high-value Japanese market.

Domestic praise for deal approval

The progress has been welcomed by the US meat industry. “The Meat Institute applauds the Japanese Diet for swiftly approving a deal that will provide better access for American beef and pork exports to the critical Japanese market,”​ said North American Meat Institute president and CEO Julie Anna Potts. “The US will now be better positioned to compete with countries in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the European Union for valuable market share. We also continue to urge Congress to approve the United States-Mexico-Canada Agreement and to encourage the Administration to further strengthen negotiations with China and the EU to provide additional certainty for American consumers, workers and meat and poultry processors and producers.”

National Cattlemen’s Beef Association president Jennifer Houston added: “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 US 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 US beef. This agreement levels the playing field and opens the door for US 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.”

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