Poultry & Meat

Japanese Agreement with US Will Beef Up Meat and Potato Exports

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American beef and pork exporters had good reason to smile on December 4, as the Upper House of the Japanese Parliament approved the United States-Japan trade agreement, which will greatly improve access for US red meat in Japan. Key provisions of the deal, which was approved by Japan’s Lower House on November 19, were initially published in October by the Office of the US Trade Representative (USTR).

“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 American pork and beef exports (combined export value in 2018 was $3.7 billion),” stated US Meat Export Federation (USMEF) President and CEO Dan Halstrom. “This agreement is one of the biggest developments in the history of red meat trade, as no international market delivers greater benefits to US farmers and ranchers, and to the entire U.S. supply chain, than Japan.”

He continued: “USMEF thanks President Trump, USTR and USDA for prioritizing and securing this agreement, which is a major breakthrough for US agriculture. We also extend our appreciation to Prime Minister Shinzo Abe and his administration for taking unprecedented steps to expand market access for US red meat. In addition to the benefits provided to the US industry, Japanese consumers will now enjoy more affordable access to a wider range of American products.”

With tariff rates mirroring those imposed on major competitors to American exports, USMEF’s forecast for 2020 is for US 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.

The USMEF projects that by 2025, American red meat exports to Japan will approach $5 billion – roughly $2.8 billion for beef and more than $2 billion for pork – as consumption of US red meat increases due to greater access for Japanese consumers and the US 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 American exports to the high-value Japanese market.

Potato Sector Also Applauds Agreement

Also cheering the deal solidifying the trade benefits previously negotiated under the Trans-Pacific Partnership Agreement, is the Washington, DC-headquartered National Potato Council (NPC), which represents the interests of American potato growers on federal legislative, regulatory, environmental and trade issues.

“As the largest export market for US potatoes, Japan is vital for the continued health and prosperity of America’s potato growers and industry partners. On January 1 tariff reductions will be restored, placing the US potato industry on a level playing field with our foreign competitors, ” said Kam Quarles, the NPC’s chief executive officer.

Once fully implemented, the agreement will further reduce and eventually remove tariffs on US frozen and flaked potato products shipped to Japan, which totaled over $350 million in the past year. Given a competitive tariff regime and reasonable access to customers, it is believed that this market can grow by another $150 million annually (43%) in the very near future.

The value of US potato production is over $3.7 billion annually and supports hundreds of thousands of jobs both directly and indirectly.