On May 31, Japan’s Ministry of Finance announced the safeguard (trigger levels for beef and pork for the fourth quarter of Japanese Fiscal Year (JFY) 2019 (January 2020-March 2020), according to a recent USDA-Foreign Agricultural Service Global Agricultural Information Network (GAIN) report.
This announcement from Japan follows a March 31 report detailing trigger levels for the first three quarters of JFY 2019. The beef safeguard trigger is set at 117% of the previous year’s trade while the pork safeguard trigger level is 119% of the average of the three previous years of trade, the GAIN Report said.
“All three safeguards have a double trigger system based on imports from all trade partners and imports from countries with which Japan does not have an economic partnership agreement,” the GAIN Report said.
The trigger levels for beef and pork are calculated on a cumulative quarterly basis. In December 2018 and February 2019, Japan revised all three safeguard calculations following the entry into force of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Japan-EU EPA.
If any of these safeguards trigger, the tariff increases will apply only to countries that do not have a free trade agreement with Japan, which includes the U.S.
NPPC Urges Trade Resolution with Japan
The National Pork Producers Council (NPPC) is lobbying hard to help get U.S. pork producers back on a level playing field in Japan.
“U.S. pork producers are losing market share in Japan to international competitors that have recently negotiated more favorable trade terms in our most valuable market,” David Herring, NPPC’s president and a pork producer from Lillington, N.C. said in a press release on April 1. “We are already seeing a decline in sales to Japan and will see market loss accelerate if we don’t quickly secure competitive access to Japan.”
Dermot Hayes, an economist at Iowa State University, says U.S. pork will see exports to Japan grow from $1.6 billion in 2018 to more than $2.2 billion over the next 15 years if the U.S. quickly gains access on par with international competitors. Hayes reports that U.S. pork shipments to Japan will drop to $349 million if a trade deal on these terms is not quickly reached with Japan.
“U.S. pork producers are suffering significant financial harm from punitive tariffs levied on U.S. pork exports by China and Mexico in retaliation for U.S. actions on steel and aluminum and China’s trade practices,” says Maria Zieba, NPPC director of international affairs. “But an even bigger trade problem looms large. Key global competitors have negotiated and implemented trade agreements with Japan and the U.S. already is losing market share in its most important export market.”
Trade in the First Month of JFY 2019
Japan’s Ministry of Finance also announced actual import data for April 2019, the first month of JFY 2019.
Chilled beef imports from all trade partners accounted for 25,860 metric tons (30% of Q1 trigger) and from non-EPA countries, 11,480 metric tons (28% of Q1 trigger). Frozen beef imports from all partners came in at 41,408 metric tons (39% of Q1 trigger) and from non-EPA partners, 15,518 metric tons (42% of Q1 trigger).
For the pork SG, imports from all partners was 99,230 metric tons (36% of Q1 trigger) and from non-EPA countries, it was 22,301 metric tons (28% of Q1 trigger). For the pork SSG, imports from all partners came in at 99,236 metric tons (10% of annual trigger) and from non-EPA countries, 22,301 metric tons (8% of annual trigger).
More from Farm Journal’s PORK:
Fast Trade Agreement with Japan Essential for U.S. Pork Producers