print
print

Key Topic – Japan-Australia Economic Partnership Agreement

Japan-Australia Economic Partnership Agreement – An economic partnership agreement between Japan and Australia took effect Jan. 15, 2015, allowing Australia to benefit from an immediate and significant tariff advantage over U.S. beef. Tariffs on chilled and frozen Australian beef (which had been 38.5 percent – the rate that still applies to U.S. beef) dropped by 6 percentage points and 8 percentage points, respectively, upon implementation. Tariffs dropped again on April 1, 2015 when the next Japanese fiscal year began, with chilled beef at 31.5 percent and frozen beef at 28.5 percent. On April 1, 2016, tariffs declined by an additional percentage point, so the rates stood at 30.5 percent for chilled beef and 27.5 percent for frozen. On April 1, 2017, tariffs declined further to 29.9 percent for chilled beef and 27.2 percent for frozen. On April 1, 2018, tariffs declined further to 29.3 percent and 26.9 percent, respectively. The duty rate is still 38.5 percent for U.S. beef and imports from most other suppliers, including the United States (for frozen imports from suppliers that do not have a trade agreement with Japan, the duty rate jumped to 50 percent under a safeguard mechanism from August 2017 through March 31, 2018).

Although U.S. beef exports rebounded impressively in 2016 and posted a very strong performance in 2017 and the first half of 2018, the widening tariff gap will be more difficult to overcome in future years. Australia will also gain deeper tariff rate cuts when the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) enters into force.