USDA Study Spotlights Impact of Beef Import Tariff Imbalance in Japan

This week USDA released a study examining the impact of tariff rate reductions for Australian beef under the Japan-Australia Economic Partnership Agreement (JAEPA). While these reductions are being phased in over a 15-year period, Japan’s tariffs on Australian beef have already been cut to 31.5 percent for chilled product and 28.5 percent for frozen, while the tariff rate for U.S. beef remains at 38.5 percent. The full results of the USDA study are available online.

USDA projects a $106 million increase over baseline values for Japan’s imports of Australian beef if Australia is able to maintain its tariff advantage, while imports of U.S. beef would decline by $105 million. This includes a $58 million decrease in chilled U.S. beef, as Japanese importers substitute Australian product based on the tariff advantage.

The report also analyzes the impact if all countries were to benefit from the lower duties included in the JAEPA. In this scenario, Japan’s imports of U.S. beef would increase by just over $130 million while imports from Australia would decline by nearly $90 million and imports from the rest of the world would increase by about $17 million. The report does not specifically analyze the impact of the Trans-Pacific Partnership (TPP), but the TPP requires Japan to level the duties it assesses on U.S. and Australian beef as soon as the agreement enters into force, which indicates a similar, favorable outcome for U.S. beef.

On a related note, trade ministers from the 12 countries participating in TPP met in New Zealand Feb. 4 for the official signing of the agreement, and released this brief press statement. The White House also released a statement calling on members of Congress to approve TPP by the end of 2016.