EU Pork, Beef Gain Advantage in New Trade Agreement with Japan

The European Union and Japan have completed negotiations on an economic partnership agreement that will significantly lower tariffs on Japan’s imports of EU pork and beef.

U.S. Meat Export Federation (USMEF) Economist Erin Borror explains that the red meat trade terms included in the Japan-EU agreement mirror those that the U.S. had previously negotiated with Japan under the Trans-Pacific Partnership (TPP). For EU pork, the biggest market access gains are for processed products, where tariffs on items such as ground seasoned pork and canned hams (currently 20 percent) will be phased out over five years. Tariffs on bacon and cured hams (now 8.5 percent) will be phased to zero over 10 years and Japan’s gate price, which sets a minimum value on these items that has greatly limited trade, will be eliminated by year 12. The EU is currently Japan’s second-largest pork supplier, following the United States.

Japan’s 38.5 percent tariff on EU beef will drop initially to 27.5 percent, then will be phased down to 9 percent over 15 years. While the EU is not currently a large player in the Japanese beef market, European exporters may be well-positioned to capitalize on expanded opportunities for beef variety meat items such as tongues and skirts. Japan’s tariff rate on these items will drop from 12.8 percent to 6.4 percent initially, then will be phased to zero by year 11 for tongues, and by year 13 for skirts.


TRANSCRIPT:

Joe Schuele: In this U.S. Meat Export Federation report, USMEF Economist Erin Borror explains the terms of the just-announced trade agreement between Japan and the European Union. She notes that the biggest advantage for European pork in the near term will be in the processed meats category.

Erin Borror: The agreement mirrors what was used in TPP for pork. Europe is going to gain duty-free access to Japan’s processed pork market. There is a 20 percent tariff on ground seasoned pork that goes into Japan’s sausage manufacturing, and various canned ham type items. That 20 percent duty will be eliminated over five years. This is a very important segment for U.S. exports. Our exports of ground seasoned pork were worth more than $250 million last year. Canned hams was valued at $80 million last year. Japan will also eliminate its complicated feet price system, plus 8.5 percent tariff on ham and bacon. That will be phased out essentially over 12 years for Europe. Ham and bacon trade today is limited to a few thousand tons, so it would take some time, but Europe will have a jump start on this market that’s been protective and quite limited.

Joe Schuele: The EU is not a large player in the Japanese beef market, but could gain a leg up on variety meat items such as tongues and skirts.

Erin Borror: For chilled and frozen beef, that tariff of 38.5 percent drops to 27.5 percent initially, and then it’s a slow phase down to 9 percent over 16 years, which is actually better than what Australia has in their bilateral. And on variety meats, which is where Europe is really making a splash at the moment with items like tongues, tariffs are also reduced dramatically from the get-go. Those 12.8 percent tariffs will drop to 6.4 percent, and then phase to zero by year 11 for tongues and for skirts by year 13.

Joe Schuele: For more information, please visit USMEF.org. For the U.S. Meat Export Federation, I’m Ralph Loos.