The Office of the U.S. Trade Representative (USTR) recently reported on the status of its consultations with Japan aimed at adjusting Japan’s safeguard trigger levels for imports of U.S. beef.
In the attached audio report, U.S. Meat Export Federation (USMEF) President and CEO Dan Halstrom expresses appreciation for USTR’s prioritization of this issue and explains the urgency of amending the safeguard threshold. In 2021, Japan’s imports of U.S. beef exceeded the safeguard threshold (242,000 metric tons) on March 17, approaching the end of the Japanese fiscal year (March 31). This triggered a higher tariff rate of 38.5% (up from 25.8%) on U.S. beef muscle cuts, which was in effect for 30 days. After this 30-day period passed, the tariff rate for U.S. beef declined to 25%, as provided in the Japan-U.S. Trade Agreement. But for beef suppliers that are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the 25% tariff rate went into effect April 1.
The next round of beef tariff rate reductions under both CPTPP and the Japan-U.S. agreement is set for April 1. But unless the safeguard threshold for U.S. beef is adjusted, Halstrom expects a similar scenario in which U.S. beef temporarily faces a significantly higher tariff rate than its competitors. The timing of the tariff rate increase is also unfortunate, as it impacts purchases leading up to Japan’s Golden Week holidays – a period of high beef demand. This year the snapback tariff rate is 30%, while the FY 2022 rate under Japan’s trade agreements is 24%. Competitors such as Australia, Canada, New Zealand and Mexico will receive their rate reduction on April 1, but it will likely be delayed for U.S. beef unless the safeguard threshold is amended. Halstrom emphasizes that this distorts the market by putting U.S. beef at a price disadvantage, while also causing some importers to delay purchases to avoid the period in which the higher rate is in effect.
The U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for developing international markets for the U.S. red meat industry. It is funded by USDA; the beef, pork, lamb, corn and soybean checkoff programs, as well as its members representing nine industry sectors: beef/veal producing & feeding, pork producing & feeding, lamb producing & feeding, packing & processing, purveying & trading, oilseeds producing, feedgrains producing, farm organizations and supply & service organizations. USMEF complies with all equal opportunity, non-discrimination and affirmative action measures applicable to it by contract, government rule or regulation or as otherwise provided by law. USMEF is an equal opportunity employer and provider.