KANSAS CITY- Earlier this week, the European Union and Japan announced they reached a trade agreement that will reduce tariffs on imported beef and pork products.
The agreement includes an 85 percent of tariff line dealing with EU agricultural food products exported to Japan will be allowed to enter duty-free over time, corresponding to 87 percent of current exports value for agricultural products.
The pact discontinues a 4.3 percent ad valorem duty for high-value tariff cuts will be phased out over 10 years. It will also reduce the tariff on EU pork products to around 44 cents per kilo from the estimated $4.35 kilograms currently.
Beef will also be affected. According to the trade pact, tariffs on beef and veal will change from 38.5 percent down to 9 percent with an initial cut bring the tariff down to 27. 5 percent.
Danish Crown, a Denmark-based meat producer, lauded the pact and how it will help its business with the Japanese markets.
“The free trade agreement creates better opportunities for exporting high-quality specialty products to Japan,” said Jais Value, group CEO of Danish Crown. “Danish Crown already has a foothold in this Japanese market which is supplied from our abattoir in Ringsted, Denmark. Now our task is to increase sales and strengthen customer relationships, and fortunately the Japanese market has already indicated its interest in doing so.”
This has many pork and beef companies in the United States concerned. Since the Trump administration canceled the Trans-Pacific Partnership early in 2017, advocates for free trade want to keep a strong relationship with Europe and Japan.
In 2016, Japanese consumers purchased almost $1.6 billion of US pork products. Demand in Japan for US pork is high despite tariffs and other import measures that limit market access for to it.
“The United States must quickly finalize a trade deal with Japan if it wants to maintain that important market,” said National Pork Producers Council President Ken Maschhoff. “We can’t stand by while countries around the world negotiate agreements that give them a competitive advantage over American products.”
The US Meat Export Federation (USMEF) also expressed concern about how the EU could start grabbing a bigger part of the Japan beef import market.
“Although the EU is not currently a major beef supplier to Japan, Europe has become a factor in Japan’s imports of tongues and other beef variety meats,” USMEF said in a statement. “Through the agreement with Japan, duties on EU beef variety meats will be slashed initially and phased to zero over the next 11 to 13 years, putting the US at a significant disadvantage.”