Monday, May 5, 2014

TPP Meat Tariff Reductions Would Benefit Consumers

Photo Source, Yomiuri

Japanese consumers will benefit tremendously if U.S. beef and pork tariffs are lowered as a result of a Trans-Pacific Partnership free trade agreement.
Japan imported 130,000 tons of beef and 300,000 tons of pork from the United States in fiscal 2012. According to Agriculture and Livestock Industries Corp., an independent administrative institution, U.S. beef shoulder was sold at ¥221 per 100 grams on national average at retailers in March. If the tariff on beef is lowered from 38.5 percent to 9 percent, the corresponding price will drop to ¥173. Lower tariffs on beef and pork will also likely have positive effects on employment.
Japan imposes a high tariff rate on beef. Domestic food makers are therefore producing such beef-containing products as meat sauce and retort pouch curry in other countries and then importing them back home. Lowering the tariff would enable food makers to buy U.S. beef at cheaper prices, making domestic production more economically viable. “We can also expect job creation,” a food maker official added.

Pork imports to be subject to the lower tariff are lower quality, lower-priced cuts for use as ingredients in processed meat including sausage and ham.

The tariff, currently at ¥482 per kilogram, will be lowered in phases over the next 15 years to around ¥50. For example, a ¥60 portion of imported pork is currently ¥542 after the tariff but will be priced at ¥110 if the tariff is lowered to ¥50—which will likely lead to lower prices for sausage and ham.

Livestock industry organizations are now concerned about the negative impact the proposals may cause. “Domestic meats will be substituted by imports, dealing a devastating blow to cattle producers,” warned one official.

From 70 percent to 80 percent of less fatty beef—not marbled beef—on the market will be replaced by imports based on estimates using the tariff rate, which was agreed upon by Japanese and U.S. negotiators, according to a livestock industry source.

About half of pork on the market may also be substituted by imports. “Without subsidies and other measures in Japan, domestic producers will have no choice but to quit,” remarked an official from a cattle industry organization.


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