Japan ready to meet US halfway on beef and pork tariffs

TOKYO -- Japan and the U.S. are inching closer to an agreement on import tariffs on U.S. agricultural products as part of the ongoing Trans-Pacific Partnership free trade talks.

An agreement between the two countries is crucial as failure to strike a deal among the member countries by spring could derail the entire process. Washington has been calling for an elimination of all tariffs.   

Japan has been trying to buy as much time as it can for lowering tariffs on agricultural products. In Japan, agricultural production has been declining in value over the years due in large part to an aging farming population and an increase in abandoned farmland. As such, concern has been growing over the impact on the domestic agricultural industry if Japan were to allow a flood of cheaper foreign imports in a short period of time.

Given the concerns, the Japanese government wants to be able to lower its tariffs on key agricultural products, such as beef and pork, over 10 years. The government hopes that will allow it to respond to domestic opposition and ease concerns among agricultural producers.

The Japanese government is willing to make significant cuts to beef and pork. It is widely expected to cut the 38.5% tariff on U.S. beef to about 10% over time and lower the 482 yen ($4.04) per kilogram levy on cheap U.S. pork to under 100 yen.

The U.S. National Pork Producers Council said "significant progress has been made with respect to Japan's market access offer on pork."

Import influx concerns

Japan and the U.S. will now shift their focus to conditions for safeguard measures that are designed to raise tariffs if imports increase sharply. Japan wants to make it easier to implement safeguard measures so that it can prevent a large influx of U.S. agricultural imports. However, the U.S. wants to raise the bar for applying safeguard measures in the hope of boosting its imports.

For Japan, the biggest hurdle is its negotiations with the U.S. But to conclude the overall TPP free trade talks, Tokyo needs to speed up and wrap up negotiations with other TPP member nations as well.

On Sunday, chief negotiators of the 12 TPP member countries met in New York to resolve pending issues. Japan's TPP chief negotiator Koji Tsuruoka is holding bilateral talks with his counterparts, particularly those from Canada and New Zealand. Negotiations with these two countries have been moving rather slowly. On Wednesday, Hiroshi Oe, Japan's acting chief negotiator in charge of tariff negotiations arrived in New York for talks with officials from TPP countries with which Japan is making slow progress.

So far, Japan has more or less reached agreements on import tariffs with both Brunei and Singapore. Plywood and other timber products have been a contentious issue between Japan and Malaysia, but the two countries are expected to reach a deal soon. With Australia, Japan is waiting to see how Canberra is going to coordinate domestic opinions. Some progress has been made on negotiations with Mexico, Chile and Peru. Japan has concluded economic partnership agreements with these countries and so the government has been making smooth headway in TPP negotiations with them.

More hurdles 

Japan has suffered a setback in talks with Vietnam, New Zealand and Canada. Even though its EPA with Vietnam is already in force, the two countries have yet to hammer out an agreement on rice and automobile import tariffs. However, a Japanese government official close to the negotiation said "we will make a significant progress in this round." 

New Zealand has made a strong case about eliminating Japan's import tariffs. The country is calling on Japan to open its market to cheese and other dairy products from New Zealand. Japan intends to apply lower-tariff or tax-free status to such products, but the two countries have yet to resolve their differences.

Dairy products have also been a sticking point in Japan's negotiations with Canada. Canada has had delays in talks not just with Japan but with other TPP member nations. Observers are raising concerns over Canada's possible withdrawal from TPP talks, which could threaten to derail the negotiation overall.  

Source: Nikkei