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U.S. Faces Loss of Agricultural Markets in Japan

01/01/2019

On December 30th, Tokyo eased tariffs and quotas on partners in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPATPP). The U.S. unilaterally withdrew from the Trans-Pacific Partnership Agreement in 2017 allowing the eleven members of the CPATPP to benefit from the Agreement to the disadvantage of U.S. exporters. In February 2019, the provisions of the European Union-Japan Economic Partnership Agreement  (EU-JEPA) will provide competitive benefits for the 28 nations who are eager to displace U.S. exports.

In 2017, Japan imported agricultural products to the value of $12 billion. The U.S. currently supplies 48 percent of the wheat and beef markets and 31 percent of pork. U.S. farmers supply 52 percent of nuts and up to 20 percent of vegetables and fruits.

With the CPATPP and the EU-JEPA in  operation, participants will enjoy lower tariffs on chilled and frozen beef, prepared pork and other meat products, placing U.S. exporters at a competitive disadvantage.

The problem could be resolved by rapid negotiation and conclusion of a U.S.-Japan trade partnership, but the Administration is concerned over an automobile and parts trade surplus and as with China, alleged currency manipulation. It is hoped that a trade agreement will be reached with Japan certainly within the first quarter of 2019. Even if a level playing field is restored, the U.S. will have lost markets, especially in egg products, beef, pork and wheat.

For the first ten months of 2018 Japan imported 8,985 metric tons of egg products valued at $38 million. This trade represented 34 percent of volume and 41 percent of value. The unit value of egg products exported to Japan attained $4,207 per metric ton compared with an average of $3,192 per metric ton for the five other significant importers.