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U.S. Dairy Manufacturers Call for Replacement of Japan's Import System

21:59PM Oct 28, 2014

Group says Japan’s state-trading enterprise makes it difficult for U.S. dairy exporters to access the market.

Source: International Dairy Foods Association

In a letter to U.S. Trade Representative Michael Froman and Secretary of Agriculture Tom Vilsack, the International Dairy Foods Association (IDFA) called for the replacement of Japan’s current import administration program in the Trans-Pacific Partnership (TPP), calling it a potential Achilles heel in the negotiations.

Japan’s Agriculture and Livestock Industries Corporation (ALIC) is the state-trading enterprise that administers the country’s manufacturing milk quotas and imports of dairy products under tariff rate quotas. IDFA believes that ALIC operates in a trade-distorting and inconsistent manner that makes it difficult for U.S. dairy exporters to access the market.

“Suffice it to say that its administration of Japan’s import constraints on dairy products is the antithesis of free and open trade. ALIC is in total control of Japan’s dairy imports,” said Connie Tipton, president and CEO of IDFA. “The financial benefits of the system flow entirely to the government, after which those financial ‘gains’ are shared with Japanese dairy producers. It would be difficult to imagine an import management system that is more trade distortive that this one.”

IDFA sent the letter in advance of bilateral meetings and the TPP Ministerial held over the weekend in Sydney, Australia. IDFA urged the officials to seek to replace the current ALIC system with a tariff rate quota system as part of the bilateral negotiations with Japan.

IDFA supports significant and real market access into Japan for all dairy products that would reach across all tariff lines and ultimately bring tariffs to zero within a reasonable transition period.