Japan, the world’s largest pork buyer, will lower its tariff on pig meat shipments from Australia in a bilateral trade agreement that also reduces import duties on beef.
The levy will drop to 2.2 percent from 4.3 percent, within a quota that limits volume to 6,700 metric tons in the first year and rises to 16,700 tons within five years, the Agriculture Ministry in Tokyo said in a statement today. Pork imports from Australia were about 700 tons in the 12 months to March 31, 2013.
Japan is relaxing restrictions on trade with Australia as the U.S. presses it to cut agricultural protection for the 12- nation Trans-Pacific Partnership trade pact. The Asian nation imported 738,455 tons of pork worth $3.8 billion in 2013, of which 38 percent came from the U.S., the world’s largest exporter.
"Setting up a low-tariff quota for Australian pork may be designed to encourage the U.S. to soften its negotiating stance in the TPP talks," said Tetsuhide Mikamo, a director at Marubeni Research Institute in Tokyo. "The U.S. may lose some pork sales unless they reach agreement with Japan on tariffs given Australia gets an advantage under the bilateral accord."
Japan agreed earlier this month that it would gradually lower tariffs on imports of frozen beef from Australia to 19.5 percent and cut duties on chilled beef to 23.5 percent. That compares with 38.5 percent now and is an advantage to Australian ranchers, who surpassed U.S. farmers as the biggest beef exporters to Japan after a mad cow disease outbreak shut out American meat in 2003.
The trade accord with Australia is expected to take effect next year.
Economy Minister Akira Amari is visiting the U.S. this week to make progress in TPP negotiations before President Barack Obama visits Tokyo next week for talks with Prime Minister Shinzo Abe on trade and security.
Japan should agree that it won’t seek exemptions for goods including agricultural produce as it seeks to reach agreement on the TPP, U.S. Trade Representative Michael Froman said on April 3 at a House Ways and Means Committee hearing in Washington.
Japan, which depends on imports for about half of its meat supply, will also set up a low-tariff quota system for cattle tongues and offal from Australia, the Agriculture Ministry said today. The import levy on Australian cattle tongue will be cut to 7.6 percent from 12.8 percent, with the annual quota set at 22,300 tons in the initial year of the agreement, rising to 29,300 tons over 10 years.
Imports of the meat popular for barbecue grilling in Japan were 22,000 tons in the 12 months through March 2013, with 9,000 tons from Australia, according to the ministry.
Hog futures for June settlement in Chicago dropped 0.1 percent to $1.2365 a pound at 12:06 p.m. Tokyo time.