Tuesday, May 30, 2023

Japan: the results of the latest trade agreements on the pork market

Japan has recently ratified several trade agreements that will eliminate three tariffs (entry price, ad-hoc and safeguard) previously used on most imports of pork products. Japan has ratified trade agreements with the United States, the European Union, the United Kingdom and the countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which includes Australia, Brunei, Canada, Chile, Malaysia, Mexico . New Zealand, Peru, Singapore and Vietnam.

The changes outlined in Japan’s recent trade agreements could improve the competitiveness of partner countries in the Japanese pork market. This increased foreign competition could translate into less production domestically, more imports, and thus more availability of low-cost non-Japanese pork for consumers in Japan.

Here are the projected changes for 2028 relative to the 2018 baseline:

  • In 2028, Japan’s pork imports will increase by 3.6% for carcasses and half-carcasses, 12.2% for raw cuts and 13.9% for raw meat in processed products.
  • Japanese domestic production will decrease by 4.2, 11.6 and 11.8% in terms of carcasses and half-carcasses, raw meat cuts and processed pork products, respectively.
  • Total pork exports to Japan to the United States, the European Union, CPTPP countries, and the United Kingdom would increase to $281, $244, $232, and $0.21, respectively.

If the US-Japan trade agreement did not exist, the US would be subject to Japan’s entry price tariff system of the WTO. In this hypothetical scenario, the results show that the United States would lose a substantial portion of its market share to other countries in a trade deal with Japan, and that the United States’ market share would drop from 34 to 23% in 2028. The total value of US pork exports to Japan would also decrease by $385.9 million from 2018 levels.

Nation World News Desk
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