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US Red Meat Squeezed in Japan by Free Trade Alternatives

29 March 2019

JAPAN - Japan is importing more pork and beef from European and North American free trade partners in a shift from the US that may impact Tokyo's upcoming trade negotiations with Washington.

Japan's pork imports from the US fell 14 percent on the year in February, while imports from the European Union jumped 54 percent and from Mexico and Canada each grew nearly 20 percent, shows Ministry of Finance data out Thursday.

The Japan-EU Economic Partnership Agreement, which took effect that month, lowered duties on certain pricey pork products to 2.2 percent from 4.3 percent, while tariffs on Mexican and Canadian pork are lower under the 11-member Trans-Pacific Partnership.

These free trade deals have created vast blocs excluding the US that offer lower tariffs on agricultural and industrial goods. Japan is set to drop meat tariffs still further in April under the TPP-11. Pressure on the White House from disgruntled cattle ranchers will likely put more heat on Tokyo when the two sides sit down as soon as next month to hash out a trade agreement on goods.

The EU accounted for roughly 44 percent of Japan's pork imports in February, up from a monthly average of 35 percent in 2018, while the American share dropped to 23 percent from 28 percent.

With Japanese hungry for beef from abroad, February imports of the meat from the US rose 17 percent on the year. But this paled beside the deluge from other TPP-11 members, with imports from Canada soaring roughly 260 percent and those from New Zealand rising 63 percent, as tariffs softened to 27.5 percent from 38.5 percent.

The American share of Japan's beef imports for January and February came to 39 percent, compared with an average of 41 percent across 2018. The decline marked a break from its steady growth since Japan resumed imports from the US in December 2005, after pausing over the outbreak of mad cow disease.

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Source: Nikkei Asian Review

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