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Japan to extend the current Safeguard measure in 2007

12 January 2007

JAPAN - Japan's Ministry of Agriculture, Forestry and Fisheries (MAFF) has set the trigger levels of beef safeguard in Japan Fiscal Year (JFY) 2007, proposing that the current Temporary Tariff Measures Law for JFY 2006 be extended to JFY 2007. It is likely to be approved by the government and to go into effect from April 2007.

The safeguard is a mechanism agreed to as part of the Uruguay Round of World Trade Organisation negotiations finalised in 1994 and allows Japan to lift tariffs when beef imports rise substantially. The beef tariff will rise from 38.5% to 50% for the remainder of the JFY once the trigger level is exceeded. The trigger is normally set at 17% higher than the preceding year, calculated for each JFY on a cumulative quarterly basis and separately for chilled and frozen product.

The calculation method was altered for JFY 2006 in recognition of the extraordinary circumstance generated by the lifting of the ban on imports from the US. The safeguard for JFY 2006, now proposed for 2007 also, is based on an average of actual imports in JFY 2002 and 2003. In the event that the trigger level based on the JFY 2002 and 2003 import average is below the trigger level calculated on the basis of imports in JFY 2006, the 2006 figure will be employed instead. The extension proposed by MAFF will generally allow slightly larger import volumes without triggering the increase of the tariff.

At this stage it seems unlikely that the safeguard for chilled or frozen beef will be triggered this fiscal year under the proposed arrangements, given the current restrictions on US beef imports and the drought-restrained supplies from Australia.

In the first quarter (April to June 2007) - the most crucial period as it would affect the rest of the JFY if the safeguard is triggered, the trigger level has been calculated at 74,339 tonnes for chilled beef, while the actual chilled beef imports of the same period last year were 57,700 tonnes. This means that Japan will be able to import an additional 28.8%, or 16,639 tonnes, without triggering the safeguard. The trigger level for frozen beef is 78,475 tonnes for the June quarter 2007, and the actual imports in the June quarter 2006 were 67,073 tonnes - allowing up to a 17%, or 11,402 tonne increase before resulting in the higher tariff level.

TheCattleSite News Desk


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