Agreement on Trade Principles Between U.S. and Japan

Earlier this week (August 25th, 2019) President Trump and Japanese Prime Minister Abe announced that the United States and Japan have reached an agreement-in-principle that will address tariffs on agricultural goods like U.S. beef, as well as tariffs on industrial goods and digital trade. While no formal details have been published at this time, and it appears that negotiators will continue to work with the goal of signing a finalized trade agreement at the U.N. General Assembly in late September.  "We welcome the announcement of an agreement-in-principle, and we encourage President Trump to continue taking all necessary steps to secure a trade agreement with Japan as quickly as possible." MSCA President Mike Landuyt   Japan is the top export market for U.S. beef, accounting for over $2 billion in annual sales in 2018. A level playing field in the Japanese market will be critical for  continued success of U.S. beef as it continues to compete with countries that moved forward with CPTPP. Right now, these competitors from Australia, New Zealand, Canada, and Mexico have a 12 percent tariff rate advantage over U.S. beef, and that advantage will continue to grow unless a bilateral trade agreement is secured soon.  "The potential for a second big win with our highest value trading partner is great news for our members! The removal of the non-tariff trade barrier in May - Japan lifting the 30-month age-restriction - was a great first step to expanding our market in Japan. - Ashley Kohls, MSCA Executive Director. The aggressive efforts for a bilateral trade agreement with Japan are crucial to maintain and build U.S. beef's market share. According to the U.S. Meat Export Federation, U.S. beef export losses by 2023 are estimated at $550 million and will exceed $1.2 billion by 2028 due to widening tariff disadvantages and lost opportunities. On a per-head basis, losses are estimated at $20.40 by 2023 and will increase to $43.75 by 2028. Japanese Trade Fast Facts:   Japan is the top export market for U.S. beef. In 2018, Japanese consumers purchased nearly $2.1 billion of U.S. beef, accounting for nearly one-fourth of total export sales.U.S. beef currently faces a 38.5 percent tariff. Our competitors from Canada, Mexico, Australia, New Zealand face a 26.6 percent tariff in Japan, and that will gradually decline to 9 percent. 

Posted: August 28, 2019