WASHINGTON, D.C. – The U.S. reached a major agreement with Japan that will allow American producers to meet Japan’s growing demand for high-quality U.S. beef with the signing of a new agreement to revise the beef safeguard mechanism under the U.S.-Japan Trade Agreement (USJTA).
Japan raised its “safeguard” duty on U.S. beef to 38.5% from 25.8% in March 2021 for 30 days after U.S. beef imports reached 253,051 metric tons, exceeding the 242,000 metric ton trigger level. Demand for U.S. beef had risen in that period as a drought slowed imports from Australia.
The tariff hike prompted the two countries to negotiate a new deal.
This updated agreement will amend the beef safeguard trigger level under the USJTA with a new, three-trigger safeguard mechanism. The amendment will allow U.S. beef exporters to more reliably meet Japan’s growing demand for high-quality beef, providing more predictability and reducing the probability that safeguard duties would be imposed on U.S. beef, as occurred in early 2021.
“This agreement demonstrates how strong allies can work together to benefit each other – and it’s another example of how the Biden-Harris Administration is strengthening trade ties and creating new and better markets for our agricultural producers and exporters,” said Secretary of Agriculture Tom Vilsack. “Japan is already the United States’ second-largest beef export market, and thanks to the work of Ambassador Tai and Ambassador Emanuel our producers and exporters have greater opportunities and greater certainty that their products will not be subject to higher tariffs.”
The agreement includes a new three-trigger mechanism whereby three criteria must be met in order for Japan to implement the safeguard and impose a temporary, higher tariff on U.S. beef. The three criteria are:
- Imports from the United States must exceed the original beef safeguard trigger level under the U.S.-Japan Trade Agreement;
- The aggregate volume of beef imports from the United States and the original signatories of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) must exceed the CPTPP beef safeguard; and
- Imports from the United States must exceed the total amount of beef imports from the United States during the previous year. This third trigger will be in effect until 2027.
Kent Bacus with the National Cattlemen’s Beef Association in an interview with Brownfield Ag News, said this agreement underscores the importance of good trading relationships. “When you have good terms of trade, they are not going to guarantee your success, but they are going to position you to be able to capitalize on consumer demand,” Bacus said. “That’s one of the biggest barriers we face is that it’s not that consumers don’t want our product, it’s just that we don’t have access to them.”
In 2021, the United States was the top beef exporting country in the world, with global sales of beef and beef products valued at over $10 billion. Exports of U.S. beef to Japan totaled almost $2.4 billion in 2021, with Japan representing the United States’ second largest beef export market.
The agreement can be viewed here.