As Japan and Australia speed up negotiations under the Japan-Australia Economic Partnership Agreement prior to Australian Prime Minister Tony Abbott’s visit to Japan scheduled next month, the Japanese agricultural industry is concerned over Australia’s pressure to open Japan’s agricultural market, especially regarding tariffs on beef. Australia has been asking Japan to largely lower the tariffs, and will surely increase pressure to liberalize markets if Japan shows any sign of compromising. We urge the Japanese negotiators to stick firmly to the Diet resolution.
The Australian government is demanding that Japan more than halve its tariff on beef imports, which is currently 38.5 percent. The nation is highly likely to take a hard line stance to open up Japan’s market for both frozen and refrigerated beef, and also on dairy products such as cheese. Japan is strongly resisting such demands, but some believe Japan needs to make a compromise at some point in order to conclude the talks, so there is no telling what will happen.
Political settlement would have a grave impact on domestic cattle farmers, especially in areas with those engaged in fattening Holstein bulls. They have been focusing on offering low-price domestically-produced beef to differentiate their products from premium Japanese black beef. Their products compete directly with Australian beef fattened by grain. Japan’s unique system of raising dairy steers and crossbred cows has helped improve profitability of domestic dairy farmers. If this system collapses, use of dairy steers as a resource for beef production will stop, possibly leading to weakening of cattle breeders and dairy farmers.
Diversified cattle breeding business in Japan has contributed to ensuring the nation’s food security, as well as maintaining farmlands and cooperation between crop farmers and livestock farmers. Livestock farmers are barely managing to keep their heads above water. Their business prospects remain unclear amid rising costs of materials such as compound feed and declining prices of domestically-produced beef carcass. If we let open Japan’s agricultural markets, what will happen to the nation’s integrated crop-livestock farming? We must not allow the government to make easy compromises.
Japan’s beef market has become a place for fierce competition between the United States and Australia. In 2003, Japan halted imports of American beef after the outbreak of bovine spongiform encephalopathy. Instead, Australian beef occupied 90 percent of imported beef in 2004. The U.S. beef industry regained its position as a major Japan-bound exporter after Japan resumed imports of American beef and relaxed age restriction on American beef imports, largely threatening Australia’s dominance.
Amid such situations, voices calling for elimination or reduction in Japan’s beef tariffs are growing in Australia. Last year, Australia concluded a free trade agreement with South Korea, in which South Korea agreed to reduce its beef tariffs to zero in 15 years. Japan is urged to take a similar measure. If Japan makes a compromise in negotiations with Australia, the United States will surely pressure Japan to make further compromises in the Trans-Pacific Partnership free trade negotiations.
Regarding negotiations on the Japan-Australia EPA, the Diet has adopted a resolution which later became the basis for its resolution for the TPP talks. The resolution requests that key agricultural products be excluded from EPA negotiations or negotiated separately in the future. Some say that if Japan can reach agreement with Australia in accordance with the resolution, it will provide a reason to persuade the U.S. as well. In any case, the negotiations will be tough. Politicians’ task is to keep the promise they made with the public no matter what.
(March 26, 2014)