The Ministry of Agriculture, Forestry and Fisheries disclosed details of the Japan-Australia Economic Partnership Agreement on Thursday, April 17, including setting low-tariff import quota for key meat products to prevent the domestic industry from being damaged by a sharp rise in imports.
But many worry that the agreement will result in influx of low-price Australian products, pressuring prices of domestic produce to decline.
The ministry, which has already revealed details of the agreement concerning beef and cheese which are items of special interest, disclosed this time specific rules regarding seven sectors – beef offal and prepared products, pork, poultry, chicken eggs, dairy products, honey and livestock.
An import quota will be established for beef offal such as tongue and diaphragm, and tariffs on prepared and preserved beef meat under the quota will be reduced by between 20 and 41 percent. As for beef tongue, the tariff will be cut from 12.8 percent to 7.6 percent. Import volume within the quota will be set at 22,300 tons for the beginning year and will be expanded to 29,300 tons in ten years.
Similar quota will also be set for pork products including sausages. Although the gate price system, which allows Japan to effectively increase costs for exporters if global imports increase significantly, will remain, the ad-valorem portion of the tariff – tariff on products whose import prices are higher than the standard price – will be reduced from 4.3 percent to 2.2 percent within the quota. The volume of imports within the quota will be set at 6,700 tons for the first year and will be expanded to 16,700 tons over five years.
The ministry believes the agreement will have little impact on the domestic industry, as the imports are unlikely to increase sharply under the new system. The quota for beef offal and prepared meat is about the same as the actual amount of imports from Australia. The imports of pork products from Australia amount to only 700 tons, less than 1 percent of total imports. Moreover, all of the reduced rates for tariffs within the quota are roughly the same level as those agreed in the EPA signed with Mexico.
However, it is highly likely that Australian meat products will be sold at cheaper prices in the domestic market. Since it is rather difficult to differentiate domestic products from imported products in terms of quality except for beef, “consumers might turn to cheaper Australian products, and the possibility of prices of domestic products being pushed down cannot be ruled out,” a Liberal Democratic Party lawmaker said.
(April 18, 2014)