【News】 Beef, pork tariffs to be cut and low-tariff import quota to be set for dairy products and wheat; highlights of the Trans-Pacific Partnership deal (Oct. 6, 2015)


Takanori Okabe, Satomi Tamai and Hayato Niki – Atlanta

Under the Trans-Pacific Partnership free-trade agreement, which was reached on Monday, Oct. 5, Japan will establish new rice import quotas for the United States and Australia, while largely cutting beef and pork tariffs and the markup – an effective tariff – on wheat imports, it was learned the same day.

Japan will also create low-tariff import quotas for powdered skim milk and butter, and increase imports of sugar products.

Regarding rice, Japan will set up new tax-free import quotas at 50,000 tons for the U.S. and 6,000 tons for Australia, which will be expanded to 70,000 tons and 8,400 tons, respectively, over 13 years. The imports will be made through simultaneous buy and sell (SBS) tenders outside the minimum access scheme, but Japan is expected to boost imports of U.S. rice also within the minimum access quota. In addition, Japan will reduce or abolish tariffs on processed food and other products containing rice.

As for wheat and barley, Japan will maintain its government-controlled imports, but will cut the markup by 45 percent over nine years. It will also establish a new import quota of a maximum of 253,000 tons for wheat and 65,000 tons for barley. An import quota of 60,000 tons will be set for flour products and tariffs on pasta such as macaroni and spaghetti will be cut by 60 percent. Specific import quotas for the U.S., Australia and Canada will be set within the tax-free quota for malt.

Japan will incrementally lower its tariff on beef imported from all the other TPP member nations from 38.5 percent to 9 percent over 16 years. It will introduce safeguard measures to raise tariffs back if the total amount of imports from the TPP member nations surge to a certain level, but the tariff rate can be raised only to 18 percent after it is reduced to 9 percent. The safeguard measures will be abolished if they are not implemented for four years after the 16-year period.

Concerning pork, Japan will narrow down the range of its gate price system, which levies varying tariffs based on the price of imported pork. It will slash its JPY482 per kg specific duty on low-priced pork to JPY50 over 10 years, while abolishing its 4.3 percent ad valorem tariff on high-priced pork imports. Safeguard measures will be introduced, but will be abolished on the 12th year.

As for dairy products, Japan will create new low-tariff import quotas on powdered skim milk and butter for New Zealand, the U.S. and Australia. A quota of 150 tons each will also be created for imports of processed cheese from the three countries. Tariffs on some cheese, such as Cheddar and Gouda, and whey will be eliminated in a long term.

Japan will maintain the current sugar price adjustment system for unrefined and refined sugar, but will accept abolishing tariffs and reducing adjustment funds on raw sugar with high sugar content. It will establish a total of 96,000 tons of low-tariff import quota for sugar-containing products such as chocolate and cocoa preparations. Japan will also keep its price adjustment system for starch, while setting up a 7,500-ton quota for imports from other TPP member nations within the existing low-tariff import quota of 167,000 tons.

(Oct. 6, 2015)

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