TOKYO, Nov. 1 — A Japanese government analysis of the agricultural sections of the Japan-EU free trade agreement has revealed that tariff cuts on sensitive products such as dairy and meat may negatively impact in the long term by increasing EU imports.
The analysis suggests that Tokyo will offer Brussels the same level of market openings, as large as the Trans-Pacific Partnership (TPP).
Once the agreement is fully implemented, Japan will scrap import tariffs on 82 percent of agriculture and food products imported from the EU. All industrial imports will be allowed to enter Japan entirely duty-free.
Despite tariff cuts on other agriculture products, rice is excluded from the agreement and is not subject to any tariff reduction.
Japan also maintains an articulated import scheme for pork, which includes both an ad valorem duty and a specific duty, but will reduce the tariff considerably.
At the same time, Japan is opening its markets for certain sensitive processed dairy products through tariff rate quotas (TRQs) or tariff reductions.
The analysis said that it won’t expect an immediate rise of European dairy imports, “but in the long run increased competitions will push down prices of products, such as skimmed milk powder, cheese and processing milk.”
It also expects a rise of European processed products such as pasta, chocolates, cocoa powder, candies, biscuits, starch derivatives.
Therefore, it is necessary to implement policies to boost competitiveness in the dairy sector as well as the payment scheme aimed to guarantee farmers more stable incomes, it concluded.
On July 6, Tokyo and Brussels reached a political agreement in principle for a new free trade deal, though some thorny issues still remain before it can be inked.
Both want to finalize the deal by the end of this year. Then they need to be approved by the Japanese and EU parliaments, with the aim of entering in force in early 2019.