Japan to retain safeguard mechanism to non-TPP11 members

TOKYO, March 14 — Japan will maintain its safeguard mechanism in the event of a sharp rise in beef imports to non-members of the revised Trans-Pacific Partnership (TPP), such as the United States.

The decision came as U.S. President Donald Trump pulled his country out of the trade deal during his first week in office last year.

In the original TPP, Tokyo made key concessions by agreeing to abolish a World Trade Organization (WTO) safeguard mechanism and create a new one, as original TPP members including the U.S. were the major beef suppliers to Japan.

The WTO safeguard mechanism will still be administered for countries that do not have free trade agreements with Japan.

In the WTO system, Japan has the right to invoke safeguards to restrict frozen beef imports temporarily by raising the tariff from 38.5 percent to 50 percent when the imports rise more than 17% year-on-year in any given quarter.

That makes safeguards more likely to be triggered.

But the revised pact, now known as the Comprehensive Progressive TPP (CPTPP), would have an annual safeguards, making them less likely to be triggered.

Moreover, when the CPTPP enters into force, Japan’s beef tariff will be reduced from 38.5 percent to 9 percent over 16 years, with a sharp cut being front-loaded.

The CPTPP members include Australia, New Zealand, Canada, Chile, Mexico and five other Pacific Rim countries.

In August, Tokyo imposed the WTO safeguard to restrict frozen beef imports temporarily by raising the tariff, after the imports rises more than 17% year-on-year in the April-June quarter.

It mainly affects U.S. producers because they are the main suppliers of frozen beef to Japan, and Washington doesn’t have a free trade agreement with Tokyo. The measure will remain in effect through the fiscal year that ends March 31, 2018.

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