The U.S. beef sector received good news this week when Japan announced it is ending its prohibition on importing beef more than 30 months old. That change is projected to boost U.S. beef exports to the country by $150 million to $200 million.
Nebraska beef producers have steadily increased their sales to Japan, their No. 1 overseas market. Exports leaped from $50 million in 2008 to $298 million in 2017.
This export opportunity will be undercut, though, unless U.S. negotiates a bilateral trade agreement with Japan as soon as possible, because the Asian nation is reducing its trade barriers significantly under its new agreements with Pacific-area nations and the European Union.
Japan has lowered its tariffs on beef exports from Australian and New Zealand beef producers twice since December. Those producers pay a 26.6% tariff, and further reductions are ahead, while the rate for U.S. producers remains unchanged at 38.5%.
In addition, U.S. beef producers — but not members of the EU and Pacific-area agreements — will face a 50% tariff on their exports to Japan later this year if Japan’s beef imports rise above a certain threshold.
The need to complete a U.S.-Japan trade agreement could not be clearer.