Japanese import fees remain at 38.5 percent

News
Aug 2, 2013
by DTN

Japan’s tariff on frozen beef imports will not rise Aug. 1 as feared, but could still rise later in the year as beef imports from the U.S., Canada and other countries increase.

Total frozen beef imports amounted to 72,010 tons in April-June 2012 and 77,775 tons during the same period this year, a rise of only 8 percent, according to Japan Ministry of Finance (MOF) figures. “The tariff will not rise” Aug. 1, said Takayuki Terano, an official at the Ministry of Agriculture, Forestry and Fisheries’ meat marketing and trade policy office.

Imports of beef to Japan are hit with a 38.5 percent tariff. When beef imports at the end of the current fiscal year exceed a surplus of 17 percent of the volume in the same period a year earlier, MOF automatically raises the tariff to 50 percent. The tariff is applied separately to chilled beef and to frozen beef numbers.

Final import figures for the April-June quarter come in late July. Imports exceeding those in the same quarter the previous year trigger the tariff hike on Aug. 1. MOF checks figures for April-September at the end of October, with the potential for a Nov.1 tariff increase; April-December numbers are revealed at the end of January for a potential Feb. 1 increase.

When excessive imports show up only in the final figures for the entire preceding year, which come out in late April, the higher tariff applies in May and June of the new fiscal year.

Tariff hikes under this system struck frozen beef in 1995 and 1996, and chilled beef in 2003. Each of those increases hit on Aug. 1.

The tariff system originated in the 1994 Uruguay Round on agriculture when Japan agreed to lower its tariffs on beef to 50 percent from 70 percent by 2000. In a notification to the General Agreement on Tariffs and Trade, which was replaced by the World Trade Organization in 1997, Japan said it was considering the 38.5 percent to 50 percent tariff levels.

The notification’s wording indicated the system would be optional, but Japanese legislators drafted the Temporary Tariff Measures law to make it automatic. The government put the twotiered system in place to protect Japanese beef producers against a surge of imports. Government officials did not foresee the finding of BSE in Canada and the U.S., which resulted in Japan banning imports from those countries in 2003.

U.S. and Canadian beef began trickling into Japan in 2006, limited to meat from cattle proved to be 20 months or younger as an anti-BSE measure.

Japan raised the anti- BSE beef age limit on U.S. and Canadian beef from 20 to 30 months on Feb. 1 and began allowing in Dutch and French beef with age limits. Combined, those changes have allowed beef imports, particularly frozen beef, to climb to levels that could trigger the 50 percent tariff.

Japan Meat Traders Association (JMTA) Executive Director Tatsuo Iwama said his organization’s 30 members are all concerned about the tariff increase. Beef dish prices in the food service industry would rise, and some beef items will be struck off menus and replaced by other food items, Iwama said. “Beef consumption would be affected,” he said.

JMTA members are striving to prevent the tariff hike by avoiding over importing, Iwama said. “Members individually report their monthly import figures, and we add them up so members can make appropriate (import volume) decisions,” he said.

Kiyoshi Tamura, manager at the 800-member Japan Food Service Association, echoed Iwama. Tamura offered an additional explanation for the import volume spike. “As it is expected the yen will continue to depreciate, traders increased their purchases before prices would rise,” he said.

Iwama concurred, saying everything hinges on the yen’s strength. “If the yen rises again, imported beef will again be considered a good deal and consumer demand will increase, necessitating cautious importing,” he said.

U.S. Meat Export Federation (USMEF) Japan Trade Projects and Technical Services Senior Director Susumu Harada said his office has been closely watching the situation by exchanging related information with Japanese importers/users as well as USMEF member packers.

Japanese importers would need to control their purchases of foreign beef, especially toward the end of this calendar year, Harada said. Buying typically increases during November as beef sellers prepare for year-end holidays. “Of course, price may affect the situation positively or negatively.” — Richard Smith, DTN Tokyo Correspondent

 

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