WASHINGTON, March 25 (Reuters) - The United States and Japan on Thursday announced an agreement that will allow American farmers and ranchers to meet Japan’s growing demand for U.S. beef, and lowers the chances of Japan imposing higher tariffs in future, U.S. officials said.
The agreement includes a new mechanism that requires three separate conditions to be reached - instead of just one - in order for Japan to invoke a “safeguard trigger” and slap higher duties on U.S. beef for 30 days.
“This agreement is a great win for our two countries that ensures American farmers and ranchers can continue to meet Japan’s growing demand for high-quality U.S. beef,” U.S. Trade Representative Katherine Tai said in a statement.
The agreement, reached after a year of consultations between the two countries, will enter into force once the text is finalized, and each country has completed a few remaining steps, a senior U.S. official said.
U.S. Agriculture Secretary Tom Vilsack welcomed the agreement and said it would allow for greater market-based growth in U.S. beef exports to Japan.
In 2021, the United States was the top beef exporting country in the world, with global sales of beef and beef products valued at more than $10 billion, according to U.S. data.
Exports of U.S. beef to Japan totaled almost $2.4 billion in 2021.
U.S. meat producers had pushed for an adjustment to the thresholds, arguing that U.S. beef was at a competitive disadvantage to exporters who are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Japan raised its “safeguard” duty on U.S. beef to 38.5% from 25.8% in March 2021 for 30 days, after U.S. beef imports reached 253,051 metric tons, exceeding the 242,000 metric ton trigger level. Demand for U.S. beef had risen in that period as a drought slowed imports from Australia.
U.S. beef is currently entering Japan at the normal 25% duty level negotiated in the agreement for Japan’s fiscal year 2021, which ends on March 31, and no higher temporary duties were expected in the current fiscal year, the senior official said.
The three-trigger system removes uncertainty for U.S. exporters even if there are shifts in market availability from various countries during a given year, a senior official said.