Business

Japan TPP offer chops beef tariffs to 9% over 15 years

Kyodo

Japan has proposed during negotiations with the United States to slash its 38.5 percent tariff in imported beef to 9 percent over 15 years under an envisioned Pacific Rim free trade deal, negotiation sources said Thursday.

Tokyo also called for a safeguard measure that allows it to raise tariffs back to 20 percent if U.S. beef imports surge under the Trans-Pacific Partnership initiative, the sources said.

Japan offered the concession in response to strident calls from the United States to open its agricultural market. If the two sides can settle the issue, it will provide crucial momentum for concluding the broader 12-country negotiations.

Tokyo and Washington have struggled to bridge differences over how drastically Tokyo should cut tariffs on its “sacred” five farm product categories — rice, wheat, beef and pork, dairy and sugar — which have long held up the broader negotiations. Talks on beef have been one of the biggest sticking points. Another is Japan’s automobile market.

Chief negotiators from all the member countries began a fresh round of negotiations in New York on Monday, with Japan and the United States set to resume bilateral talks next week on market access for farm products. U.S. Trade Representative Michael Froman expressed hope recently that all 12 negotiating members will be able to reach a conclusion in the next “small number of months.”

According to the sources, Japan wants to introduce a safeguard system that would allow it to raise tariffs on U.S. beef back to 20 percent when they are set at between 20 percent and 9 percent under the TPP. Tokyo could raise its tariffs all the way back to 38.5 percent during a period in which it lowers duties from the current level to 20 percent incrementally.

The proposed safeguard measure would be in place when U.S. beef imports exceed certain levels. Japan wants to set the threshold at near the current import volume.

Some of the Japanese tariff rates that were agreed upon in bilateral talks with the United States are expected to be applied to other TPP countries, too.

Under the Japan-Australia free trade agreement that took effect on Jan. 15, Japan will cut its tariffs on Australian beef by up to half from the current 38.5 percent. But Australia, also part of the TPP talks, would also enjoy the lower tariff rate of 9 percent once the TPP is formed.

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