In this file:
· Fast Trade Agreement with Japan Essential for U.S. Pork Producers
· Canadian pork exports to Japan catching up to the United States under CPTPP
Fast Trade Agreement with Japan Essential for U.S. Pork Producers
Maria Zieba, NPPC
via FarmJournal's Pork - May 7, 2019
U.S. pork producers are suffering significant financial harm from punitive tariffs levied on U.S. pork exports by China and Mexico in retaliation for U.S. actions on steel and aluminum and China’s trade practices. But an even bigger trade problem looms large. Key global competitors have negotiated and implemented trade agreements with Japan and the U.S. already is losing market share in its most important export market.
Japan is the largest value market and second largest volume market for U.S. pork exports. Last year, the U.S. exported $1.6 billion in sales of pork to the country. Since 1993, U.S. pork sales to Japan have more than quadrupled to more than 394,301 metric tons last year. With a population of nearly 127 million people and as the third-largest economy in the world, the Japanese market is critical to U.S. pork producers.
The National Pork Producers Council was arguably the most aggressive and engaged private sector group during the TransPacific Partnership (TPP) negotiations. NPPC’s efforts paid off, as Japan and the other TPP nations agreed to a fantastic package on pork.
However, the great irony is that U.S. pork producers now are standing on the sidelines watching as their competitors in Canada, Chile, the EU and Mexico get the benefit of the deal on pork that the U. S. negotiated. That is because the U.S. pork industry’s biggest competitors have recently entered into trade agreements with Japan, which includes the European Union-Japan Economic Partnership Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Due to these other trade agreements, the U.S. is already losing sales to Japan—12% losses in value this year according to the latest figures--and those losses will only continue if a trade agreement between the two nations is not expeditiously negotiated and implemented.
NPPC anticipated these ramifications...
Canadian pork exports to Japan catching up to the United States under CPTPP
Naomi Powell, Canada.com
May 7, 2019
Canadian pork exports to Japan are closing in on those of the United States as homegrown producers race to take advantage of a new Asia-Pacific trade deal abandoned by the U.S. in 2017.
Canadian shipments of chilled pork meat to Japan hit 14,403 tonnes in February, the second month the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was in effect, according to Japanese customs clearance data. The figure marks a 122 per cent increase compared to the same month a year ago and places Canada just behind the U.S. total of 14,599 tonnes.
“The U.S. pulling out of the CPTPP is certainly one of the reasons we have had this chance to get ahead,” said Martin Lavoie, chief executive of Canada Pork International. “This has been a major opportunity and I think you will see the numbers jumping even more shortly.”
One of U.S. President Donald Trump’s first moves following his inauguration in 2017 was to withdraw from the Trans-Pacific Partnership — the signature trade policy of former president Barack Obama. Representing about 40 per cent of the world economy, supporters of the now-defunct TPP had hoped it would create a bloc to counter China’s economic might in the region.
Instead, the remaining 11 countries entered into the revised CPTPP, prompting economists to warn that the preferential tariff treatment the bloc enjoyed would threaten the market share of American producers.
“It certainly has hurt the U.S. in the short term, I think that’s fairly evident,” said Ted Bilyea, special adviser to the Canadian Agri-Food Policy Institute. “Whether that will be a medium- or long-term problem for them is the question right now.”
Rising Canadian beef exports have taken an early spotlight, tripling to 3,545 tonnes in January 2019, according to Japanese import data, as tariffs fell to an initial 27.5 per cent from the standard rate of 38.5 per cent.
Canadian pork exports have been making gains too, though the tariff advantage is less dramatic. Japanese levies on pork fell by half to an initial 2.25 per cent, but they will gradually be phased out altogether.
Though the expansion in access for pork producers may be more modest, Canadian exporters have been aggressively exploiting it to gain a bigger foothold in the lucrative Japanese market, the largest for Canada by value and the third largest by volume.
Companies such as Quebec-based Olymel LP have been retooling operations to produce the higher-value chilled pork favoured by Japanese consumers, Lavoie said, adding that Costco Wholesale Corp.’s 26 stores in Japan have now switched to 100-per-cent Canadian chilled pork.
“It’s important for Canada because Japan is a unique market that can afford to pay for quality,” Bilyea said. “There’s a fair bit of value still to be had in these tariffs.”
Industry leaders have cautioned that the CPPTP is still in its early days and trade fluctuations due to seasonality and other market factors can occur. Indeed, Japanese imports of Canadian beef slipped to 2,455 tonnes in February, suggesting “importers held back product until the CPTPP came into force in January to get the lower tariffs,” according to the Canadian Cattleman’s Association.
Nevertheless, Canadian Prime Minister Justin Trudeau and Japanese Prime Minister Shinzo Abe touted the benefits of the deal last week, with Trudeau noting that Canadian beef exporters had enjoyed a surge in shipments to Japan, “while the Americans do not have that kind of access.” The deal, he said, stood in “stark contrast” to rising protectionism in the U.S.
Canadian pork exports are expected to increase by $639 million or 36.2 per cent...