After a year's worth of deliberations with Japanese officials, the NCBA is extremely disappointed in Japan's decision to increase tariffs on U.S. chilled beef imports to 50 percent from 38.5 percent effective August 1.

This increase in tariffs comes from a "safeguard measure," which was originally put in place to protect Japanese beef producers from injury due to a sudden surge in imports. The safeguard is designed so that if current year, quarterly imports of fresh/chilled and/or frozen beef (separately) increase more than 17 percent compared to the same quarter of the previous year, Japan's current 38.5 percent tariff on imported product may increase to 50 percent on all imported beef to protect the domestic industry.

"This is a misguided use of international trade safeguard measures," exclaims NCBA Chief Economist Gregg Doud. "Last year's supposed jump in imports is being compared to a time when a BSE outbreak in Japan destroyed consumer confidence in beef."

Consumer confidence in beef consumption collapsed after the September 10, 2001 discovery of BSE in Japan.

"Japanese beef imports have been slow to recover and are finally returning to normal levels." explains Doud. "This unforeseen circumstance could not have been anticipated when these safeguard measures were designed, and the U.S. had no control over the discovery of BSE in Japan. We're now being penalized for our investment in rebuilding Japan's beef demand."

NCBA has worked closely with USDA and industry sources to obtain funding so that the U.S. Meat Export Federation (USMEF) could aggressively pursue efforts to regain confidence among Japanese consumers about the safety and wholesomeness of all beef (domestic as well as imported). The U.S. beef industry and the U.S. government collectively invested nearly $9 million to restore demand in the Japanese beef market.

Japan historically represents the top U.S. export market for beef and beef variety meats. However, the U.S. exported only 332,000 metric tons (down 35 percent) valued at $1 billion dollars (down 36 percent) of beef and beef variety meats to Japan in 2002.

Imports had been on the rise. However, in 2002, the "mad-cow" disease scare led to a sudden drop in consumption of all beef products. Immediately following the discovery of BSE in Japan, there was a 60 percent drop in retail sales of beef and beef product, and a 50 percent drop in beef consumption in restaurants/food service establishments.

"To impose these high tariffs will harm both U.S. beef producers as well as a wide range of Japanese consumers," says Doud. "The unnecessary increase in the price of beef to Japanese consumers will be of no net benefit to Japanese beef producers and will negate important progress in mutually beneficial trade between our nations."

On August 14, 2002, NCBA sent a letter urging the U.S. government to negotiate with Japan to gain a one-time waiver in the beef safeguard, or at a minimum to have them use a multiple year average of imports instead of last year's BSE-devastated market as the basis for comparison.

"Regardless of all of our discussions with Japan, they have still decided to implement this extremely high tariff," says Keys. "We are very disappointed with this decision, and believe this tariff needs to be reduced significantly during WTO negotiations."

NCBA strongly supports the U.S. proposal for market access at the WTO agricultural negotiations that would eventually eliminate Japan's safeguard mechanism. (c) ©