New US-Japan Safeguard Trigger Deal to Give Beef Exporters More 'Certainty,' USTR Says
The U.S. and Japan will raise the beef safeguard trigger level under the two countries’ trade deal, reducing the possibility that U.S. beef exporters will face higher tariffs when shipping to Japan, the Office of the U.S. Trade Representative said March 24. The deal now requires three separate triggers to be met before Japan can raise tariffs on imports of U.S. beef, giving U.S. exporters more “certainty” when trading with Japan, a senior USTR official said.
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“It removes a lot of that uncertainty that existed when we had only the single trigger mechanism,” the official said during a March 23 call with reporters. The U.S. and Japan haven’t yet decided on an effective date for the new requirement, which still needs to be approved by the Japanese Diet.
Under the agreement, Japan would be able to raise tariffs on U.S. beef only if several conditions are met, including if the imports exceed the original beef safeguard trigger level under the U.S.-Japan Trade Agreement, and if the “aggregate volume” of beef imports from the U.S. and the original signatories of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership exceed the CPTPP beef safeguard. A third condition requires beef imports from the U.S. to exceed the total amount from the previous year, USTR said. The triggers will reset at the start of each Japanese fiscal year.
The two sides began talks to expand the trigger requirements after U.S. beef exports surpassed the safeguard level in March 2021, the final month of Japan’s fiscal year, the senior USTR official said. U.S. beef exporters during that month faced a duty increase from 25.8% to 38.5%, the official said.
Because of the new triggers, USTR doesn’t expect to hit the safeguard trigger volume this year. “From year to year there can be some very slight variability” in trade, the official said, “and the triple-trigger mechanism really decreases the likelihood that the safeguard duty would be imposed.”
The agency also doesn’t expect the new agreement to affect the quantity of U.S. beef exports to Japan, which it said will depend mostly on consumer demand. “We don't anticipate a major shift in exports associated with this agreement,” the official said. “It's really just providing greater certainty for traders.”
But USTR said it’s seeing increasing Japanese demand for beef and hopes U.S. exporters can continue to capitalize on the market. USTR Katherine Tai said the deal will ensure “farmers and ranchers can continue to meet Japan’s growing demand for high-quality U.S. beef.”