Photo/Illutration A chunk of wagyu, Japan's domestically produced beef. Export expansion of wagyu, including to the United States, has partly met the demand from overseas Japanese meat lovers who cannot visit Japan due to the pandemic. (Asahi Shimbun file photo)

Signs are growing that the Japan-U.S. trade agreement that took effect two years ago is failing to live up to the huge economic benefits for Japan promised by the administration of then Prime Minister Shinzo Abe.

The Abe administration claimed that the trade deal had effectively accomplished a 300-fold increase in the low-tariff quota for Japanese beef exports to the United States.

But the claim has proved to be ill-founded. The government should take responsibility for its ad hoc and misleading description of the agreement. It should admit its gross error in estimating the effects of the deal and take steps to rectify its mistake.

Tokyo and Washington worked out the trade pact after the U.S. administration of President Donald Trump withdrew from the Trans-Pacific Partnership (TPP) multilateral trade agreement. The Abe administration touted the bilateral deal as “a well-balanced and win-win agreement for Japan and the United States” during Diet deliberations on the accord.

The low-tariff annual quota for Japanese beef exports to the United States used to be 200 tons. Under the TPP, it would have been expanded to 3,000 tons as a first step.

The Japan-U.S. agreement scrapped the quota for Japan and instead opened a low-tariff quota of up to 65,000 tons for multiple nations including Japanese beef.

The government said this quota would effectively be for Japanese beef because there was no serious competition, claiming the agreement had secured a preferred quota for Japanese beef 300 times larger than the old one.

This year, the third year of the agreement, however, the quota was filled in less than three months. As a result, Japanese low-tariff beef exports to the U.S. market in 2022 are projected to be around 300 tons.

The unexpected development was caused by a surge in U.S. beef imports from Brazil, which had been suspended due mainly to inspection irregularities. The situation is likely to remain more or less the same for years to come.

Brazil is one of the world's largest beef producers. It was quite predictable the country would emerge as a major beef supplier for the American market once the problems with its inspection system were fixed.

Clearly, the Japanese government made a mistake when it agreed to the proposal to subject Japanese beef exports to the quota for multiple nations instead of negotiating an expansion for the nation-specific quota for Japan.

The bilateral trade agreement has lowered Japanese tariffs on U.S. beef and pork, which were Washington’s priority target, to levels under the TPP but does not include the elimination of U.S. tariffs on auto imports from Japan, which was part of the multilateral pact.

Asahi Shimbun editorials repeatedly pointed out the bilateral deal was unfair to Japan and could fail to meet the World Trade Organization’s rules concerning the elimination of tariffs through trade agreements.

Abe trumpeted the beef quota deal as a major achievement, but it has turned out to be a false hope. This is outrageous. To make amends for the ill-advised decision, the government needs to renegotiate with the U.S. administration the agreement on the low-tariff quota for Japanese beef exports.

Beef is a key export item for the government’s strategy for ramping up Japan’s agricultural exports. The farm ministry has been promoting the expansion of domestic beef production with a subsidies program.

But Japan’s talks with China for the removal of Beijing’s ban on beef imports from Japan have bogged down. This is a heavy blow to the strategy because China was expected to become the largest overseas market for Japanese beef.

If beef exports to the United States also fail to grow as expected, the program to stimulate the growth of domestic beef production could lead to a glut.

The farm ministry should reassess demand for Japanese beef at home and abroad and review its plan to expand production accordingly.

--The Asahi Shimbun, April 19

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