Study: Competitor trade agreements could threaten U.S. dairy exports to Japan
Without swift, effective action to secure a strong trade treaty with Japan that exceeds Japan’s agreements with other countries/regions, the United States could see market share drop in half over the next decade.
A study released on Jan. 30 by the Arlington, Va.-based U.S. Dairy Export Council (USDEC) projects new trade agreements between Japan and other countries will put U.S. dairy exports at a competitive disadvantage, resulting in lost U.S. sales of $5.4 billion over 21 years.
The Japanese dairy market, the fourth-largest export destination for U.S. dairy exports, is expected to continue to grow in years to come. With a level playing field, the United States could roughly double its market share, USDEC said, citing the study, which was conducted by Tokyo-based Meros Consulting. However, without swift and effective action by the United States to secure a strong trade treaty with Japan that exceeds Japan’s agreements with Australia, New Zealand and the European Union, the United States could see its market share drop in half over the next decade.
Australia and New Zealand have the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in place with Japan already, and as of this Friday, Europe’s agreement with Japan will take effect, too. Without a strong U.S.-Japan trade treaty, competitors will seize a cumulative $1.3 billion in dairy sales over the next decade that would otherwise have been supplied from the United States, USDEC said, a toll that climbs to $5.4 billion once CPTPP and the Japan-EU agreements are fully implemented.
“These agreements will give our competition a significant economic advantage that will enable them to increase their market share in Japan, costing the U.S. dairy industry billions of dollars in lost sales,” said Tom Vilsack, USDEC’s president and CEO. “U.S. dairy farmers and processors strongly support the administration’s launch of trade talks with Japan. We hope this report provides fresh ammunition to our negotiators about why a strong U.S.-Japan agreement is so important for American agriculture.”
Jim Mulhern, president and CEO of National Milk Producers Federation, Arlington, Va., noted that U.S. dairy farmers are currently enduring economic hardships, and expanded overseas opportunities are the best ways to counter those hardships.
“A trade deal with Japan that significantly expands dairy access would make 2019 a brighter year,” he said.
To read the full report, click here.