USDA trade undersecretary Ted McKinney speaks at Ag Outlook Forum USDA Photo by Preston Keres
USDA Under Secretary of Trade and Foreign Agriculture Affairs Ted McKinney speaks at the USDA Agricultural Outlook Forum on Feb. 23, 2018.

McKinney travels to Japan for trade mission

Ag businesses and government leaders embark on drumming up ag exports June 11-15.

U.S. Department of Agriculture undersecretary for trade and foreign agricultural affairs Ted McKinney will lead a trade mission to Japan June 11-15, joined by numerous U.S. business and state government leaders seeking to expand export opportunities for U.S. food and agricultural products.

“Japan is already a top market for U.S. farm and food products, but there are many new opportunities still waiting to be tapped there,” McKinney said. “Japan is an import-dependent economy and its 130 million consumers have a real affinity for U.S. food products because of their quality, affordability and safety. I’m eager to return to Japan and continue exploring all the ways we can grow U.S. agricultural exports there.”

This is McKinney’s first trade mission to Japan. He previously traveled to Tokyo in March for FOODEX, Asia’s largest food and beverage trade show.

Participants include leaders from the local departments of agriculture of American Samoa, Arizona, California, Colorado, Hawaii, Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, Wyoming, Utah, Washington and Oregon, as well as representatives from the following companies and organizations including the U.S. Grains Council, U.S. Soybean Export Council, United Dairymen of Arizona and Alltech.

There is an array of opportunities for U.S. agricultural exporters in Japan, though its unique culture and regulatory environment present challenges. Japan is the world’s fourth largest importer of agricultural goods and ran a $47 billion trade deficit with the world in 2017, including a $12 billion agricultural trade deficit with the United States.

Despite being a primary net importer of agricultural products, Japan maintains high tariffs, restrictive and complex safeguards, and technical barriers to trade. Additionally, the United States will face challenges in the Japanese market as U.S. competitors are gaining preferential access for several key commodities, according to an international agricultural trade report on Japan from the Foreign Agricultural Service.

Japan and Australia have a trade deal which lowers tariffs on imports of key products from Australia, while Japan and the EU have concluded a free trade agreement which will take effect in 2019. Additionally, the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) threatens to cut into U.S. market share and depress profits for U.S. agricultural exporters by granting preferential access to Canada, Mexico, New Zealand and other international competitors.

Canada is expected to gain preferential access to Japanese wheat and pork markets, while New Zealand will receive improved dairy access to Japan through partial tariff reductions and duty-free quotas. Mexico is also expected to enjoy tariff eliminations on fresh fruit to the Japanese market. “Despite the increased competition Japan remains dependent on imports and has a historical preference for many U.S. products due to high quality, timely deliveries, and brand recognition. U.S. suppliers may have to work harder, but Japan is expected to remain a top five U.S. market destination for many years to come,” FAS wrote.

Japan is the largest export market for U.S. beef and beef products. In 2017, the United States shipped almost $1.9 billion of beef and beef products to Japan, accounting for 26% of all U.S. beef and beef products exports. The United States is Japan’s largest supplier of beef and beef products by value with a market share of 48% in 2017.

In 2017, Japan ranked as the largest global importer of pork and pork products. Japanese pork imports from the world grew 6%, from $4.9 billion in 2016 to $5.2 billion in 2017. Japan is highly protective of its pork industry and has excluded pork completely or included only provided minor tariff reductions and small tariff-rate quotas in previous bilateral trade agreements. However, the Japan-EU agreement marks a change with Japan eliminating tariffs on more than 60% of its pork and pork product tariff lines within 12 years.

Japan is the second largest export market for U.S. corn in the world. With a 63% market share, the United States is the largest soybean supplier to Japan with exports totaling $976 million in 2017. The United States is the largest supplier of wheat to Japan, enjoying a market share of 48%.

For more, read the full report here

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