BEEF exports to Japan may have boomed during the past year but producers soon could find themselves a victim of their own success.
The trade with Japan has been strong in the past 12 months, in part because of the mad cow disease scare in that country, but also due to an intensive promotional campaign valued at $16 million, including $5 million from the Federal Government.
However, acting Agriculture Minister, Senator Ian Macdonald, has expressed concern that Japan may be planning to increase tariffs on Australian beef imports.
As part of the Uruguay Round agreement, Japan has the option to increase its tariff on imported beef from the current 38.5 per cent to 50 per cent if imports rise to 117 per cent of the level for the same period in the previous year.
Senator Macdonald said the efforts of Australia and other countries exporting to Japan might be for nothing if a tariff increase was triggered by exports returning to their pre-BSE levels.
WA Farmers Federation meat section president Mike Norton said any tariff would have negligible effect on WA producers, who were involved primarily in the live cattle export trade. Although Harvey producer EG Green & Sons had picked up a Japanese order within the past year, meat for export to Japan came chiefly from feedlots in the eastern States, he said.
Trade Minister Mark Vaile said any increase in tariffs would penalise Japanese consumers and producers.
He said the Japanese had the ability to remove the safeguards that allowed them to ramp up their tariffs.
“Japan’s Minister for Agriculture, Forestry and Fisheries, Tadamori Oshima, claims he is bound by the rules to implement the safeguard,” Mr Vaile said. “This is not correct.
“The World Trade Organisation [GATT] agreement provides the option of imposing the safeguard or not and Japan’s domestic legislative process also provides that option.”
He said an ABARE study commissioned by Meat and Livestock Australia showed that the gross consumer cost of invoking the safeguard out-weighed the benefits to Japanese producers by more than two to one.
According to ABARE, the safeguard would lead to a gross consumer cost of 31 billion yen compared with a gross producer gain of only 14 billion yen.
“We believe that the recovery in beef demand will result in higher returns for Japanese beef producers, despite rising imports,” Mr Vaile said.
“Ultimately, Japanese consumers will pay for any tariff increase, and that could lead to a slump in demand for beef that would hurt Japan’s own industry.”
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