New trade agreements between Japan and other countries will result in lost sales of $5.4 billion over 21 years for U.S. dairy exports, according to a study released Jan. 30, 2019, by the U.S. Dairy Export Council.
The Japanese dairy market is the fourth largest export destination for U.S. dairy products. With a level playing field, the U.S. could double its market share, according to a study conducted by Tokyo-based Meros Consulting.
However, without action by the U.S. to secure a strong trade treaty with Japan that exceeds Japan’s agreements with Australia, New Zealand and the European Union, the U.S. 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 in place with Japan and Europe’s agreement with Japan takes effect Feb. 1. The CPTPP is a free-trade agreement between Canada and 10 countries in the Asia-Pacific region: Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Once fully implemented, the 11 countries will form a trading bloc representing 495 million consumers and 13.5% of global GDP.
The EU-Japan Economic Partnership Agreement removes trade barriers between the two countries.
"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."
"U.S. dairy farmers are facing economic hardships, and expanding opportunities overseas is the best way to counter that," said National Milk Producers Federation President and CEO Jim Mulhern. "A trade deal with Japan that significantly expands dairy access would make 2019 a brighter year.
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