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EU farmers gain access to Japanese food and wine markets

BravissimoS/ThinkstockPhotos Hands covered in EU and Japanese flag shake hands.
EU and Japan reach draft trade deal.

by Jonathan Stearns

The European Union rushed to promote its preliminary free-trade agreement with Japan by stressing the benefits for EU farmers, who stand to gain easier access to the lucrative, highly protected Japanese food and wine markets.

A day after EU and Japanese leaders gave their blessing to the draft deal that would end 99 percent of tariffs between both sides, European Agriculture Commissioner Phil Hogan predicted a “substantial” increase in the bloc’s exports to Japan of cheese, pork, beef, wine and processed foods including chocolate and pasta. Such shipments are already worth 5.8 billion euros ($6.6 billion) a year.

“The access to the difficult market of Japan is largely going to be liberalized,” Hogan told reporters during an agriculture conference on Friday in Brussels. “It’s a growing, premium market for our high-quality food and drink products.”

The EU marketing offensive reflects a desire to win over European farmers, who are often skeptical about the merits of international trade deals, and to counter the anti-globalization forces that almost scuttled the bloc’s recent commercial pact with Canada. 

The new accord, the EU’s biggest to date, is part of a European push to shore up a global trade system that has been shaken by U.S. President Donald Trump’s protectionist bent. EU President Donald Tusk said on Thursday that “we in the European Union firmly believe in the political purpose of a world which is built on openness, cooperation and trade” and that “the world really doesn’t need to go 100 years back in time.” 

Under the deal between Brussels and Tokyo, 85 percent of EU agri-food exports to Japan will be liberalized, according to the European Commission, the 28-nation bloc’s executive arm. Japan plans to scrap or lower tariffs as high as 38.5 percent on a range of European foods and alcoholic drinks over 15 years, according to the commission, which aims for the accord to enter into force provisionally in 2019.

Following are the planned Japanese tariff cuts for EU agricultural products, according to the commission:

  • Hard cheese: 29.8 percent tariff to zero over 15 years
  • Soft and fresh cheese: 29.8 percent tariff becomes duty-free quota of 20,000 metric tons on day one and of 31,000 tons over 15 years
  • Milk powder, butter and whey: specific tariffs and quotas become tariff-rate quota of 15,000 tons in milk equivalent for skimmed milk powder and butter at reduced rate over five years; “almost” duty-free access for skimmed milk powder for feeding over five years; and tariff cut of 70 percent for whey over 10 years
  • Fresh, chilled, frozen pork: gate price and tariff system, with average tariff of 4.3 percent, becomes “practically free access” over 10 years
  • Processed pork: gate price and tariff system, with average tariff of 8.5 percent, becomes zero after 10 years
  • Beef: 38.5 percent tariff to 27.5 percent on day one and to 9 percent over 15 years
  • Processed foods such as pasta, chocolate: tariffs as high as 30 percent to zero over 10 years for the most important goods (and tariff-rate quotas for other products)
  • Wine and sparkling wine: 15 percent tariff to zero on day one
  • Sherry, vermouth, cider: 15 percent tariff to zero on day one

--With assistance from Ian Wishart.

To contact the reporter on this story: Jonathan Stearns in Brussels at [email protected]

To contact the editors responsible for this story: Alan Crawford at [email protected]

Richard Bravo, Ben Sills

© 2017 Bloomberg L.P

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