U.S. Could Lose Out Billions in Dairy Exports to Japan
New trade agreements between Japan and other countries could put the U.S. dairy industry at a severe competitive disadvantage, losing hundreds of millions in sales per year over the next two decades.
The estimates come as a result of study done by Meros Consulting, a Tokyo-based company, for the U.S. Dairy Export Council (USDEC). Japan is the fourth largest dairy export destination for U.S. dairy products. The new trade agreements with Australia, New Zealand and the European Union could deprive the U.S. of $5.4 billion in sales over the next 21 years as these agreements fully mature, estimates Meros.
With a level playing field, the U.S. could double its market share. But without new agreements, the U.S. share of exports to Japan could be cut in half over the next decade.
“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,” says Tom Vilsack, USDEC 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.”
USDEC officials say 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, a toll that climbs to $5.4 billion once the CPTPP and Japan-EU agreements are fully implemented, they say.