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225 food and agricultural companies and associations, including the National Cattlemen’s Beef Association (NCBA), sent a letter April 11 to members of Congress calling for a swift vote on the Trans Pacific Partnership. NCBA President Tracy Brunner says cattle producers cannot wait any longer to level the playing field.
“Japan is our largest export market and our Japanese customers demand high quality U.S. beef,” said Brunner. “However, due to the Australia-Japan Economic Partnership Agreement, U.S. beef faces a tariff that is 11 percent higher than Australian beef, our leading competitor. That tax alone makes our beef less competitive and gives Australia’s beef producers a significant advantage that has allowed them to capture over $100 million in additional beef sales at the expense of U.S. producers.”
With the implementation of the Australia-Japan Economic Partnership Agreement in early 2015, the tariff rate on Australian beef exports to Japan immediately dropped from 38.5 percent to 28.5 percent. On April 1, 2016, that tariff again dropped to 27.5 percent and will continue to decrease every April until the tariff rate hits 19 percent in 2031.
“On April 1, Australian beef producers got a tax break on beef exports to Japan and we paid for it in lost sales,” said Brunner. “We know Japanese consumers want U.S. beef, but just like domestic consumers, they make their buying decision based on price and appearance. Until we level the playing field through TPP, U.S. beef is going to be at an economic disadvantage in Japan. That is why we cannot afford to delay passage of TPP; every day costs our producers real money.”
Upon implementation of TPP the tariff rate on U.S. beef into will immediately drop from 38.5 percent to 27.5 percent. Moreover, that rate will continue to decrease over the following 16 years until it settles at 9 percent.
“TPP is a great agreement for U.S. beef producers and rural America,” said Brunner. “Trade supports U.S. jobs, commodity prices, and the next generation of U.S. beef producers. We are pleased to join with other food and agricultural groups in calling on Congress to pass TPP this Congressional session.”