A study released Jan. 30 by the U.S. Dairy Export Council projects that new trade agreements between Japan and other countries will put U.S. dairy exports at a competitive disadvantage, resulting in lost U.S. sales of $5.4 billion over 21 years.
The Japanese dairy market, the fourth-largest export destination for U.S. dairy exports, is expected to continue to grow in years to come. With a level playing field, the U.S. could roughly double its market share, according to the study, which was conducted by Tokyo-based Meros Consulting.
However, without swift and effective 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 already, and as of this Feb. 1, 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 U.S., a toll that climbs to $5.4 billion once the CPTPP and Japan-EU agreements are fully implemented.
“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 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 Jim Mulhern, president and CEO of the National Milk Producers Federation. “A trade deal with Japan that significantly expands dairy access would make 2019 a brighter year.”