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EU-Japan look to free trade opportunity

By Carmen Paun and Wang Fangqing , 31-Jul-2012

EU-Japan look to free trade opportunity

A planned free trade agreement (FTA) between the European Union (EU) and Japan could end the Japanese BSE-linked ban on EU beef and veal imports, say industry representatives.

The European Commission has asked the EU’s 27 member states for a mandate to start negotiations with Japan by the end of the year, and these will cover non-tariff issues such as sanitary and phytosanitary rules as well as duties.

“Until now, Japan allows neither veal and beef nor lamb originating in the EU, due to BSE protection rules and despite World Organization for Animal Health (OIE) recommendations,” said European Livestock and Meat Trading Union (UEBCV) secretary general Jean-Luc Mériaux. “The EU meat industry hopes Japan will soon lift the ban as the country did it already for Canada and the USA.”

According to Mériaux, EU veal exports to Japan could be popular following an FTA. “Veal is a high added-value product which could find a niche market in Japan. The EU is the largest world veal producer and will be able to meet the Japanese needs,” he explained.

Pigmeat is another area with great potential. According to data provided to GlobalMeatNews by the UECBV, the EU exported 231,000 pork carcase weight equivalents (CWE) to Japan, worth €786m in 2011, with exports coming from Denmark, Italy and elsewhere. Japan also imports small quantities of EU foie gras.

However, “during the past 10 years, for the EU-27, the pigmeat market share in Japan decreased from around 35% down to 22%”, said Mériaux. This is due to the fierce competition from Canada, Chile, Mexico and the USA, he said.

Mériaux believes that an FTA between the EU and Japan, similar to the one already agreed between the EU and South Korea, would improve EU producers’ Japan market share for many types of meat, slashing the level of Japanese import duties.

“We’re also looking at currently high tariffs on the Japanese market”, said Helene Banner, European Commission trade spokesperson. “Most of meat products have tariffs of well over 100%.”

Japanese meat exporters are also keen to exploit a free trade deal to get a foothold in the EU meat market, from which it is currently excluded (except for casings and pet food). “If the EU could cut the tariff significantly, it no doubt would help us sell more meat in the region. We believe it would bring us more business opportunities,” said Tatsuo Iwama, executive director at Tokyo-based Japan Meat Traders Association, whose members include the country’s leading trading companies, such as Itochu and Marubeni. The negotiations are coming at the right time as Japanese meat exporters have been working hard to break into the European market, said Iwama.

“The EU has very strict rules on hygiene, which requires some specific equipment during meat processing. However, Japanese manufacturers have recently been investing in the facilities and hopefully to sell beef and chicken to European countries in the near future,” added Iwama.

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