When approved, the US-Japan Trade Agreement will deliver lower tariffs for U.S. citrus and other agricultural commodities.
For oranges, Joel Nelsen, strategic adviser for the Exeter-based California Citrus Mutual, said tariffs — now at 32% — will be phased out over a seven-year period.
“As soon as the Japanese diet (a group of lawmakers) approves the treaty, we go from 32% down to 25%,” Nelsen said. In April 2020, the tariff will be knocked down another 5% to 20%.
Nelsen said exporters are hoping the Japanese government approves the deal before the first of the year, because that will mean all fruit landing in Japan in January, February, and March will be 5% cheaper.
“That makes us a little bit more competitive,” he said. “Not that we can capture lost market share this fast — it is going to take a few years because we’ve lost about 20% of our market share.”
Members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam — have taken some market share from the U.S. in Japan, Nelsen said. The U.S. pulled out of the Trans-Pacific Partnership — an earlier version of CPTPP — when President Trump was elected.
A fact sheet on the US-Japan Trade Agreement is available online from the U.S. Trade Representative website:
The USTR said the deal will:
- When implemented, over 90% of U.S. food and agricultural products imported into Japan will either be duty-free or receive preferential tariff access.
- Immediately eliminate tariffs for almonds, walnuts, blueberries, cranberries, sweet corn, broccoli, and other commodities;
- Provide staged tariff elimination for products such as cheeses, wine, frozen potatoes, oranges, fresh cherries, egg products, and tomato paste.
- The agreement allows for limited use of safeguards by Japan for surges in imports of beef, oranges, and other items. Those safeguards will be phased out over time, according to the USTR.