Japanese consumers to reap TPP benefits over imported beef, kiwifruits

TOKYO (The Japan News/ANN) – The Trans-Pacific Partnership (TPP) trade deal came into effect last Sunday, slashing tariffs on a wide range of imported agricultural products that will likely bring cheer to the wallets of consumers in Japan through cheaper beef and other goods.

However, the domestic agriculture industry will face stiffened competition from cheaper imports, and it remains unclear if the TPP will lead to increased exports of automobiles and other Japan-made products.

Aeon Co, a major supermarket operator, held a special sale at about 400 of its stores earlier this month to publicise the benefits TPP would bring to shoppers.

“We’ve cut the price of Tasmanian beef before the TPP comes into effect,” read one sign displayed at the Aeon stores. From December 7, Aeon trimmed the price of two Australian beef products by up to 20 per cent during the sale. For example, sirloin steak, which previously cost about USD5.40, excluding tax, per 100 grammes, was reduced to about USD4.40.

Japan’s tariff on imported beef was slashed from 38.5 per cent to 27.5 per cent when the TPP came into force, and this will be lowered to nine per cent in the 16th year.

Signs are displayed announcing a price cut for Australian beef are displayed at an Aeon supermarket in Urayasu, Chiba Prefecture. – THE JAPAN NEWS/ANN

The tariff on imported Australian beef had already been lowered to 29.3 per cent for chilled beef under the Japan-Australia economic partnership agreement, but an Aeon official said the campaign aimed to boost sales of the meat.

“We want the TPP to become an opportunity for many people to readily try Australian beef,” the official said.

Sales of Australian beef at Aeon stores reportedly increased by about 20 per cent since the special campaign.

“It’s easy to afford at that price,” a 43-year-old company employee said as she shopped at an Aeon store in Urayasu, Chiba Prefecture. “I can put more beef on the table, not only on special days.”

 The TPP also cuts tariffs on several kinds of fruit. The 6.4 per cent tariff on kiwifruit has been immediately axed, which is estimated to bring a savings of several dozen yen on types of kiwifruit that retail for about USD9 for 10 of the fruits.

Nearly 80 per cent of kiwifruits available around Japan are grown in New Zealand. A spokesman for Zespri International (Japan) KK, the Japanese arm of Zespri International Ltd, which produces and sells kiwifruits from New Zealand, has high hopes for the TPP.

“We’ll figure out a price that is beneficial to both Japanese consumers and New Zealand kiwifruit growers,” the spokesperson said.

According to calculations by Chairman of the Research Institute of Economy, Trade and Industry Atsushi Nakajima, the reduction and elimination of tariffs under the TPP will cut household expenditures on food by about 1.5 per cent to two per cent in the first year and ultimately by about five per cent.

“The TPP could become a powerful ally of consumers,” Nakajima said. Meanwhile, it likely will take some time until the effects of the TPP start to appear in the food service industry.

 About 40 per cent of beef tongue imports come from TPP member nations such as Australia and New Zealand. The 12.8 per cent tariff on tongue will be halved in the first year of the TPP coming into effect and abolished in the 11th year.

However, an official at a beef tongue restaurant chain suggested that consumers should not expect prices to fall quickly.

“There are many unclear variables, such as the impact of exchange rates. Labour costs and other expenses aside from tariffs are increasing, so it’s rather hard to tell whether prices would drop,” the official said.

The increasing imports of cheap agricultural, forestry and fishery products will deal a heavy blow to Japanese farmers.

According to figures released in December 2017 by the Agriculture, Forestry and Fisheries Ministry, the TPP coming into force could slash the annual production value of Japan’s major farm, forestry and fishery products by up to about USD1.36 billion.