EU-Japan Trade Agreement Could Have Major Impacts on US Pork Trade
As two of the world’s biggest economies, the new trade agreement between the European Union and Japan could have major implications for the global market, and the US pork industry is no exception. The newly approved free trade agreement between the two is expected to come into effect by 2019 and would reduce or eliminate the current high tariffs Japan has on pork imports from Europe. This could mean that European pork could become significantly cheaper than American pork and make it more attractive for Japanese buyers.
How Could This Impact US Pork Exports?
The potential impact on US pork exports could be significant. Currently, the US is the biggest supplier of pork to Japan, with exports accounting for roughly 40% of Japan’s total imports. In addition, US pork accounts for more than half of Japan’s total frozen pork imports. With the new trade agreement in place, Japan could shift away from US pork in favor of European pork, as it becomes significantly cheaper. This could mean a loss of demand for US pork exports and lower prices as a result.
What Can US Pork Exporters Do to Prepare?
The US pork industry could be affected negatively by the new trade agreement, but there are some steps that exporters can take to prepare and potentially adapt. Exporters may want to consider diversifying their customer base to countries other than Japan and tap into new markets. Additionally, developing marketing and promotional strategies and enhancing their product offerings to make them more attractive to buyers than European pork could help as well. Companies could also consider negotiating lower costs with suppliers and improving efficiencies in their operations to maintain a competitive edge.
FAQs
Q: Could the EU-Japan trade agreement affect US pork exports to other countries?
A: The new trade agreement between the EU and Japan could have an effect on US pork exports beyond just Japan. As the European pork becomes cheaper to purchase than US pork, other countries may begin buying European pork instead of US pork, potentially resulting in a decrease in demand and prices for US exports.
Q: How can US exporters prepare for the new trade agreement?
A: US pork exporters can take steps to prepare for the new trade agreement by diversifying their customer base and tapping into new markets, developing promotional and marketing strategies, negotiating lower costs with suppliers, and improving efficiencies in their operations. Taking these measures could help maintain a competitive edge, even with European pork becoming cheaper.
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