Media Statement

31 July 2003

Increase in Japanese beef tariff not justified

Trade Negotiations Minister Jim Sutton has expressed concern at Japan's action in raising tariffs on imported beef despite strong opposition from New Zealand and other beef exporting countries.

"This is an unwarranted move", the Minister said from Montreal where he has been attending a meeting of trade ministers.

Under Japan's Temporary Tariff Measures Law, tariffs on imported beef have risen from 38.5% to 50% as a result of imports exceeding a threshold compared to the previous year. This "snapback" safeguard provision was part of the WTO Uruguay Round agreement and is meant to protect Japan's domestic agricultural industry from sudden surges in imports. The increased tariff will be applied until 31 March 2004.

"The increase in Japan's beef imports reflects the recovery in beef consumption following the 2001 BSE outbreak in Japan. The volume of imported beef is in fact only returning to levels that existed prior to the BSE scare. This is quite contrary to the original intention of the safeguard measure".

"This action will only serve to further disrupt market conditions to the detriment of exporters and consumers alike".

Mr Sutton said it was significant that the Japan Food Services Association had lobbied the Japanese Government strongly against the safeguard and had worked closely with representatives of beef exporters in this process.

"New Zealand has taken every opportunity to dissuade the Japanese Government from raising beef tariffs. I have raised the issue with Japan's Trade and Agriculture Ministers on a number of occasions".

Mr Sutton said that Japan's action sent the wrong message to WTO members as they grappled with the need to move the Doha Round of trade negotiations forward in the lead up to the Ministerial meeting in Cancun Mexico.

"I have expressed my concern regarding Japan's action to my Japanese counterpart here in Montreal", Mr Sutton said.

Japan is New Zealand' fifth largest market for beef exports. Exports of chilled and frozen product totalled more than $70.8 million for the year ending December 2002 ? a decrease of more than 34 percent over the previous 12 months, reflecting the drop in beef consumption in the wake of the 2001 BSE outbreak. Grain-fed marbled beef dominates Japan's beef market, but New Zealand has established a niche market for lean grass-fed beef.

ENDS

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