ST. LOUIS, Mo. — Pork industry groups last week urged representatives negotiating the Transpacific Partnership (TPP) to push Japan to trim pork import tariffs. But shaving down Japan’s pork and beef tariffs still eludes TPP negotiators. 

Japan’s current offer to TPP partners – Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam – demands an exemption for tariffs to remain on certain “sensitive” agricultural products, including pork and beef. Japan is the world’s largest pork importer and is second to the U.S. in beef imported by value. 

The TPP seeks to expand trade in the Pacific Rim region. The latest round of negotiations ended last week in Hanoi, Vietnam. The global pork industry urged negotiators to reject the current Japanese offer, which retains the tariff structure.

“It is impossible to rationalize a TPP outcome that would allow a highly developed nation such as Japan to avoid undertaking commitments to full tariff liberalization for products such as pork,” wrote pork industry groups from Chile, Peru, Australia, Mexico and the U.S. “We call on each of our governments to redouble their efforts to move Japan away from this untenable position,” said the groups, including the National Pork Producers Council.

Tariffs on imported beef and pork make Japanese meat prices high in comparison to many western countries. Japanese households paid the equivalent of $7.33 per pound of bacon in 2013 – almost 40 percent more than U.S. customers paid. The beef price differential is greater; in 2013, the average Japanese household paid an equivalent of $13 per pound compared to about $5 in the U.S., according to data in a USDA Tokyo attaché report in August.

Part of the difference, to be sure, is Japan’s higher average food cost and consumers’ willingness to pay for very high quality meat. But Japan’s tariffs and “gate prices” seem designed to keep imported meat prices up so that domestic hog and cattle farms might receive prices allowing a profit. Because of its distance from cheaper sources of animal feed, Japan cannot produce red meat as efficiently as can the U.S., Mexico and Australia.

So Japan imposes fees on imported products like pork and beef; importers pass those fees along to wholesalers, the costs trickling down to consumers. According to a USDA report last month, Japan’s gate price for pork starts at 524 yen/kg, more than $2.20 per pound at today’s exchange rates. That gate price can increase about 25 percent, to 653 yen/kg, if pork import volumes reach certain levels. That fee is in addition to a tariff, usually between 5 percent and 6 percent, based on the pork’s value.

Meat exporters think Japanese consumers would buy more imported pork and beef if tariffs were eliminated and prices were lower. But that would presumably result in prices becoming lower than meat can be profitably produced in Japan. 

Reduction in Japanese beef production yielded some possible concessions for lowering Japan’s beef import tariffs for Australia in 2015. But because of drought and tight global beef supplies, Australian beef prices remain high, and it is unclear whether those tariff reductions will actually take effect.

Japanese consumers have continued to demand pork and beef, with some indications they are substituting pork for beef as global prices rise. Japanese market share for U.S. beef imports increased this year through July, according to the U.S. Meat Export Federation. And despite more pork imports from the EU to Japan, pork muscle cuts shipped from the U.S. to Japan increased 2 percent in volume and 5 percent in value, from January to July.