Japanese Beef Tariffs: Beef Quality, Farm Programs, and Producer Compensation
-
Andrew Schmitz
,
James L. Seale
Abstract
Beef is a highly protected commodity in Japan and the number of studies on the impact of beef import tariff reduction has increased in light of the controversy over the Trans-Pacific Partnership Agreement (TPPA), in which the gains from freer trade in beef was a major point of discussion. We estimate that an 11% tariff reduction for Japanese imports of both Australian and U.S. beef can generate a net welfare gain to Japan of between US$92 million and US$915 million. These results are not overly sensitive to whether beef is treated as homogeneous or heterogeneous. A more significant determinant of welfare gains is the extent to which farm policy would be decoupled along with tariff reductions. Under a decoupled farm program, producer welfare can remain unchanged while the net gain from freer trade is identical to that of complete removal of price supports with no compensation to producers. Therefore, negotiators for U.S. and Australian beef interests should lobby for both lowered tariffs and a decoupling of domestic farm policy within the importing country. This seems to have been the case as Japan was willing to move toward a more decoupled farm program under the TPPA.
Appendix
Wholesale carcass price by grade, Tokyo market, 2015 annual average price.
(The yearly average exchange rate between Japanese Yen and US dollars is 121 USD per Yen, Foreign Exchange Service, http://www.usforex.com/)Data source: MAFF, “Meat Statistics”, Tokyo Central Wholesale Meat Market
Cattle slaughtering in Japan.
Data Source: Japan’s Agricultural and Livestock Industries Corporation
Acknowledgements
The authors thank Dr. Manhong Zhu for her contributions on the impact of lowered Japanese beef tariffs: (1) Zhu, M., 2016, The Trans-Pacific Partnership and Japan’s Agricultural Trade, Ph.D. dissertation, University of Florida, and (2) Schmitz, A., M. Zhu, and D. Zilberman, 2017, The Trans-Pacific Partnership, GMOs, and Japan’s Agricultural Trade, Journal of Agricultural and Food Industrial Organization 15(1). These results have been extended in this paper. The authors also thank Carol Fountain for editorial assistance.
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© 2019 Walter de Gruyter GmbH, Berlin/Boston
Artikel in diesem Heft
- Invited Paper
- Japanese Beef Tariffs: Beef Quality, Farm Programs, and Producer Compensation
- Research Articles
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- Food Retail Liberalization, Food Retail Structure and Food Prices: The Italian Case
- Asymmetric Price Transmission along the European Food Supply Chain and the CAP Health Check: a Panel Vector Error Correction Approach
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Artikel in diesem Heft
- Invited Paper
- Japanese Beef Tariffs: Beef Quality, Farm Programs, and Producer Compensation
- Research Articles
- Spillover Mechanisms in the WIC Infant Formula Rebate Program
- The Ambiguous Impact of Information Related to Fish Sustainability
- Food Retail Liberalization, Food Retail Structure and Food Prices: The Italian Case
- Asymmetric Price Transmission along the European Food Supply Chain and the CAP Health Check: a Panel Vector Error Correction Approach
- Russian Market Power in International Wheat Exports: Evidence from a Residual Demand Elasticity Analysis
- Patented Innovation and Firm Value in the U.S. Food and Drink Industry: The Economic Importance of High-Quality Product Innovation
