Japan is annoying pork exporters once more with an import barrier, but Canada Pork International doesn’t know if it will actually hold back any product.
“Does it have an impact? In theory it should. In practice it hasn’t,” said Canada Pork International executive director Jacques Pomerleau.
“Will it this year? We don’t know.”
The World Trade Organization has allowed Japan a “safeguard” program that allows the Japanese government to boost the “gate price” for imported pork if imports in any quarter of the year exceed a certain level.
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The gate price is the minimum that importers must pay for a shipment of pork. On July 29, Japan announced it was increasing the gate price by 23 percent.
Pomerleau said the purpose of Japan’s program is to protect its pork producers from cheap foreign imports.
The program should cut off all but the most expensive cuts of foreign pork from entering, but that doesn’t always happen.
“Lower value cuts should no longer have access to that market, in theory. In reality it depends on how stocks are in Japan,” said Pomerleau.
The program is automatically triggered when imports rise to a certain level, which means that even if the Japanese have little pork on hand, they still have to pay high prices to import pork to fill the shortfall.
That raises prices for Japanese consumers and can be counterproductive.
“It doesn’t make any sense because it doesn’t take account of what’s going on in the market,” said Pomerleau.
That was a problem two years ago when Japanese consumers fled from beef after a cow was diagnosed with bovine spongiform encephalopathy.
Consumers turned to pork, which caused imports to increase. That caused the program to kick in, which boosted prices, which penalized Japanese consumers, Pomerleau said.
The new gate price will apply until April 1, 2004.
Pomerleau said Canadian exports to Japan have significantly increased in the past two years, even though this program has been activated both years.
