TOKYO, Japan – Nobody in Canada thought a Japanese desire to protect itself against surges in pork imports would severely disrupt normal trade.
But that’s what it has done and Japanese importers are aware of the problem. In the complicated world of Japanese agricultural policy, the likelihood of a quick fix is remote.
Canadian meat exporters met with Japanese importers on the first day of a 10-day trade mission to Japan and Indonesia led by federal agriculture minister Ralph Good-ale. The emergency safeguard tariff system is a key issue.
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Jacques Pomerleau, executive director of Canada Pork International, said the safeguard kicks in when imports exceed 119 percent of the average import quantity during the corresponding period for the last three years.
“We were consulted on the safeguard but nobody foresaw what would happen. An increase to 120 percent, no way, how could it happen? But it did happen the first year.”
For reasons unrelated to trade agreements, including a large number of retiring farmers and environmental concerns, Japanese hog production has fallen sharply in the last two years. To maintain consumption, imports had to rise. The trigger level of 152,400 tonnes was reached by May and the safeguard tariff was imposed.
Japanese importers realize the system is a problem but they probably won’t be able to get the government to change it.
Guard other commodities
“If they allow any modification to what was negotiated, it will open the door to other commodities and they are highly sensitive to the rice issue. So the Japanese government position is: ‘We won’t re-open the WTO (World Trade Organization) agreement no matter what,” Pomerleau said.
Taiwan, Japan’s dominant pork supplier with about half the market, is getting around the system illegally. But because Taiwan is not a member of the World Trade Organization, Canada and other competitors cannot launch unfair trading complaints.
Pomerleau said China might be of some help. The Asian giant is expected to be admitted to the world trade body in the next year or two. When it does, Taiwan is almost sure to follow and that will force it to comply with trade rules.
Pomerleau also believes Taiwan is about to reach its limits as a pork producer. It is a mountainous country about the size of Vancouver Island, with a population of about 20 million people.
He believes Denmark, another large hog exporter, is too far away to significantly increase its market share in Japan.
Australia and New Zealand are relatively close, but do not have sophisticated hog industries that can produce the quality animals that Japan demands, Pomerleau said.
Canada’s pork exports to Japan have increased to $225 million from $165 million in 1993, but market share has remained at about five percent.
Canada could have sold more, but didn’t raise enough hogs to build the business. Now, the push to increase production and expand slaughter facilities in Canada could provide enough product to broaden market share, he said.
The only major long-term competitor will be the United States and its muscle in volume and price.
“We won’t be able to compete head to head with the Americans. But we have a different product, a different quality. Also, our Canadian plants are smaller and therefore have the ability to produce customized products.
“Our overall objective is to go and get that premium.”
