US Agreement with Japan Potentially Weakens Brazilian Agro Market

RIO DE JANEIRO, BRAZIL – Brazil is about to see a reduction in agribusiness sales to Japan, its fourth-largest trading partner in the food sector.

The United States and Japan are in the final stages of settling the details of a trade agreement that will ease the sale of meat, fruits, cereals, ethanol and cheeses between the two countries.

Brazil will lose out because, in addition to Japan being significant for the Brazilian market, the United States is Brazil’s main direct competitor in the agribusiness sector.

The Japanese have imported US$1.6 billion (R$6.4 billion) worth of food from Brazil from January to August this year. In the list, the highlights are meat, corn, coffee, soybeans, bran, orange juice, and ethanol.

With the exception of coffee, these are precisely the products that North Americans will have access to in the Japanese market by eliminating or reducing import tariffs.

Japan imports US$14 billion in American agricultural products per year. Of this amount, US$5.2 billion is already tax-exempt. Now the Americans want to reduce or eliminate another US$7.2 billion.

In some cases, such as meat, ethanol, cheese, and orange, the tariff reduction would be done in stages. In others, such as fruit, vegetables, and sorghum, the abolition of tariffs would be immediate.

Wheat and derivatives, malt and corn and potato starches would have zero import quotas yet to be defined.

Ultimately, the United States seeks preferential rates on the Japanese market. Donald Trump’s decision, when he took office, made the country leave a trade agreement that was said to be favorable to the United States and that included 11 other countries, the TPP (Transpacific Partnership).

Japan has 126.8 million inhabitants and is a great market for quality products at higher prices.

Source: Correio da Amazônia