Big Wins for Beef Exports: What It Means for the Industry

The Trump administration announces trade breakthroughs giving U.S. beef producers greater access to Australia, Japan and South Korea.

Australia has moved to reduce restrictions on U.S. beef imports as an attempt to smooth trade talks with the Trump administration and avoid tariffs. The U.S. beef industry has had several trade wins this week with frameworks also announced with top beef export markets like Japan and South Korea.

The U.S.-Australia Free Trade Agreement (FTA) took effect in 2005 and was intended to allow U.S. beef to be sold in Australia. During the past 20 years, Australia has used countless tactics to delay implementation of the agreement and prevent any shipments of fresh or frozen U.S. beef from entering Australia.

Kent Bacus, National Cattlemen’s Beef Association executive director of government affairs, says during the same 20-year period, “They’ve been able to ship roughly $29 billion worth of beef to our market, but because of a lot of bureaucratic red tape and all in the name of biosecurity Australia has kept us out.”

Secretary of Agriculture Brooke Rollins issued a statement congratulating President Donald Trump on the Australia announcement.

“American farmers and ranchers produce the safest, healthiest beef in the world. It’s absurd that non-scientific trade barriers prevented our beef from being sold to consumers in Australia for the last 20 years,” she says.

NCBA President and Nebraska Cattleman Buck Wehrbein adds, “NCBA has spent decades working to correct this trade imbalance, and we are proud to have a president who is willing to fight for American farmers and ranchers, expand export markets and fix unfair trade agreements across the world.”

With the announcement, Australia has approved importation of U.S. fresh and frozen beef of all ages, allowing the U.S. to ship product very soon.

“This is a big win for us,” Bacus says.

He explains this paves the way for complementary trade and growth as Australia is currently not a big market for U.S. beef. It is an opportunity for the U.S. to develop a consumer base in Australia for higher end cuts.

Japan Framework Released

Bacus says the new framework with Japan, also extends gains from the existing Free Trade Agreement and he hopes the president is eventually able to negotiate the tariff on U.S. beef down to zero.

“That tariff is phasing down to 9%, we’re about halfway there, but we really need to kind of push that along because Japanese consumers want our product,” he says.

Dan Halstrom, U.S. Meat Export Federation (USMEF) president and CEO, says, “USMEF greatly appreciates the Trump administration’s agreement with Japan, reassuring and expanding opportunities in the No. 2 export destination for U.S. beef and pork.

“In President Trump’s first term, the critical U.S.-Japan Trade Agreement was reached, returning U.S. red meat to a level playing field in Japan and restoring its position as an extremely reliable market,” Halstrom says. “According to the information released by the White House, the new agreement focuses on reinforcing the long-term economic partnership between the U.S. and Japan, which for decades has delivered tremendous benefits for the U.S. livestock and meat industries and for Japanese consumers, importers and customers.”

Other Frameworks and Opportunities

South Korea and the U.S. reaffirmed their commitment to reach a trade agreement ahead of the Aug. 1 U.S.-imposed deadline when U.S. tariffs are set to rise.

South Korea’s framework would also expand the FTA struck in 2012. Bacus says they’re pushing to get BSE (bovine spongiform encephalopathy) beef restrictions still in place since the U.S. regained market access in 2008 removed.

“For Korea, all we asked was for consultations to remove that 30-month restriction that we have due to BSE,” he says. “We know that is a sensitive issue for Korea, but quite honestly, there’s no scientific justification for keeping us out. And we have developed a lot of trust with Korean consumers.”

Since the FTA in 2012, Korea has become the largest export market for U.S. beef with sales of more than $2 billion annually.

Bacus also mentioned progress is being made with Indonesia and other Asian Pacific countries. He appreciates Trump’s push to get the U.S. back to the negotiating table.

“For the last four years, the Biden administration had stepped away from that. We were not talking about market access. We weren’t talking about a lot of significant trade issues,” he says. “We were able to get a couple of technical things resolved, but overall, there weren’t real benefits being delivered for agriculture, and that has shifted. And other countries know that other countries are looking to avoid this Aug. 1 deadline for retaliation. This presents a good opportunity for us to basically make up for a lot of lost time.”

China Hopes Continue

Bacus says they are closely watching next week’s talks between the U.S. and China.

The third round of discussions is set to take place in Stockholm and while it isn’t likely to result in a deal, it is an important step in the process.

He emphasizes that China did not fulfill their purchase obligations under the Phase One deal and has also failed to renew export certifications for 394 U.S. beef plants, which is effectively keeping the U.S. out of the Chinese market.

“China could be a good market, but we cannot put all of our eggs in one basket,” he summarizes. “We need to really build demand around the world and build relationships with trusted partners, starting with our allies. We’re hopeful that we can resolve issues with China, but we have to be realistic in the fact that China will play these games from time to time, and we need access to markets we can trust, that are dependable and that are going to live up to their word.”

Possible 50% Tariff on Brazil Also a Win

President Trump has also threatened to impose a 50% tariff on Brazilian imports, which would include beef.

Bacus says NCBA would like Brazil’s market access to be fully stripped due to concerns regarding Foot and Mouth Disease but this move would effectively help level the playing field.

“In the last five years, we’ve only been able to export $21 million worth of U.S. beef to Brazil,” he says. “Meanwhile, they’ve sold about $4.5 billion worth of beef into this market. A lot of that is lean trim, we fully understand, but you’ve got to look at that significant imbalance and look at the cause of that, and it’s these unfair trade practices.”

He adds Brazil shouldn’t have access to the U.S. until it can demonstrate it has an equivalent level of food safety and animal health.

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