NEW U.S./JAPAN AGREEMENT COULD BOOST US DRY BEAN EXPORTS
October 21, 2019
On October 7, 2019 the U.S. and Japan signed a trade agreement with the explicit goal, according to the USTR “to open markets and support expansion of U.S. food and agricultural exports, increase farm income, generate more rural economic activity, and promote job growth.”
A trade agreement with Japan has always been a top U.S. trade priority, was a focus of prior trade discussions around the Trans Pacific Partnership, but proved elusive. With the signing of this new bilateral agreement, U.S. dry bean exports to Japan, along with numerous other critical U.S. agricultural exports, will receive duty free or preferential market access to Japan as of January 1, 2020.
Japan ranks as a top ten export market for the U.S. dry bean industry importing between 50,000 to 60,000 MT of dry beans from around the world annually and around 7,000 MT from the U.S. so far this year according to Japanese government statistics. While Japan’s dry bean imports are limited by a quota system, there is tremendous room for growth within the pooled quota amount. 10% tariffs on most classes of U.S. dry bean imports have also limited U.S. dry bean market share in the face of competition from China and Myanmar. We expect to be able to compete on a level playing field as of January 1, 2020 when tariffs on almost U.S. dry bean exports to Japan receive zero duty treatment.
While this alone will boost U.S. competitiveness we still have some work to do on diversifying the use of U.S. dry beans in the Japanese diet. The primary use of dry beans is for bean paste to make traditional Japanese desserts and confections called wagashi.
However, we have seen increasing interest in greater consumption of dry beans for health reasons.
We will be focusing on increased promotion of dry beans to Japan for traditional uses as well as a new focus on diversifying dry bean use beginning this year through a grant from the Foreign Agricultural Service’s (FAS) Agricultural Trade Promotion (ATP) program. We expect to expand these efforts in 2020 and beyond.