Japan trade deal good for EU dairy

Published 12 July 17

The recently agreed trade deal between the EU and Japan is expected to provide improved access for dairy exports.  The EU provided about a third of Japan’s dairy imports in 2016, made up of predominantly butter and cheese.  Cheese makes up the majority of Japan’s dairy imports, and while the EU increased its share of these sales in 2016 to account for 30% of volumes, it competes with Australia and New Zealand for market share.  Both of these regions have a geographical advantage, and Australia also benefits from an Economic Partnership Agreement put in place in 2015, giving them improved access to the Japanese market. 

Japan Trade

The new deal puts the EU in a more advantageous position, having secured full liberalisation of trade in hard cheeses, an annual duty-free quota of 20,000 tonnes of soft cheese (rising to 31,000 after 15 years) and the phasing out of all duties over a 15-year period. In addition, it is believed the EU negotiators secured a concession which increases the size of the tariff-free quota in line with the rate of consumption growth in the Japanese market.

Another key benefit from the deal was Japan’s agreement to recognise Geographical Indicators (GIs), including Feta, Roquefort and Parmigiano-Reggiano. This has been a sticking point in the TTIP trade negotiations between the EU and US.

There are fewer benefits from a UK point of view however. In the past two years, the UK has exported around 165,000 tonnes of cheese per year to Japan.  There were also small quantities of butter and whey, although in total British dairy exports to Japan make up less than 1% of Japan’s import volumes.