By Andrea Shalal

WASHINGTON, (Reuters) – The United States announced Thursday a deal that would allow American ranchers and farmers to supply Japan with beef. It also lowers Japan’s chances of imposing future higher tariffs.

New mechanism is included in the deal that requires Japan to meet three different conditions – not just one – to trigger a “safeguard trigger” which will allow it to increase U.S. beef tariffs for up to 30 days.

“This agreement is a great win for our two countries that ensures American farmers and ranchers can continue to meet Japan’s growing demand for high-quality U.S. beef,” U.S. Trade Representative Katherine Tai said in a statement.

According to a U.S. senior official, after more than a year of negotiations, the agreement will enter into force.

U.S. Agriculture Secretary Tom Vilsack praised the agreement, saying it would promote market-based growth of beef exports from the United States to Japan.

U.S. data show that the United States was world’s largest beef exporter in 2021, with worldwide sales of beef products and meats valued at over $10 billion.

In 2021, Japan received almost $2.4 Billion in beef exports from the United States.

U.S. meat processors had pushed for an adjustment of thresholds. This was because U.S. beef was in a disadvantage against other exporters that are part of Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

To allow safeguard tariffs in place, beef imports must exceed the threshold established in the CP-TPP Agreement.

According to Reuters, a Japanese agricultural ministry official said that the TPP was a system that existed before the U.S. departed. “This agreement allows us to bring the U.S. back into that scheme.”

Until the United States pulled out of negotiations in 2017, the CP-TPP was expected to be the most important trade agreement in the world. They signed an independent bilateral free trade agreement.

Japan increased its “safeguard” duty to U.S. beef by 38.5% to 25.8% from March 2021. This was 30 days after U.S. meat imports had reached 253,051 tonnes. That is more than the trigger level of 242,000 metric tons. The drought that hit Australia had caused a rise in demand for U.S beef.

Two countries reached an agreement after the tariff increase.

U.S. The Japanese Ambassador Rahm Emanuiel declared in a statement that the agreement was a victory for Japanese consumers.

Although there were “big differences” in the beginning of negotiations, both parties reached an agreement on Thursday evening.

The current duty rate for U.S. beef entering Japan is 25%. This was negotiated under the Agreement to Japan’s Fiscal Year 2021. It expires on March 31. No higher temporary duties are expected during the current fiscal year.

A senior official stated that the three-trigger system eliminates any uncertainty for U.S. Exporters, even when there is shifts in the market availability from different countries over a year.