A group representing American dairy manufacturing and marketing industries and their suppliers says that Japan’s import system is a “potential Achilles heel” in trade negotiations. The International Dairy Foods Association (IDFA) sent a letter to U.S. Trade Representative Michael Froman and Secretary of Agriculture Tom Vilsack calling for the replacement of Japan’s current import administration program in the Trans-Pacific Partnership (TPP).
Japan’s Agriculture and Livestock Industries Corporation (ALIC) is the state-trading enterprise that administers the country’s manufacturing milk quotas and imports of dairy products under tariff rate quotas. IDFA believes that ALIC operates in a trade-distorting and inconsistent manner that makes it difficult for U.S. dairy exporters to access the market.
“Suffice it to say that its administration of Japan’s import constraints on dairy products is the antithesis of free and open trade. ALIC is in total control of Japan’s dairy imports,” said Connie Tipton, president and CEO of IDFA. “The financial benefits of the system flow entirely to the government, after which those financial ‘gains’ are shared with Japanese dairy producers. It would be difficult to imagine an import management system that is more trade distortive than this one.”
The letter went out in advance of bilateral meetings and the TPP Ministerial being held over the weekend in Sydney, Australia. IDFA wants the current ALIC system to be replaced with a tariff rate quota system as part of the bilateral negotiations with Japan.