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Inflation prompts some trading partners to cut tariffs on red meat

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Korea joins Mexico, the Philippines, Taiwan, Vietnam and Brazil in reducing or eliminating tariffs on certain food items to lower consumer prices.

Amid global food price pressures, many countries are revisiting trade tariffs on food items. According to U.S. Meat Export Federation President CEO Dan Halstrom, the moves are providing unprecedented global access to some markets.

"Some of our global customers have higher rates of inflation than us," says Halstrom. "So now is the time to try to reduce that impact and one way to do it is to offset or reduce or eliminate existing inbound tariffs."

USMEF Vice President of Economic Analysis Erin Borror says there have already been significant tariff reductions.

"Mexico eliminating tariffs on imports of beef, pork and poultry, that's a bigger step than we've seen from them in the past," Borror says. "The Philippines also reducing tariffs on imported pork, but that was an extension of what was in place starting last year to help deal with their African swine fever related shortage.

"And the announcement for Vietnam actually came last year where they're planning to reduce the tariff rate on pork imports in July of this year. One of the newest developments would be Korea announcing a duty-free quota for imports of pork."

Taiwan also slashed their import duty on beef in half and Brazil eliminated their beef tariff. The tariff shifts have opened opportunities like the expansion of U.S. pork promotions in traditional retail in the Philippines.

"Many local vendors have shifted to selling imported pork, U.S. pork, primarily because of the lower price in the retail section, around maybe like 30 to 40% cheaper," says USMEF Representative for the Philippines Dave Rentoria.

Many of these tariff reductions benefit trade competitors more than the United States, but Borror says that's largely because of the early start the United States had on free trade agreements.

"Let's jump back to Korea, where Brazil and Mexico were expected to be the potential big beneficiaries of that duty-free pork quota that's been announced, but that's because they pay the 25% tariff on frozen, 22.5% on chilled, which is relevant just for Mexico," Borror says. "And even for Canada, where they have an FTA with Korea, their chilled pork is still at an 8.6% tariff this year. While with KORUS, which was implemented in 2012, the U.S. is at zero duty on all of our pork into Korea and on beef, those tariffs have been phased down from 40% to 10.7% for U.S. beef this year."

Borror says unfortunately, many countries where consumers are most vulnerable to high food prices continue to hold onto high tariffs.

"And that includes most of the African markets," Borror says. "It includes basically all the South American markets that we don't have an FTA with, so excluding Chile, Columbia, Peru. It includes the Caribbean Islands, other than Dominican Republic which we have an FTA with, and includes India, Thailand."

Halstrom says a level tariff playing field is advantageous to both U.S. pork and beef.

"If we're on a level playing field duty wise or better, we will win," Halstrom says. "Because I'm convinced that with our industry, with our reputation, with our differentiated high value product, if we're on a level playing field, we can compete with anybody in the world and so that's why getting this tariff normalization is so important to all concerned."

Source: U.S. Meat Export Federation, which is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

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