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Dairy Activity Update Under US-Japan Trade Agreement

The U.S.-Japan Trade Agreement (USJTA) has been in effect for 17 months, however the timing of Japan’s fiscal year meant that the agreement entered “Year 3” of implementation on April 1, 2021. This report is one in a series of product briefs highlighting the tariff benefits for specific commodities and products from Year 3 (2021) to Year 5 (2023) of the agreement. 

In 2020, the United States exported $93 million of lactose, milk albumin, and other dairy components (excluding cheese, butter, milk powder, and whey) to Japan. The United States accounted for 21 percent of Japan’s total imports of these products. Overall, Japan ranked as the #2 overseas market for these products. The years below correspond to Japan’s fiscal year beginning April 1.

Country-Specific Quota (CSQ): Products consisting of natural milk constitutions used for infant formula (no added sugar) are included in the CSQ for U.S. whey which grows from 5,400 metric tons (MT) to 9,000 MT by 2028. In addition, Japan created a 750 MT tender within its current WTO dairy quota specifically for skimmed milk powder with a minimum 35 percent protein content by weight on a milk solids-not-fat-basis.

Market Considerations: The United States is a major supplier of lactose and milk albumin to Japan. These products are attractive to Japanese buyers since they can be imported outside of Japan’s government-operated dairy quota system (which manages imports of butter, nonfat dry milk, and whey). Under the U.S.-Japan Trade Agreement, ad valorem tariffs on lactose and milk albumin were eliminated immediately on January 1, 2020. Lactose is a key ingredient in seasonings, confectionary, and dairy drinks. Whey protein concentrate (with over 80% protein content) and whey protein isolate are imported as milk albumin. – By Aki Imaizumi & Akiko Satake, USDA Foreign Agricultural Service

Additional Resources: Further information is available at www.usdajapan.org.  For additional questions, please contact the USDA Agricultural Trade Office at atotokyo@usda.gov, Tel: 81-3-3224-5115.

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