The U.S. Department of Agriculture October 24 issued a fact sheet, in a question-and-answer format, about the U.S.-Japan beef trade agreement.

U.S. Department of Agriculture Fact Sheet

Questions and Answers Concerning U.S.-Japan Beef Trade Agreement

October 24, 2004

1. When will actual shipments likely begin?

It is not possible to say exactly. Before U.S. shipments begin, the Japanese authorities must complete their regulatory process for revising their domestic regulations (i.e., dropping 100 percent BSE (bovine spongiform encephalopathy) testing to instead requiring testing only for animals 21 months and older). Regulations to permit importation of beef from animals 20 months and younger also must be promulgated. The special study of the correlation between chronological and physiological age, defined in the Agreement, must be completed within 45 days. This study will be conducted by USDA/AMS [U.S. Department of Agriculture/Agricultural Marketing Service] in close collaboration with Japanese experts to determine the details of the grading criteria to be used. Thus, all things taken together suggest that several weeks will be required for the resumption of sales.

2. What proportion of previous sales will this Agreement permit?

Previous annual sales (2003) of beef and beef products to Japan amounted to $1.7 billion.

This Agreement permits sales of beef and products from animals 20 months old or younger. The U.S. beef production system is geared to producing younger animals. Estimates suggest that about 70 percent of the 35 million cattle slaughtered each year are steers and heifers 20 months or younger.

Thus, the Agreement will permit a significant portion of previous sales to be recovered in the interim period.

3. How will cattle age be determined? What methods will be used in such a determination?

Two methods will be used to determine that animals are 20 months of age or younger and thus meet the requirements for the Japanese market.

Production records that indicate birth dates will be used. These include records for individual animals; records from insemination; group age verification plans; and records from already existing USDA-certified special programs.

The USDA physiological grading system also will be used. A special study is being conducted to examine the correlation between chronological age and physiological characteristics. This information then will be used to define the parameters of the USDA grading criteria that will be used in determining animal eligibility for export.

4. How long will this Agreement be in place? What is the longer-term outlook for U.S.-Japan beef trade?

Our export sales to Japan were abruptly terminated 10 months ago. This agreement marks a start in the resumption of that trade --- a very significant restart, to be sure.

The operation of this approach --- a special marketing program with specific requirements --- will be reviewed jointly by the two Governments in July of 2005.

A group of international experts, including from the World Organization for Animal Health (OIE) and the World Health Organization (WHO), will be asked to review the BSE situation in both countries and to make recommendations as to how the program might be modified and consumers still be assured of safe beef supplies.

Thus, this Agreement marks a start in the resumption of trade. July 2005 marks an important review. And, the longer-term view would be a return to normalcy in our trading relationship.

5. The Agreement includes resumption of Japan's beef sales to the United States market. What does this entail?

Japan produces a very expensive, high quality specialty beef that it formerly exported to the United States. The export sales of Wagyu or Kobe beef were very limited, about a quarter million dollars in 2001.

Japan has requested to resume its sales to our market. And, without prejudging the results of any evaluation, we have indicated that we will commence our rulemaking process. This will entail a risk assessment by APHIS [Animal Plant Health Inspection Service] and FSIS [Food Safety Inspection Service] inspection of Japanese processing facilities, among other considerations.