U.S., Japan Forge Equivalency Pact To Ease Trade of Organic Products

Bloomberg BNA International Trade Daily

34932526_SFarmers and producers of certified organic products in the U.S. and Japan will be able to sell their products as organic in either country under an agreement announced Sept. 26 by U.S. and Japanese officials.

The agreement, which was announced in Baltimore at the Natural Products Expo East and will take effect Jan. 1, 2014, specifically addresses the import and export of organic plants and plant-based products—for which both countries have regulatory and certification programs—but it enables all U.S. certified organic products to be sold as such in Japan, a USTR official told Bloomberg BNA.

And while it is similar to accords the U.S. signed with Canada in 2009 and the European Union in 2012, this agreement for the first time does not include any so-called critical variances, whereby one country excludes certain products, a U.S. Department of Agriculture official told Bloomberg BNA. In order to reach the agreement with the U.S., Japan agreed to end its exclusion of organic products produced with ligonum sulfonate, a substance used in post-harvest fruit production, or alkali-extracted humic acid, a fertilizer used to help grow a variety of organic crops.
The agreement was signed by Anne L. Alonzo, USDA agricultural marketing service administrator; Ambassador Islam Siddiqui, U.S. trade representative chief agricultural negotiator; and Hiroyuki Kobayashi, director general, Food Safety and Consumer Affairs Bureau.

Organics Could Thrive

U.S. Trade Representative Michael Froman stated in a press release that the agreement would eliminate “significant barriers for small and medium organic producers, benefitting America’s thriving organic industry.”
Laura Batcha, executive vice president of the U.S.-based Organic Trade Association, said in a statement: “This monumental agreement will further create jobs in the already growing U.S. organic sector, spark additional market growth, and be mutually beneficial to producers both in the United States and Japan and to consumers who choose organic products.”

The association also noted on its website that the agreement is the first equivalency agreement between the U.S. and Asia, and said it will expand market access for producers and manufacturers by reducing inefficiencies and bureaucratic barriers.

The organics sector in the U.S. and Japan is valued at more than $36 billion combined and rising, according to the USTR. The Agriculture Department reports that the U.S. exports an estimated $80 million in organic products to Japan, and that is expected to reach $250 million in 10 years. And it estimates more than 17,000 organic businesses operate in the U.S., logging an estimated $35 billion in U.S. retail sales.

Exact estimates of overall current organic imports and exports is as of yet hard to accurately quantify, according to the USDA website. But in 2002, all U.S. organic imports were estimated at between $1 billion and $1.5 billion, and exports valued at between $125 million and $250 million.

Certification Requirements

The agreement clarifies that while Japan does not have an organic certification program for other products such as dairy, meat and alcoholic beverages, any such products originating in the U.S. can be sold in Japan provided they meet USDA organic regulations.

The agreement clarifies how other products such as dairy, meat and alcoholic beverages can enter the Japanese market. While plants and plant products originating in the U.S. can be sold in Japan with the Japanese Agricultural Standards seal, for example, other products not covered by the JAS standards cannot be labeled with that seal. However, any organic products that meet USDA organic regulations can be sold in Japan.

Further, the agreement covers all products produced within the U.S. or Japan, as well as any products for which final processing and/or packaging takes place in either country provided the products meet regulatory standards.
According to the USDA, the most popular organic imports from Japan are green tea, sake and mushrooms. Japan organic imports from the U.S. include soybeans, cauliflower and nuts.

USDA certified organic products exported under the arrangement must be accompanied by an export certificate, and products imported from Japan must carry a certificate from Japan through a certifying body accredited either by the Japanese Ministry of Agriculture, Forestry & Fisheries or the USDA.

The U.S. and Japan will conduct regular reviews of each others systems, and concerns will be addressed by a joint Organic Working Group comprising experts from both countries.

Written by Christina L. Lyons, copyright 2014 Bloomberg BNA International Trade Daily.