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The safeguard mechanism was designed to allow gradual liberalization of the Japanese pork market, while protecting domestic producers from a sudden flood of low-priced imports. Though extraordinarily complex, it is much less restrictive than what Japan could formally have implemented under the Uruguay Round. The safeguard is enforced through the gate price. This is the minimum average price that a shipment must meet in order to enter the country. The gate price is reduced each year, allowing more low-priced product in. If imports increase too rapidly however, the safeguard is triggered, which takes the gate price back to a higher level. There are three separate implementations of the safeguard:
1) Normal Safeguard (SG). The SG goes into effect when the cumulative volume of imports in any one quarter exceeds the average of the preceding 3 years by 19 percent or more. Once SG is triggered, the gate price will remain at the higher level until the end of the Japanese Fiscal Year (JFY).
2) Annual Safeguard. If the annual total of imports exceeds the previous year by 19 percent, then the higher gate price will go into/remain in effect for the first quarter of the next JFY.
3) Special Safeguard (SS). When triggered, SS raises the tariff on pork by 33%. The current ad valorem rate is 4.8%, while the increased rate under SS is 6.4%. The trigger mechanism for the SS is based on imports as a percentage of consumption. The SS is triggered when imports account for more than 30.1 percent of consumption, and exceed 105% of average imports for the preceding three years.
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