Much to the relief of the Japanese government and farmers, rice is expected to be excluded from a list of products to face substantial tariff reductions in the new round of World Trade Organization (WTO) agricultural product trade talks, which began Wednesday in Geneva.
Japan is teaming up with other major farm product importers, such as Switzerland, to demand that circumstances in their nations be taken into consideration so that agricultural industries in these countries can survive.
So far, such nations as Brazil and India have shown flexibility on the issue, a view echoed by European Union Trade Commissioner Pascal Lamy on certain key products, such as rice. Although the U.S. position on the issue remains unclear, "we don't expect a change in how major items are treated," according to a Japanese Agriculture Ministry official.
Even if rice continues to be exempt from substantial reductions in tariffs, Japan is still likely to come under pressure to cut them to some extent and to increase its rice imports. But Japan, which currently must purchase 770,000 tons of rice a year from overseas, already has 1.2 million tons in reserves. An increase in purchases could cause the nation's expenses for additional storage to balloon, hurting finances.
And in exchange for ongoing protection for rice, WTO members could pressure Japan to sharply lower its duties on other agricultural products. High-tariff products, such as butter, would be hit hard in Japan if a larger number of imports are allowed. Beef and pork producers, already under pressure from overseas, could also face increased competition.
The Agriculture Ministry plans to work on reforms starting this year in a bid to improve the international competitiveness of Japanese agriculture. In addition to concentrating subsidies mainly to large-scale farmers, it will weigh deregulatiory measures in agriculture aimed at making it easier for stock companies to borrow farmland.
(Nikkei)Asia Pulse:
