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Monday, February 10, 2003

Japan Preparing to Oppose Agricultural Reform at the WTO

Japan and the European Union look set to be the two holdouts against freer trade in agricultural products when the World Trade Organization meets informally in Tokyo next week.The trade and agriculture ministers of the WTO member states will be gathering as part of the latest round of multilateral trade negotiations that began with the November 2001 agreement in Doha. Their main focus will be on agriculture: an area where the EU like Japan seems extremely reluctant to give anything away, and an area in relation to which third world protests are becoming increasingly vocal.

Japan and the EU will try to stymie efforts to liberalize farm trade at next week's informal meeting in Tokyo. The United States and the 17-member Cairns Group of agricultural exporting nations are calling for sweeping tariff cuts. Japan and the EU are opposed. Agriculture minister Tadamori Oshima even went so far as to say a broader market opening would ``completely destroy'' the farming sector in Japan and other Asian nations. Ministry officials are particularly concerned about rice growers. The government shields them from foreign competition with high import tariffs. The pro-liberalization states propose cutting tariffs on all farm products to below 25 percent within five years. Tokyo currently charges a tariff of 341 yen per kilogram of imported rice-upwards of 300 percent of the price of most imported rice varieties. Domestic rice, meanwhile, wholesales for 200 to 450 yen per kilogram, depending on the brand.

The protectionist impulse sits well with the powerful farm lobby. Isamu Miyata, who heads the Central Union of Agricultural Cooperatives, urged Prime Minister Junichiro Koizumi late last month to resist any calls for drastic liberalization. Miyata invoked ``the nation's self-sufficiency in agricultural products'' in calling for continued trade barriers. The agriculture ministry also sees the EU as a trusty ally in the fight against trade liberalization. Oshima formally announced Japan's support last week for an EU proposal that tariffs on farm products be lowered by an average of 36 percent. The EU proposal would allow each country to decide its own tariff cuts, so long as they are not less than 15 percent. The pro-liberalization camp's tariff cuts offer no such flexibility, which is permitted under a provision of the 1986-1994 Uruguay Round of trade talks. The EU trade regime would, for example, allow Japan to cut its tariff on imported rice by the 15-percent minimum, to 290 yen per kilogram. A 100-yen kilogram of imported rice would therefore wholesale for about 390 yen-as opposed to 125 yen if the Cairns Group and the United States prevail. Tariff cuts are at the center of the dispute over farm trade, which is one of the seven items on the table in the latest round of multilateral trade talks.

The outcome of the agricultural talks will therefore make or break the new round. WTO member states are working toward a March 31 deadline to conclude a framework agreement on farm trade. It will specify means, such as formulas and tariff cut targets, by which agricultural markets are to be opened. The Tokyo ministerial meeting, which runs next Friday through Sunday, will be an important venue for consultations among members. But there are few signs of a consensus emerging from the meeting, with the two camps still far apart. Many negotiators say they doubt the member states will even be able to meet the March 31 deadline. WTO members are eagerly-and cautiously-waiting for the first draft of the framework agreement for liberalizing farm trade, which Stuart Harbinson, the WTO official chairing the agricultural negotiations, is expected to release just before the Tokyo meeting. The report could set the tone of the meeting, to which 25 countries are expected to send their ministers.
Source: Asahi.com

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