Title: WTO Negotiations and Other Agricultural Trade Issues in Japan by Masayoshi Honma
1WTO Negotiations and Other Agricultural Trade
Issuesin JapanbyMasayoshi Honma
2New Development of Agricultural Policy since UR
- Tariffication of rice in 1999
- Basic Law on Food, Agriculture, and Rural Area in
1999 - New WTO negotiations on agriculture since 2000
- EPA (FTA) with Singapore in 2002
- Establishing Rice Policy Reform Plan in 2002
- Negotiations for FTA with Mexico and Korea in 2003
3Article 20 of AoA
- Recognizing that the long-term objective
substantial progressive reduction in support and
protectionis an ongoing process, Members agree
that negotiations for continuing the process,
taking into account
-
- (c) non-trade concerns,
4General Elements of Negotiations
- Elimination of tariff peaks in dirty
tariffication - Reduction or elimination of export subsidies
- Reexamination of domestic support criteria
- SD treatment for developing countries
-
- From Bringing Agriculture into the GATT to
Bringing Agriculture into Competition
5Some Issues for Japanese Agriculture
- Multi-functionality of agriculture
- Food security and safety
- Tariff peaks
6Multi-functionality
- Multi-functionality of agriculture, such as land
conservation, natural environment, rural
community, is now recognized. - Need to evaluate the marginal effect of trade on
multi-functionality - But its relationship with agricultural production
is not straightforward and make quantitative
assessment difficult. - Direct subsidies are encouraged to achieve it.
7Food Security and Safety
- Food security cannot be pursued through
self-sufficiency from domestic sources but
through relying also on imports. - Limiting trade is not the correct measure to
achieve it at a minimum social cost. - Stockpiling is a short time measure.
- Safety is consumers legitimate concern, while
too strict standard tend to impede food trade
compliance to SPS and need for capacity building
for developing exporters.
8Tariff Peaks
- Examples of tariff peaks
- Japan rice (490), butter (330),
- konnyaku-potato (990)
- Korea Korean carrot (754), cassava (887)
- Capping the maximum tariff at 100?
9New Dimensions of Negotiations
- Importance of developing countries
- Shift of major players to three cores
- (a) US, EU
- (b) Developing countries
- (c) Japan, Korea, other food importers.
- Weakening power of Cairns Group
- Emerging African countries Cotton initiative
- Shift to FTA for trade liberalization
10Bilateral Trade Issues
- (A) Japan vs. China Safe-guard issues against
three agricultural imports in 2001 - Retaliation by China would have cost 400
billion yen on automobile industry - (B) Japan vs. Mexico Pork and orange juice on
FTA - (C) Japan vs. Korea FTA negotiations
- How to treat agricultural sector?
11(No Transcript)
12- Characteristics of Agriculture in Japan and Korea
Japan Korea
Share in GDP Small Small
Farm size Small Small
Ratio of full-time Low High
Family income Large Medium
Income from farming Small Large
Ratio of aged farmers High but part-time High and full-time
13- Problems in Japan
- Regulations on entry in agriculture from
non-agricultural sector - Part-time farming dominant in rice production
- Expectation on farm land to convert to other use
- Problems in Korea
- Full-time but aged farmers
- Heavy dependence on rice production
- Less job opportunity in rural area
14- Agricultural Trade between Japan and Korea
- Japan ? Korea cigarettes, vegetable seeds,
prepared feed, candies, etc. - Korea ? Japan chestnuts, tomatoes, cucumber,
matsutake, bell peppers, etc. - Japans comparative advantage in high quality of
beef and rice (?) - Koreas comparative advantage in horticultural
products, milk products, pork, cut flowers (?)
15- Effects of Japan-Korea FTA by Kawasaki(2003)
Changes in trade balance (million US) Changes in trade balance (million US) Changes in production () Changes in production ()
Japan Korea Japan Korea
Grain 42 -45 -0.32 0.94
Meat -346 883 -1.54 13.1
Other primary products -48 -12 -0.15 0.48
Processed food -776 1,888 -0.22 7.50
16- Fishery Issues in Japan
- Quantitative restrictions of imports of herring,
cod, yellowtail, mackerel, sardine, horse
mackerel, and saury to
protect domestic inshore fishing - Japan is only the country in the world to impose
IQ on fishery products. - It is not only a trade issue but also a matter of
the management of common natural resources
17- ltResistance against JK-FTAgt
- In Japan agriculture gt fishery (?)
- In Korea agriculture lt fishery (?)
- ltSearching Possible Solutiongt
- Policy shift to decoupled direct payment
- Promoting intra-industry trade
- Cooperation for common fishery resource
management - Establishing common agricultural policy
18THANK YOU!