Japan and U.S. conflict on farm produce imports

Press, 2 June 1982, Page 11

Japan and U.S. conflict on farm produce imports

NZPA staff correspondent Hong Kong Japan’s politically powerful farmers will ensure that demands by the United States for Japan to liberalise import restrictions on farm produce will, in the main, fail. Japanese and United States officials are meeting in the United States to discuss means of increasing Japanese imports of farm products. Some windowdressing can be expected when the Japanese Government announces a second packagae of market-opening measures. The first package in late January included plans to eliminate or reduce 67 nontariff barriers and followed increasing pressure from trading partners, particularly the United States and the European Economic Community, concerned about Japan's trade surplus with the rest of the world.

Last year Japan’s trade surplus increased tenfold to exceed SUS2O billion. The deficit with the United States alone was SUS billion. Moves taken so far have done little to appease the United States, and at the recent Pacific Basin Economic Council meeting in Nagoya, the United States Assistant Secretary of State for East Asian and Pacific Affairs, Mr Anthony Albrechdt, described Japan as the single most intractable trade policy problem” facing the Reagan Administration. "There is concern that Japan is not carrying an equitable share of a common defence burden and that it has not accepted the responsibility, as it has the benefits, of the free and open trading system we have worked so long to achieve,” he said.

It is not so long ago that the New 7 Zealand Prime Minister (Mr Muldoon) was expressing similar concerns, in rather more colourful terms, about Japanese trading policies.

But times change, and New Zealand, while retaining strong reservations about many aspects of Japanese agricultural policies, particularly those applying to the dairy and beef industries, now enjoys a much more cordial relationship. After meeting with Mr Suzuki in Tokyo last year, Mr Muldoon spoke optimistically of the long-term prospects of Japan as a market for New Zealand's dairy and other agricultural products and said there was recognition of a mutual interest. It is in this context that New Zealand has been closely watching the recent United States initiatives. The New Zealand Government has formally reminded the Japanese Government of the long-standing trading relationship between the two countries and asked that it not overlook some smaller trading partners when considering possible trade concessions affecting agricultural goods. Japan’s six million farmers are a potent force in Japanese politics, and the beef lobby is regarded as particularly effective. The president of the Central Union of Agricultural Co-operatives (Zenchu), Mr Shizuma Iwamochi, told correspondents in Tokyo that the country’s farmers would strenuously oppose any move whatsoever to appease United States demands. He said there was “no room" for any compromise. Pointing out that Japan already took 15 per cent of United States farm exports, including 60 per cent of the 50,000 tonnes of beef exported by the United States, he said Japanese farmers were being turned into a “symbolic victim” of the United States Government. Japanese moves to liberalise imports of agricultural goods could both benefit and harm New Zealand. One theory which a group of politicians from the ruling Liberal Democratic Party at

present visiting the United States are pushing is that a liberalised beef market would bring more benefits to the Australian and New Zealand producer than his American counterpart. A member of the House of Representatives and one of nine members in the mission, Mr Saburo Saigusa, said that high-quality, . lower-priced Australian and New Zealand beef imports would rise and imports from the United States would become stagnant. This theory presupposes that the present quota system in which tender specifications discriminate between grain and grass-fed beef would disappear completely — a move regarded as most unlikely. A larger quota made to favour United States producers would not find favour in either Wellington or Canberra. Mr Saigusa also said that decontrol of the Japanese beef market leading to lower prices for local producers would reduce output resulting in a sharp drop in Japanese imports of feed grains from the United States. Observers in Tokyo believe that measures, likely to be announced soon, will have little immediate effect on New Zealand, but they concede that the Japanese know that sooner or later they will have to make concessions that could ultimately bring benefits. There have been a few recent signs that Japan may need to resume limitied im-

ports of butter and milk powder, and if the Japanese Govenment is searching for areas in which to make gestures it might include such an announcement.’ There are 22 agricultural and fishery products which Japan at present restricts from import, and a further 40 items which have access limited by high tariffs. Japanese sources say the United States is showing particular interest in peanuts, canned pineapple and tomato ketchup.