Japan is considering using increased rice imports from the U.S. as a negotiating tool in tariff talks with the administration of U.S. President Donald Trump, according to various media reports.
Currently, Japan imports around 770,000 metric tons of rice each year, free of tariffs, under its “minimum access” deal signed with the World Trade Organization in 1995. The deal was signed after the country was criticized for its protectionist stance.
Last fiscal year, Japan imported 346,000 tons of U.S. rice under the framework, making the country the biggest source of foreign rice under the WTO framework.
Trump has criticized the system in the past, falsely claiming that Japan imposes a 700% tariff on U.S. rice. This assertion was likely based off a calculation by the farm ministry offered in WTO negotiations in 2005 — based on international prices for rice between 1999 and 2001 — that showed the tariffs amounting to around 778%. However, according to basic calculations using current day numbers, the tariffs are thought to be around 227%.
The government is now considering adding an annual import quota of at least 70,000 tons of U.S. rice to the trade deal, hoping it will give them more cards to play in tariff negotiations with the U.S.
The idea of setting an import quota is not new. As part of the Trans-Pacific Partnership deal signed in 2016, it was agreed that Japan would set an import quota of around 70,000 tons of tariff-free rice from the U.S. However, the U.S. scrapped the deal when Trump decided to leave the TPP soon after starting his first term as president.
In the 2019 trade agreement between Japan and the U.S., the implementation of an import quota on tariff-free American rice was postponed.
Rice is a staple food in Japan, and increasing imports is a sensitive topic with potential political repercussions.
“I am aware that there have been various reports about rice, but since this is a detailed diplomatic exchange, I will refrain from commenting on it,” Ryosei Akazawa, Tokyo's top tariff negotiator, said on Tuesday.
Many in the ruling Liberal Democratic Party fear that such a move would lead to a loss of support from agricultural workers — a major supporter of the party — in the upcoming Upper House election.
The plan also comes at a time when rice prices remain at an all-time high. In the week of April 7, the average price of 5 kilograms of rice at supermarkets was ¥4,217 — more than double the same period last year and the 15th consecutive week that prices have risen.
To resolve the supply chain bottleneck causing prices to rise, the government has been releasing emergency stockpiles of rice since last month, with the third round of bidding held on Wednesday. However, consumers have yet to see the effects of the government's moves.
Despite this, agriculture minister Taku Eto has expressed caution over the idea of relying on imported rice as a quick fix.
“I would like the public as a whole to consider whether it is in our national interest to build a system that makes us largely dependent on not just the U.S., but foreign countries in general for rice — a staple food that we can be self-sufficient with — resulting in a significant decrease in domestic production of rice,” he said Tuesday.
“I have serious doubts about whether buying something from overseas just because it's cheap, even for rice, will really help to ensure food security and to meet the people's concerns in the long-term,” he added.
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