U.S. Ambassador Thomas Foley expressed strong concern Monday over Tokyo's plan to impose heavy tariffs on imported rice, saying it could fuel bilateral trade tensions.
"Our problem is not so much with the idea of tariffication itself but with the reports that tariffication might lead to tariffs of 1,000 percent," Foley told a news conference at the Japan National Press Club. "That would be a prohibitive level of tariff."
He said the U.S. has requested consultations with the Japanese government before the tariffs are introduced. Tokyo is expected to notify the World Trade Organization as early as Friday of its plan to liberalize the rice market with the imposition of heavy tariffs to minimize the impact on domestic farmers.
Japan currently imports rice under a minimum-access import quota, in line with the 1993 Uruguay multilateral trade agreement under the General Agreement on Tariffs and Trade, the precursor to the World Trade Organization.
Imposing heavy tariffs "is inconceivable to us at a time when there are rising trade deficits and some rising trade tensions in the United States," Foley said, adding that the action would be considered provocative in many circles of Congress. "So we are urgently requesting consultations to avoid what could be a very serious disagreement," Foley said.
He said the U.S. trade imbalance with Japan is already causing concern and urged Japan to further open its markets through deregulation. "The growing imbalance clearly increases the chances that trade frictions will erupt next year," Foley said.
Tensions could arise in industries such as insurance, glass, automobile parts, forest products and steel, he said. "The best answer for both Japan and the United States in my view is to have a serious and sustained program of deregulation," he said.