Yet another block has been added to a diplomatic wall being built by the international community to shut out Japan’s rising protectionism on farm trade.
According to Japanese government sources, Italy has proposed to other Group of Eight countries that the forthcoming G8 summit declare all imports from the world’s poorest countries, in principle, duty-free.
Italy made the proposal at a recent G8 “sherpas” meeting, a runup to the annual G8 summit, to be held in the Italian port city of Genoa for three days starting July 20, the sources said.
Sherpas are G8 leaders’ top personal aides in charge of G8 summits.
The G8 comprises Canada, Britain, Germany, France, Italy, Japan, Russia and the United States.
The sources said that although the Italian proposal is backed by the other European G8 members, Japan is taking a negative stance on it, for domestic political reasons, the sources said.
“With elections for the Upper House approaching, it will be almost impossible politically to make all imports, including agricultural ones, duty-free,” one government source said.
The ruling Liberal Democratic Party is vehemently opposed to any further liberalization of the Japanese agricultural markets, for fear of alienating domestic farmers — the traditional LDP constituency — ahead of the Upper House elections on July 29.
It was not made known immediately how the U.S. and Canada will respond to the Italian proposal.
The proposal comes on the heels of a similar request from Kofi Annan, secretary general of the United Nations.
Annan sent letters to leaders of Japan and other major industrialized countries earlier this year, asking them to open their markets further to imports from the world’s poorest countries.
In the letters, which were delivered ahead of the third U.N. Conference on the Least Developed Countries, to be held in Brussels for one week starting on May 14, the U.N. chief asked the industrialized countries’ leaders to do away with tariffs and quotas on more of their imports from LDCs.
The New York-based world body has so far sponsored similar conferences on two other occasions — in 1981 and 1990 — to discuss assistance efforts for the poorest countries.
The success of the forthcoming U.N. conference in Brussels may hold the key to breaking a stalemate in international efforts to get a new round of global trade liberalization negotiations launched under the auspices of the World Trade Organization, the Geneva-based body that regulates international commerce.
Many developing countries are either opposed to or reluctant about launching the new WTO round, because they fear that further trade liberalization would only benefit the industrialized camp at the expense of their interests.
The new WTO round was originally to have been inaugurated at a WTO ministerial meeting in Seattle in December 1999. But the Seattle meeting of some 140 WTO members collapsed due to sharp differences over agriculture, antidumping and labor issues. The WTO will hold a ministerial meeting again in Qatar in November to try and launch the new round.
In a concession aimed at alleviating the negative stance of many developing countries toward the new WTO round, Japan decided in December to expand its preferential import-tariff system for products from the poorest countries.
As a result of the expansion, which took effect on April 1, the number of both products and countries covered by the preferential tariff scheme were raised. A total of 6,972 items are now imported tax-free, up 352 items, from 48 LDCs, up by six countries.
The Ministry of Economy, Trade and Industry boasts of the concession, insisting that it has made 99 percent of industrial product items shipped into Japan from LDCs tax-free, up from the previous 94 percent.
But the Japanese trade measure was eclipsed by a much bolder trade concession announced in late February by the 15-nation European Union, which completely eliminated tariffs for all imports — both industrial and agricultural items — from LDCs, excluding those for arms imports alone. Japan’s preferential tariff system for LDCs does not include a huge chunk of farm imports.
Annan himself pointed out in his letter to then Prime Minister Yoshiro Mori that imports from LDCs still account for a tiny 1 percent of Japan’s overall imports and expressed hope that Japan will increase imports — not only industrial but also agricultural ones — from LDCs to help them.
Although the new WTO round has still to be launched, WTO negotiations on the so-called built-in agenda of agriculture and services have been under way in Geneva — albeit not on a full-scale basis — since early last year.
But in the farm negotiations, Japan has already come under fierce criticism from many other WTO members, who claim that Japan is even backtracking on commitments it made in the last Uruguay round of global trade liberalization negotiations.
Amid rising international pressure on Japan over farm trade, the Trade Ministry and the Foreign Ministry believe that Japan should do more to increase imports from LDCs ahead of the U.N. conference in Brussels and the G8 summit in Genoa.
“Does Japan really need to keep just 1 percent import tariff for shrimps,” one senior government official advocating the further opening of Japanese farm and fish markets asked.
But the Ministry of Agriculture, Forestry and Fisheries, backed by a strong domestic farm lobby and some LDP politicians, adamantly refuses to budge on the issue.
The recent Italian proposal for the upcoming G8 summit also comes amid rising protectionist sentiments in Japanese industries, especially farm and textiles, which are struggling to survive in the face of increased competition from Japan’s Asian neighbors.
Acting on requests from the domestic industry, the Japanese government imposed temporary “safeguard” import restrictions last week on three agricultural product items — leeks, shiitake mushrooms and rushes used in tatami mats — imported mainly from China.
The government also began recently to formally consider an industry request to impose similar import curbs on towels from China and other Asian neighbors.
The wave of protectionism is beginning to spread to Japanese manufacturers of other farm and textile products, including eels, “wakame” sea weeds, neckties and socks, which are preparing to file requests with the government for emergency restrictions on imports from their Asian competitors.
The U.S. announced Monday that it will keep Japan’s emergency curbs on some farm imports under close surveillance under the so-called Super 301 provision, a U.S. trade law that allows Washington to retaliate over trade disputes.
In his letter to Mori, Annan expressed hope that the prime minister would exert his personal influence to increase imports from LDCs. But strong political leadership could not be expected from the embattled leader.
The only hope for LDCs now may be reformist Prime Minister Junichiro Koizumi, who succeeded Mori on Thursday.
While stronger leadership can be expected of Koizumi than of Mori, it would be too early to jump to the conclusion that Koizumi will move to further liberalize Japan’s heavily protected farm markets anytime soon.
In fact, he has not yet made it clear what specific policies he will pursue on emergency import curbs on some farm products, the new WTO round and other trade issues.
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