A tug-of-war is brewing behind the scenes within the government over whether Japan should do more to help the world’s poorest countries by granting their products, especially seafood, greater access to its lucrative market.
According to government sources, Japan is considering revising its preferential trade scheme for least-developed countries to make most imports, including those of farm and fishery products, duty-free.
Only a limited number of politically sensitive items, including rice, would be excluded from the trade concessions, the sources said.
If a consensus is reached within the government on the market-liberalization initiative for LDCs, it will be put in place next April 1 after obtaining approval from the Customs Tariff Council, an official advisory panel to the finance minister, at the end of this year, the sources said.
The market-liberalization initiative for LDCs is being mulled ahead of an annual summit of the Group of Eight major industrialized countries and an international summit for developing countries.
Assistance for the developing countries is expected to be high on the agenda for the G8 summit in Canada in June. The G8 countries are the United States, Canada, Britain, Germany, France, Italy, Japan and Russia.
The World Summit on Sustainable Development will be held in South Africa from the end of August through early September.
The sources said that additional trade concessions by Japan and other industrialized countries will be necessary for the successful conclusion of a new round of global trade negotiations that was launched recently at the World Trade Organization.
Many developing countries are either opposed or at least reluctant to discussing further trade liberalization, believing it only benefits the industrialized camp at the expense of their interests.
Prime Minister Junichiro Koizumi himself indicated a willingness to consider making more of the LDC-made products duty-free.
“Japan will make efforts toward the objective of making all imports from the LDCs free from import quotas and tariffs,” Koizumi said Friday in a speech at the Boao Forum for Asia on Hainan Island in southern China.
But the Ministry of Agriculture, Forestry and Fisheries, backed by domestic industry lobbies and their staunch supporters within the ruling Liberal Democratic Party, is firmly opposed to any liberalization of the domestic agricultural and fishery markets.
According to the sources, the farm ministry’s position is that any tariff eliminations or reductions should be discussed only during the course of the new WTO-sponsored global trade liberalization negotiations.
In December 2000, Japan decided to expand its preferential import-tariff scheme for products from LDCs. As a result of the expansion, which was put in place on April 1, 2001, the number of both products and countries covered by the preferential tariff was 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 has boasted of the trade concession, insisting that it has made 99 percent of industrial product items shipped to Japan from LDCs duty-free, up from the previous 94 percent.
But the Japanese action has been eclipsed by a much bolder trade concession announced in February 2001 by the 15-nation European Union. The EU concession, dubbed the “everything-but-arms initiative,” will completely eliminate tariffs for all imports — both industrial and agricultural, with the exception of arms — from LDCs by 2009. Japan’s preferential tariff system for the LDCs dose not include a huge chunk of agricultural and fishery imports.
International pressure on Japan to do more to help LDCs through the elimination of import tariffs continues to grow. At the United Nations Conference on LDCs in Brussels in May 2001, U.N. member countries adopted an action program calling for, among other things, efforts by the industrialized countries to do away with such import restrictions as import quotas and tariffs on LDCs.
According to the government sources, Japan imports about 130 billion yen worth of goods from LDCs annually, of which roughly 25 percent are marine products.
Marine products account for almost all of Japanese farm and fishery imports from LDCs. Therefore, if marine products are made duty-free, nearly 95 percent of the farm and fishery imports from LDCs will become tax-free in terms of trade volume, compared with the current 33 percent, the sources said.
Government advocates of further opening the farm and fish markets claim that almost all import tariffs on LDCs’ seafood products are already so low — in the single digits — that their elimination would not have a significant impact on the domestic industries.
“Does Japan really need to keep a mere 1 percent import tariff on shrimp?” asked one senior government official.
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