• Kyodo

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There is no way Japan can abide the tariff-cutting formula proposed by the United States at the ongoing session of farm trade talks at the World Trade Organization, a Japanese official said Tuesday while pushing Japan’s proposed formula.

Hidenori Murakami, director general for international affairs at the Ministry of Agriculture, Forestry and Fisheries, said the March 2003 deadline for “modalities” on farm-trade talks would be jeopardized if the U.S. insists on a uniform 25 percent tariff cap for all farm imports.

Negotiators at the WTO-sponsored talks aim to produce numerical targets and other “modalities” for their agricultural reform commitments by March 31.

Speaking at a news conference in Geneva, Murakami said the U.S. proposal, also backed by the Australia-led Cairns group of farm-exporting countries, is “not realistic.”

Asked if he meant the only way out is for the U.S. to compromise and accept Japan’s proposal, Murakami said, “It means that.” He said both parties can reach an agreement “as early as tomorrow” if the U.S. adopts a flexible stand.

The Japanese proposal, which Tokyo claims would take flexibility and continuity of the Uruguay Round spirit into consideration, drew fire from farm-exporting countries, including Uruguay — a Cairns group member.

The critics called the Japanese plan “a step backward” from the Uruguay Round, as the previous round of multilateral trade talks is known.

The U.S. proposal, also known as the Swiss formula, aims to put a uniform 25 percent cap on tariffs on all farm imports.

It multiplies the current tariff rate by a factor of 25, and divides the figure by the current tariff rate plus 25. The higher the tariff, the bigger the reduction rate.

The Japanese proposal, known as the Uruguay Round method, first sets the lowest tariff reduction rate before determining an average tariff reduction rate for all items. This formula enables importing countries to maintain high tariffs on certain imports, including rice, in Japan’s case.

The method combines minimum market access and average tariff cuts, instead of a uniform cap.

Japan says specific tariff reduction targets should be set at future negotiations.

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