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Clouds on TPP Horizon
Thursday, April 24, 2014 10:00AM CDT

By Richard Smith
DTN Tokyo Correspondent

TOKYO (DTN) -- Despite media rumors of Japan giving ground on some agricultural items it considers sensitive, U.S. exporters should not pin their hopes in the short term on Tokyo accepting total liberalization under the current Trans-Pacific Partnership (TPP) negotiations.

Masayoshi Mizuno, Japan Ministry of Agriculture, Forestry and Fisheries (MAFF) International Economic Affairs Division director, who is in charge of TPP negotiations on agricultural products, summed up the differences of viewpoints between his country and the U.S. in an interview with DTN. The latter wants Japan to open its agricultural market to a much greater extent than in previous free trade agreements it has entered.

On the other hand, the Japanese government is constrained by domestic demand expressed a year ago in a resolution adopted by the Diet (Japanese parliament). The resolution stated that five (actually seven) sensitive items (rice, wheat and barley, sugar, dairy products, and beef and pork) need to be excluded or subject to renegotiations.

"With that difficult constraint upon our government negotiators, we cannot accept all the demands from the United States," Mizuno said.

The TPP, a 2005 pact between Brunei, Chile, New Zealand and Singapore, called for reduction of all tariffs by 90% between member countries by Jan. 1, 2006, and reduction to zero by 2015. In the past few years, Australia, Canada, Chile, Japan, Malaysia, Mexico, Peru, the U.S. and Vietnam have been negotiating to join.

Most Japanese farmers are opposed to their country entering the trade pact, because if present restrictions are lifted, greater volumes of cheaper imports will come in, rendering their higher-priced products unsaleable. "It's a great worry," said National Chamber of Agriculture executive director Hirota Matsumoto.

Geopolitical considerations add to social and economic ones, at least in the case of sugar. Japanese sugar comes from three sources -- beets in Hokkaido (Japan's big northern island), beets and sweet potatoes in Kagoshima Prefecture in the south of Japan's big southern island of Kyushu, and sugarcane in Okinawa and islands off Kagoshima Prefecture.

In recent years, Japan has been fighting claims from China and South Korea over islands in the Sea of Japan. As the economy of the sugarcane-growing Kagoshima Prefecture islands is totally dependent on sugarcane agriculture, its disappearance would cause the islands to depopulate, a reporter who covers the TPP for a Japanese media said.

"Without people on those islands, there are fears China and South Korea might lay claim to them," said the reporter, who asked to not be named.

Western people consider rice the quintessential Japanese agricultural product, but even more than an important foodstuff, Japan's rice-growing contributes to preserving the environment, the landscape, the form of the community and Japanese culture. If production would stop, paddies would become overgrown by trees and it would be difficult to restart production if ever necessary, the NCA's Matsomoto said.

"If cheap rice starts coming into the country, things will become difficult," he said.

But Rice Industry Organization of East Japan President Toru Wakui offered a dissenting view. The value of rice is also determined by quality, Wakui said. "But price is an important factor, and it is necessary to strive to bring down Japanese rice prices," he said.

The Japanese farming population is aging, so with or without liberalization, most farmers are preparing to quit. "Those farmers will not be able to protect the environment," Wakui said.


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