Japan Scrambles to Avoid Spoiler Role in Trade Talks

ON the surface, Japan has begun a long-awaited climax of protest and posturing against foreign demands to open its rice market, a step with dreaded consequences for some.

On Dec. 1, for instance, a group of Japanese rice growers took their protest overseas, an unusual sign of desperation. They joined French farmers trying to block a compromise on agriculture made by the European Community last month under threat of trade sanctions by United States.

That compromise, like the one on rice imports that Japan is now being asked to make by the US and others, was crucial to help save six years of negotiations aimed at freeing up global trade.

But below the surface of Japan's public insistence that its rice market be exempted from the trade talks known as the Uruguay Round, officials are scrambling to find a compromise with the US.

"A general consensus has already been made" in Japan's ruling party to open the rice market to imports, says Akio Morita, chairman of the Sony Corporation and vice-chairman of Japan's biggest business group. "This is finally a time for our political leaders to move - a little bit."

One high-ranking leader of the ruling Liberal Democratic Party (LDP), who asked for anonymity, says the government has ordered him and other politicians to keep quiet on the rice issue until a deal is struck.

"It's going to be difficult for Japan to stick to its original position," he said.

While the LDP fears a farmer backlash at the polls, it also does not want Japan to be seen as a spoiler of the trade talks nor have rice become a trade issue with the new US president.

"How far should we continue to press our case?" asked Foreign Minister Michio Watanabe in parliament recently. His comment was about as close to a concession as top officials are willing to make in public until they see the compromise they can get.

Japanese officials insist on being shown the details of the EC-US compromise, which centers on oilseed production, in order to find out what kind of deal Japan can strike. The talks' tentative deadline is the end of December, but that could slip to March.

The final, delicate decision by Japan to allow rice imports will first require a "certain amount of ceremony," advises Toru Kusukawa, chairman of Fuji Research Institute Corporation.

Under a proposal made by the Uruguay Round's chief mediator, Arthur Dunkel, Japan and other food-importing nations would be required to open 3 to 5 percent of their food market to imports and replace all trade barriers with a simple tariff system.

Since Japan's rice prices are about six times higher than world prices, officials hope for an initial tariff of 700 percent. That would be reduced by 15 percent a year until 1999 under the Dunkel plan. Japan would also be able to invoke a "special safeguard" of emergency tariffs whenever imports surge or prices plummet.

"If Japan accepts tariffication, there wouldn't be any effects on farmers during this century," says Yasuhiko Yuize, an economist at Chiba University. "And if an emergency arises, as long as the government has secured enough farm land, then there wouldn't be a major problem."

What is keeping the LDP's back to the wall is the powerful Central Union of Agricultural Cooperatives, known as Zenchu, which can rally rice farmers against the party in an election.

Zenchu chief Mitsugu Horiuchi, in a written plea to rice farmers, stated that Japan is being made a victim by a conspiracy of food-exporting nations.

"Not only will our lives and the agricultural industry be controlled by large businesses that monopolize global food trade, the future for our grandchildren would also be in danger," he warned.

The leading opponent to Zenchu is the Japanese press reflecting the views of young, urban consumers who are often neglected by the LDP. Japan's electoral system is skewed to favor rural areas in the legislature.

"Japan's continued argument that rice should be an exception within the Uruguay Round, which is attempting to create universal rules, is the equivalent of Japan stating that it is a special nation," stated an editorial in the Asahi newspaper. "Would not that endanger Japan's future?"

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