How Tokyo views US-Japan trade dispute; Why Japan resists buying more US soybeans, beef
Tokyo — Farm products have become symbolic of the entire trade dispute between Washington and Tokyo. The United States wants Japan to buy a lot more, specifically dropping its quota system and throwing the door open to American beef and citrus fruits.
Japan counters that it already takes more than 16 percent of total American agricultural products - and surely this is enough.
Recent official figures show the farm trade is worth more than $8 billion to the US (although Japan gains more than $10 billion from its car exports). The figures also show that the United States supplies 30 percent of Japan's beef imports already, along with 97 percent of its soybeans, 63 percent of its feed grains, and 59 percent of its wheat.
On the beef issue, US agricultural attache Bill Davis says: ''If the state of Iowa gives up 1,500 jobs in a television plant because Japan makes television sets more efficiently, then cost-efficient Iowa beef producers should be allowed to sell their beef on the open market in Japan.''
A spokesman for Japan's agriculture ministry, K. Ueda, responds: ''America is being unfair. In the last four years we have tripled our beef import quota from the US; our domestic beef industry could not survive complete liberalization.'' (Due to lack of arable land, Japanese farms are much smaller than their American counterparts, contributing to production costs two, three, or even four times higher.)
A recent Japanese government statement turned around the American argument: ''It seems contradictory that the US, which enjoys a comparative advantage in agricultural production, demands that Japan liberalize, without reservation, its domestic market for foreign agricultural products while at the same time forcing Japan to voluntarily limit exports of automobiles, the industry in which Japan has a comparative advantage.''
Japanese farmers see wider implications of the current American pressure. ''First beef and citrus fruits, later rice from Arkansas and California'' is a frequent warning at protest rallies.
Rice is the mainstay of Japanese farming income, propped up by heavy government subsidies that make the domestic product three times more expensive than imported rice. With a rice glut, the Tokyo government has been trying to persuade farmers to switch to other crops like wheat and tobacco - again with heavy subsidies. (Domestic wheat is 3.9 times more costly than imported American varieties, according to official figures.)
The main Japanese argument is: Open the doors to an unrestricted flow of American rice, wheat, and tobacco, and you undermine the entire domestic price support system, seriously damaging the already low income of farming families. Japan's farming population has dropped by two-thirds since the late 1940s, and about 60 percent of farm families now depend on other sources of income, such as working in factories, for their survival. Thus, there is a need to create more opportunities for farmers in agriculture-related income areas by increasing Japan's food self-sufficiency.
With 40 percent of their current calorie intake supplied by imports, Japanese feel vulnerable in the event of war or disaster.
Shigeto Kawano, chairman of the prime minister's Agricultural Policy Council, says: ''Many Japanese are anxious about increased dependency on foreign food sources. This can be attributed to American restrictions on soybean exports to Japan in 1973 and to the fact that US-Soviet trade negotiations for grain clearly showed food could be used in diplomacy as a strategic weapon. Till then, the Japanese had firmly believed food could be bought anywhere as long as you had money.''
Another major issue is restraints on Japanese car exports to the US. It doesn't look like much - maybe a hundred thousand or so cars a year - but it hurts the manufacturers financially out of all proportion to the numbers.
A Japanese auto industry spokesman says: ''American manufacturers enjoy much greater profit margins per unit. We work on a very small return, and with domestic competition for market shares so keen, the need for discounts means we don't really make any money. Exports to the US are our most profitable business.''
From a broader perspective, a government official warns: ''Should Japan equilibrate its trade with the West, this would permit no other option than to reduce raw material imports significantly. Such a possibility would not only scale back the Japanese economy, but would diminish the income of raw material suppliers, heavily dependent on Japan, who would have to cut back their industrial product imports from the West.''
Many Japanese think the US has chosen the wrong target. Food import liberalization, they argue, would trim only about $1 billion off the massive Japanese trade surplus. The Foreign Ministry's Nanao adds: ''All the market opening measures in the world won't eliminate the hard core of the deficit.''