Japan Braces for Rice Dispute

Tokyo plans last shot at winning US backing for import ban in coming talks

LIKE a courtroom attorney presenting final arguments, Japan plans to make a last rebuttal to calls by the United States for it to open the door to imports of rice. As a deadline for decision draws near, the tone of this trade dispute has become sharp, with implications far beyond just who reaps profits from rice.

The pace of confrontation will pick up in mid-August, when US Agriculture Secretary Clayton Yeutter - who contends that Japan's global leadership is at stake - arrives in Tokyo to press the issue. Then in September, President Bush will meet Prime Minister Toshiki Kaifu and, again, rice will be high on the diplomatic menu.

Although the Liberal Democratic Party leadership revealed privately several weeks ago that it might allow rice imports to smooth final trade talks, statements to the Japanese public have taken a harder line.

The US warns that if the import ban is maintained, Japan may damage the world trading system; while Japan sees its political establishment, farmers, culture, and even physical survival threatened.

Bilateral US-Japan talks are attempting to reach a consensus before October, when Japan and other nations present final positions on reducing farm protection at the Uruguay Round of the ongoing General Agreement on Tariffs and Trade (GATT) talks.

``The US says an open rice market would be a symbol of trade liberalization,'' said Hideyuki Aizawa, director-general of Japan's Economic Planning Agency, ``but I say that rice is also a symbol to Japan.''

A successful Uruguay Round, which has a deadline of December, would set new rules for trade in goods and services, and help to stem protectionism.

But the entire range of talks are jeopardized by a stalemate over whether to end agricultural trade barriers. And Japan's virtual ban on rice imports is looking like a key sticking point.

A collapse of the talks could lead to the US threatening Japan with trade sanctions next year. Twice since 1986, the US Rice Millers' Association has asked the government for retaliation, but was told the issue must first be taken up at GATT.

LDP officials are looking for ways to avoid a confrontation. Some top politicians recommend that the nation's parliament roll back its ban on rice imports. They have been roundly criticized by other LDP leaders.

Many Japanese politicians are worried about a new style of US tactics in negotiating economic disputes with Japan. One LDP leader vividly recalled last week how Japan fared in the latest dispute, the so-called Structural Impediments Initiative that ended in June:

``At first the talks were like playing judo with the US,'' says finance minister Ryutaro Hashimoto. ``Both sides would suggest points and respond. But something went wrong in the middle of the game. We discovered that the US was playing football.'' The US tactic was to penetrate the opponent's territory, he said. ``When we realized that the rules had changed, we quickly re-grouped and took part in the football game, even though we are not accustomed to it.''

In public, Japan defends it rice import ban as necessary to ``food security,'' and contends that it already imports over half its food. A rich social tradition around rice cultivation and a delicate landscape devoted to expensive rice paddies would be put at risk if cheaper California or Thai rice put Japanese farmers out of business, the argument goes.

But in private talks with the US, Japanese leaders counterattack by claiming the US is ``hypocritical'' because it also bans the imports of many agricultural products. The US claims it will end such protectionism if other nations also do so.

And Japan's leaders contend that their nation cannot be made vulnerable for its most basic food staple, rice. ``Many countries in the world approve of the necessity for food security,'' Mutsuki Kato, policy board chairman of the ruling LDP, which relies heavily on rural votes. However, Mr. Kato fears that Japan may be jeopardizing its ties with the US. Next year the US will be observing the 50th anniversary of Japan's attack on Pearl Harbor, and if trade talks do not go well, he says, ``I fear that `Japan-bashing' may occur.''

As the GATT deadline nears, public debate on rice imports has picked up. On July 30, a group of academics known as the Forum for Policy Innovation, proposed scaling down barriers to rice imports over a 15-year period, starting in 1992. The plan calls for making the nation's rice farming more efficient, reducing the number of farmers by up to 90 percent from the present 3.4 million full- and part-time producers.

``It's time to play our own card on reform, because if the current talks on reforming farm trade fail to bear fruit, Japan's farm sector will receive a major blow,'' said Yujiro Hayami, professor at Aoyama Gakuin University and the Forum's chairman.

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