Japan’s Tariff Cuts Called ‘a Good Start’

Thai government officials and business leaders said Wednesday that the new Japanese tariff reductions will ease trade tension with Southeast Asia but that they fall short of solving overall problems.

Deputy Prime Minister Bhichai Rattakul termed the tariff cuts, which were announced Tuesday in Tokyo, “a good start.”

The Japanese step, disclosed in a “midterm” report on Tokyo’s market-opening measures, reduced import duties by at least 20% on boneless chicken, palm oil, bananas and some other agricultural products exported by the Southeast Asian countries.

The duty on boneless chicken, an important Thai export to Japan, was cut from 18% to 14%. Bhichai commended the cut but said it will amount to a “drop in the ocean” compared to Thailand’s annual trade deficit with Japan--$1.5 billion in 1984, which is 62% of Thailand’s total deficit.

Thai officials complained that the duty on boneless chicken is still higher than the tariff on unboned chicken, a major U.S. export, which will be reduced from 11.3% to 10% on Jan. 1, 1987, under the Japanese program.

The total Japanese reduction package involves 1,860 products, including mined and manufactured products as well as agricultural products. Those of particular interest to Southeast Asia were included in a package of 36 agricultural products dealt with on a case by case basis. The reductions would go into effect early next year after being approved by the Japanese Parliament.

Other tariff cuts affecting Southeast Asian products include:

Palm oil, exported by Malaysia and Indonesia for cooking and other uses, will be duty-free; the present duty is 3%.

The duty on bananas, a major Philippine export, will be 12.5% on April through September shipments, down from 17.5%. In the October through March period, the duty will be reduced from 35% to 25%. The latter rate is aimed at protecting the winter mikan unital, or Japanese tangerine, which is considered to be in competition with the banana.

Other cuts affecting Thailand include castor oil, from 9% to 7.2%; frozen shrimp, 5% to 4%, and frozen pineapple, 35% to 28%.

The Japanese news service Kyodo said that the agricultural products dealt with on a case by case basis had an import value of $645.2 million in 1984 and that boneless chicken, palm oil and bananas accounted for $407.3 million of the total.

Several Thai officials, while calling for further cuts, expressed understanding for Prime Minister Yasuhiro Nakasone’s difficult political problems with Japanese farmers. Bhichai, the Thai deputy prime minister, suggested that the overall deficit problem with Japan could be eased by increased exports by Japanese multinational companies operating here.

“They imported 10 portions of Japanese goods for every one portion of Thai products they exported,” he said. “There was a big imbalance.”

Thai and other regional officials have questioned the whole structure of trade between Japan and Southeast Asian nations. Last year Malaysian Prime Minister Mohammed Mahatir presented the argument with his characteristic bluntness.

“I ask Japan to look not only at what they can take but also at what they can give,” he said, referring to Japanese reluctance to transfer technology to Southeast Asia. “We cannot and will not remain merely as hewers of wood and drawers of water.”