Japan Rejects GATT Report Backing U.S. Complaint

Japan, reacting to an unfair trade complaint brought by the United States, said Wednesday that it could not accept in full a GATT report urging Tokyo to remove import quotas on 10 agricultural products.

The United States had complained that Japanese import restrictions on 12 dairy, fruit and processed meat products were discriminatory. In October, a three-person panel of the General Agreement on Tariffs and Trade, a 95-nation organization that oversees world commerce, found Japanese quotas on 10 of the items violated GATT free trade rules.

Japan’s trade ambassador, Yoshio Hatano, told a closed-door meeting of the GATT on Wednesday that Tokyo could only lift the import restrictions on eight of those 10 items, delegates said. He said they could not be removed on starch and evaporated milk.

The other food items challenged by Washington ranged from catsup to processed cheese, canned pineapples and tomato sauce. U.S. Special Trade Representative Clayton K. Yeutter said earlier this week that the United States could not accept a Japanese compromise offer on eight of 10 of the products.

A Japanese delegate said: “Ambassador Hatano said Japan can’t accept the GATT report in its entirety. He said two items were not possible.”

U.S. trade ambassador Michael Samuels said: “The dispute has been put off until Thursday. I think Tokyo wants to listen to the views expressed by so many GATT members.”

Argentina, Australia, Austria, Brazil, Hungary, New Zealand, Uruguay and the Philippines--on behalf of the six-nation Assn. of South East Asian Nations (ASEAN)--urged Japan to accept the dispute panel report in full, delegates said.

Samuels said: “We were very pleased so many countries spoke in favor of the dispute settlement mechanism. It is not just an agriculture issue.

“We cannot allow there to be a precedent to accept just parts of a GATT panel report. It runs the risk of a country being able to pick and choose which parts they like.

“We have accepted some panel reports against us this year,” Samuels added. “We think Japan should do likewise.”

An ambassador from one of the countries that called on Japan to fully implement the GATT panel report told Reuters:

“We suspect a fight is going on between Japan’s agriculture and foreign ministries on this.

“Even if Japan adopts the full report, we anticipate problems in their implementing the recommendations,” he added.

Delegates said Japan’s Hatano challenged the GATT panel ruling that the import quotas on the food items could not be justified on the basis of a GATT rule making certain exemptions for state trading monopolies.