Lower the Heat on Rice
The American rice industry is giving the new Omnibus Trade Bill its first crucial test in a demand for action to assure access to the heavily protected Japanese market. The ire of the rice producers and millers is understandable. But their timing is not. We think their petition should be rejected by the U.S. Trade Representative, Clayton K. Yeutter.
There seems little doubt that the petition was filed at this time to try to exploit the tensions of the presidential campaign. Under the law, the Reagan Administration must decide whether to accept the case by Oct. 28, less that two weeks before the election.
A better procedure, more likely to produce a fair and balanced agreement, had already been accepted by both the Japanese and American governments. That agreement is to make the rice controversy a part of the new round of negotiations in Geneva on revisions of the General Agreement on Tariffs and Trade. Pursuit of that procedure will detach the issue both from the emotions of the American presidential campaign and the intense reaction that has been generated in Japan, where the almost hysterical response has been exacerbated by the failing health of Emperor Hirohito.
Rice is a special issue in Japan. A commitment to self-sufficiency has long been part of the island nation’s history, a concern reinforced to almost religious dimensions by the experience with starvation during World War II. Self-sufficiency has deep political roots as well, which accounts for the outrageous subsidy that consumers are forced to pay, about 10 times the subsidies paid in the United States to American rice growers.
But the Japanese must also understand the strong emotions generated in the United States by the barriers that have been built against American rice imports at a time when a staggering surplus in Japan’s favor marks the bilateral trade with the United States. In that context, the request of the American rice growers and millers appears modest, seeking 10% of the Japanese market over a four-year phase-in period. A failure to negotiate a compromise in Geneva will, without doubt, force retaliation on the part of the United States.
Ambassador Yeutter, President Reagan’s trade representative, has called this the most difficult decision he has had to make. It will be made no easier by the inevitable political exploitation of any decision to deny the petition. Sen. Lloyd Bentsen (D-Texas), running for vice president on the Democratic ticket, made this an issue in his debate on Oct. 5 with his Republican rival, Sen. Dan Quayle (R-Ind.). Vice President George Bush, the Republican candidate for President, is on record supporting the rice industry’s petition. The issue is particularly sensitive among California’s rice growers, who would be the principal beneficiaries of any opening of the Japanese market.
Yeutter will be accused, should he reject the petition, of failing to respond the the demand of Congress, implicit in the new trade act, for tougher efforts to assure fair access of American products to foreign markets. That would not be fair criticism in this case, however. The U.S. government already has recognized the importance of the issue and won agreement from Tokyo to place it on the Geneva agenda. Even if Yeutter were to accept the petition, the most likely course of action would then be to refer the case to GATT in Geneva.
In this search for a solution to this troubling problem, two realities must be kept in mind: The final agreement must respect the total balance of U.S.-Japan trade, so that a fight over a single commodity does not jeopardize access of other important exports, and, in all fairness to both nations, the negotiations should be paralleled by efforts to bring under control the munificent U.S. rice program that guarantees growers a significant profit and indirectly subsidizes exports of American rice at a heavy price to American taxpayers.
