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Administration Denies Growers’ Japan Rice Bid

Times Staff Writer

The Reagan Administration, in a decision that could hurt Vice President George Bush on the campaign trail, Friday rebuffed demands by American rice producers that it launch proceedings to retaliate against Japan for refusing to buy foreign-grown rice.

At a briefing announcing the politically touchy move, U.S. Trade Representative Clayton K. Yeutter said he rejected the producers’ petition because the rice issue already is on the table in global trade talks, and the United States can be “more effective” in opening markets by negotiating there.

At the same time, however, Yeutter said he was “putting Japan on notice” that it must “permit progress” on the rice issue when the global trade negotiators meet in Montreal on Dec. 4-8. At that session, representatives will review the negotiations up to that point and set the agenda for the next two years of talks.

Petition as Leverage

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He said that if Japan appears to backslide on its commitments to join in talks aimed at opening its agricultural markets, he would ask U.S. rice growers to resubmit their petition and “will make a decision . . . before the conclusion of the Reagan Administration.”

Yeutter’s decision drew sharply differing reactions from the two presidential nominees, both of whom had urged him to agree to the rice growers’ demands during campaign stops in California and Texas, where most of the rice industry is located.

Immediately after the Administration’s announcement, a spokesman for Democratic presidential candidate Michael S. Dukakis said the action “raises the question of whose side they’re on.”

“The facts here are clear that Japan’s determination to keep its market closed hurts our farmers and serves only Japan,” the spokesman said. He called the decision “the latest instance of the Republicans’ refusal to stand up for American jobs.”

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Bush More Circumspect

The Bush campaign was more circumspect. A spokesman said only that “the Vice President believes that (Yeutter) should have accepted the petition, but (he) understands (Yeutter’s) judgment that at this time it would not be the most effective means.”

The spokesman said Bush “endorses” Yeutter’s efforts to press the case in the global trade negotiations.

Separately, Yeutter announced that the United States had hammered out an accord with South Korea designed to resolve another pre-election trade complaint--this by the Motion Picture Export Assn. of America, protesting alleged unfair trade practices by Korea’s film distribution board.

Under the accord, Korea will eliminate previous quotas on foreign-made films and prints and will speed up its distribution system to let in more U.S. films. It also will move to stop demonstrations and boycotts of American-made films.

The accord came after an all-night bargaining session in Seoul. The petition on motion pictures, like the one involving rice, was filed in mid-September to force a decision just before the election. Industry officials said the pact “fits our objectives.”

The decision on the rice complaint was a difficult one for the Administration. Although the Japanese restrictions are a clear violation of international trade rules, the rice issue is such an emotional one to the Japanese that officials here feared it could set off a trade war.

“Were I to have accepted this petition, Japan would have been an adversary for a long time,” Yeutter told reporters Friday.

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Under the more measured, gradual approach he chose, Yeutter said, “possibly Japan will emerge as an ally” in the global trade negotiations.

That same tack had been taken privately by other major U.S. agricultural groups, such as wheat and corn growers, who had feared that pressing too hard on the rice issue now might jeopardize U.S. efforts to negotiate broader benefits in the trade talks.

Japan is the largest overseas purchaser of American agricultural products other than rice, buying $11 billion worth of U.S. farm goods each year.

The rice and film industry petitions were the first to be filed under the new Omnibus Trade Act that Congress enacted earlier this year. The legislation puts the burden on the President to retaliate against an offending country within 18 months if he cannot negotiate a solution. Had Reagan accepted the rice petition, he could have taken a number of retaliatory actions, ranging from imposing quotas to placing tariffs on Japanese imports.

Washington hopes to persuade other nations at the Montreal session, which will involve 96 countries, to begin negotiations aimed at eliminating import quotas and phasing out farm subsidies entirely over the next several years. The talks, begun in 1986, are slated to end in 1990.

The American Rice Millers’ Assn., which had filed the rice complaint, reacted predictably to Friday’s announcement. J. Stephen Gabbert, the organization’s president, said he was “shocked and dismayed” by the action. “Here we go again,” he said.

The move marked the second time in two years that the Reagan Administration has rejected the rice growers’ complaints. Yeutter took a similar action in 1986, contending, as he did Friday, that he thought the rice growers would fare better under longer-term negotiations.

Yeutter said Friday that both he and President Reagan had received written assurances from Japanese Prime Minister Noboru Takeshita that Japan is committed to participating in negotiations designed to open its rice market to foreign imports.

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In the wake of Yeutter’s decision Friday, several California lawmakers issued statements decrying the Administration’s action. Sen. Pete Wilson (R-Calif.) expressed “skepticism” about Yeutter’s explanation, asserting that tougher action is called for.

Rep. Robert T. Matsui (D-Sacramento), who also had supported the rice growers’ petition, branded the move “a smoke screen to buy time and hide from the issue. . . . You can almost hear them partying in the streets of Tokyo.”

Rice growers in California, however, appeared to take the ruling in stride.

Michael L. Cook, president of the state’s Rice Growers Assn., issued a statement Friday in which he called Yeutter’s decision “disappointing but understandable” in view of the broader trade issues at stake.


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