Japan Reportedly Near Accord With U.S. on Rice Imports

Japan is nearing an agreement with the United States to lift its fiercely defended ban on rice imports in six years and open up as much as 5% of its market until then, according to reports in the Japanese press.

The reports in today’s edition of the Nihon Keizai Shimbun and Thursday’s edition of the Mainichi newspaper, along with a similar report in the Korean newspaper Dong A Ilbo, were denied by Prime Minister Morihiro Hosokawa and other top Japanese officials.

The U.S. Embassy in Tokyo said negotiations between the two sides are “fully expected” to be successfully concluded in the next two weeks but declined to give details about the proposals on the table.

If the two sides reach agreement, it would be a major breakthrough on an issue that has long bedeviled bilateral trade relations. It would also provide critical momentum to the global trade talks known as the Uruguay Round, which have dragged on for seven years.

More than any other issue, the rice problem has come to symbolize the worst in U.S.-Japan relations: Americans view it as an outrageous example of Japan’s closed markets and unfair trade, and Japanese regard the U.S. pressure as an arrogant attempt to rob the nation of its ability to feed itself with its most important staple crop.

The Mainichi newspaper reported that U.S. Agriculture Secretary Mike Espy, who was in Tokyo earlier this week, and Agriculture Minister Eijiro Hata had agreed to the plan. According to the reports, Japan would agree to replace its ban on rice imports with tariffs after six years. Those tariffs would be placed on foreign rice to boost their price, thereby protecting Japanese rice--which is five to 10 times more expensive--until the domestic industry could restructure and become more cost-effective and competitive.

Until then, Japan would agree to limited access to its rice market of between 3% and 5%, the newspapers reported.

Facing its most disastrous rice crop in nearly 50 years, Japan recently announced it would allow emergency imports of 200,000 tons this year from several countries, including the United States. As much as 1 million tons may be imported next year, which could provide a boon to California farmers strapped with a surplus of rice.

Toshiharu Nishiguchi, director of the Rice Data Bank in Tokyo, said the Japanese government probably would try to avoid any announcement on rice until the current Parliamentary session ends in December. The Hosokawa government is trying to enact a political reform bill and could be damaged by a concession on rice, he said.