Sources are saying that officials from Japan and the United States have finally reached a breakthrough over the tariff negotiations ahead of US President Barack Obama’s visit next week. The US has reportedly allowed the retention of tariffs on rice and wheat but will require Japan to have a system that will increase the importation of rice from the US.
The two countries have been having a tough time reaching a compromise on the issue of tariffs on the five “sacred” farm category products (rice, wheat, beef and pork, dairy products and sugar) which both want to protect. But this has caused a delay in the finalization of the US-led Trans-Pacific Partnership free trade agreement, which also involves 10 other countries. They are pushing to resolve these issues before the April 24 summit between Obama and Japanese Prime Minister Shinzo Abe. Now it looks like the only thing left to finalize is the tariff on beef and pork, as sources say they have also reached a compromise on sugar and dairy products, which will most likely be exempted from the tariffs as well.
Japan imports around 770,000 tons of rice every year under the tariff-free state trading but then imposes a 778% tariff on those importations that go beyond the minimum access framework that is part of the World Trade Organization deal. The TPP compromise would let the US export more tariff-free rice under private trading. Japan is also expected to drastically lower the current maximum ¥45.2 per kilogram import markup on US wheat. The US was initially looking at removing the tariffs on rice and wheat but then such a move would also increase rice exports to Japan of their competitors Canada and Australia.
[ via Yomiuri ]