Japanese negotiators are considering proposing a maximum import quota of 70,000 tons for U.S.-made rice in the bilateral negotiations under the Trans-Pacific Partnership free-trade talks, it was learned Thursday, July 9. Japan is also planning to set an import quota for Australian rice, possibly amounting to roughly 12 percent of that for U.S. rice, or about 8,400 tons at most, negotiation sources said.
The government plans to purchase as reserved rice the same amount of domestically-grown rice as the import quota in an effort to prevent imports from having adverse effect on domestic supply-demand balance of table rice. However, the government’s move is likely to face strong opposition from rice farmers who have continuously been reducing production of table rice.
Under the government’s plan, Japan will maintain a tariff of JPY341 per kg but set a tariff-free quota for U.S. and Australian rice outside the minimum access framework. It is considering proposing to the U.S. introduction of an annual import quota of 50,000 tons at the time when the TPP agreement takes effect and expanding it gradually over the period of more than 10 years to 70,000 tons at most.
The U.S. has been demanding that Japan set an import quota of 175,000 tons for U.S.-grown table rice, while Japan was proposing 50,000 tons. The two nations remain far apart, making rice the most controversial issue in the bilateral negotiations. As the TPP member nations are aiming at reaching broad agreement at a ministerial meeting scheduled later this month, Japan apparently acknowledges the need for both parties to seek compromise.
Based on what will be agreed upon with the U.S., Japan plans to set an import quota for Australian rice at roughly 12 percent of the quota for U.S. rice. 12 percent is the ratio of imports of Australian rice to the imports of U.S. rice under the minimum access scheme between fiscal 2010 and 2014. This means if the import quota for U.S. rice is set at 70,000 tons, the quota for Australian rice will be 8,400 tons.
The quota for the U.S. and Australian rice imports will amount to 78,400 tons in total, which Japanese negotiators believe is the maximum limit, according to the sources. Meanwhile, the consumption of table rice in Japan is dropping by 80,000 tons every year and the government is encouraging farmers to shift to production of rice for feed. Moreover, if the government increases purchase of reserved rice, it will lead to increased fiscal burden and likely draw criticism from taxpayers.
As for Vietnam, another major rice producing nation and a member of the TPP talks, Japan has reached basic agreement on Saturday, July 4, to maintain rice tariffs without setting a special import quota for the nation.
(July 10, 2015)