【Editorial】 Don’t relax rules on WTO safeguard for farm goods(Aug. 2)

Japan’s Finance Minister Taro Aso has suggested that Tokyo may relax the rules on a special safeguard (SSG), after a surge in frozen beef imports automatically triggered the trade remedy that limits the imports for the first time in 14 years.

“Some say it could prolong the timeframe of application for safeguard measure. Surely there’d be some room to revisit procedural requirements,” Aso told reporters on Aug. 01, the day the SSG took effect.

This issue, as he said, is to be taken up at the U.S.-Japan Economic Dialogue, which is slated for October in Washington.

Aso’s comments are the latest indication that the Japanese government’s position is flexible to change the scope of the SSG mechanism under the World Trade Organization (WTO).

What he means is to avoid the WTO measure being triggered frequently, compared with the new safeguard mechanism established in the Japan-Australia Economic Partnership Agreement (EPA) and the Trans-Pacific Partnership (TPP).

The Japanese government must hold its nerve and resist pressure to relax WTO rules. If there are to be any changes, they should be allowed at the same time as raising the tariff above its pre-Uruguay Round bound rate! People quite often forget why the rules were put in place.

In the WTO system, Japan has the right to invoke the SSG to restrict frozen beef imports temporarily by raising the tariff from 38 percent to 50 percent when the imports rise more than 17% year-on-year in any given quarter. That was the agreement during the Uruguay Round concluded in 1994.

The safeguard measure may have impacts on Japanese gyudon chains such as Yoshinoya and Matsuya as well as some restaurants. Yet, frozen beef accounts for about 20 percent of the total beef imports.

Plus, U.S. beef imports swing in prices heavily and it is hard to predict how much the frozen beef safeguard would directly impact consumption.

In the meantime, domestic producers will likely face stiff competition with cheap imports and be hit significantly as beef imports continue to rise.

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