Japan Should Not Formally Impose Safeguards on Agricultural Products

|China

The problem may already have been solved by the time this paper appears on the homepage and it could come a little late to be of any use, but I would like to give four reasons for my objection to the formal imposition of emergency import restrictions (safeguards) on agricultural products.

First of all, it is unlikely to improve the competitiveness of agricultural products in Japan so there is a strong possibility that emergency import restrictions may be meaningless. The purpose of the safeguard system is to reform the relevant domestic industry while import restrictions are in place, and to regain competitiveness by improving production efficiency and the quality of products. However, with regard to the agricultural products targeted by the provisional imposition of safeguards, I would have to say that the possibility of realizing this goal is low. Unfortunately, from what can be gathered from brief glimpses at newspaper reports, one receives the impression that approaches to the reformation of production centers are slow and passive.

In the first place, a major question lurks with regard to whether Japanese agriculture can survive as an industry if exposed to global competition. It may be a layperson’s opinion, but I believe it may be necessary for many regions to focus on their agriculture from a different angle: agriculture that protects the environment and ecology, or agriculture as a culture.

The second reason for my objection to these measures is that, as a result of countermeasures imposed by China, Japan will lose more than it gains. The damage suffered by Japan due to the retaliatory tariffs imposed by China was great. For instance, according to a report the Japan Automobile Manufacturers Association (JAMA) submitted to the Liberal Democratic Party’s subcommittee on the automobile industry, the Japanese automobile industry lost $51.2 billion in the latter half of 2001 alone due to the de facto stoppage of automobile exports to China.

Thirdly, Japan should not take measures that may put Japanese companies at a disadvantage, given China’s entry into the WTO and the fact that competition with Europe and the U.S. for the Chinese market will inevitably intensify. According to the abovementioned forecast by JAMA, losses are expected to rise from ¥51.2 billion in late 2001 to approximately ¥480 billion in 2002, reaching ¥640 billion in 2003. The expansion in the loss is caused by the Japanese government’s inability to respond to the opportunities offered by the rapid increase in the imported vehicle market due to China’s entry into the WTO. China’s membership of the WTO is an important opportunity for the development not only of the automobile industry, but also that of many Japanese companies, and getting off to a slow start will be a serious disadvantage.

Fourthly, the majority of people in China wish to maintain a favorable relationship with Japan, mainly from economic considerations, but it would not be wise to give those who oppose the mainstream any ammunition for a counterattack. In China, at present, those who take the stance that the country should not miss the tide of globalization and should promote the market economy in cooperation with Japan and the U.S. have the ascendance in terms of policy decisions. In contrast, however, propaganda is appearing from the new left wing, which emphasizes the negative side of the market economy and insists on utilizing the rationality of socialism. In addition, there is the constant presence of forces that insist on taking a firm attitude towards Japan. I believe that Japan should not give such forces the chance to launch a counterattack on the mainstream by imposing safeguards that deny the merits of free trade and interdependence.

[Translated by ERINA]