Japan to Buy US Rice Within Overall Limit on Duty-Free Imports
(Bloomberg) -- Japan will handle US demands to buy more American rice within the confines of its existing overall cap on duty-free imports and has no plans to lower its tariffs on farm products, according to Tokyo’s top trade negotiator.
Ryosei Akazawa on Tuesday denied a report by the Nikkei newspaper last week that claimed the US had proposed including cuts to Japanese tariffs on agricultural products in an executive order on tariffs. The report also said Washington wanted to include an expansion of Tokyo’s US rice imports in the order.
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“The agreement didn’t involve lowering tariffs on agricultural products,” he said, referring to the Japan-US trade deal reached on July 22. “I’ve done absolutely no negotiation that would sacrifice agriculture, and there’s no change on that.”
The cancellation last week of Akazawa’s trip to Washington to put the final touches on a $550 billion investment initiative has generated speculation of a difference of views between the two sides that is blocking implementation of the trade deal. The canceled trip came as Japan tries to get the US to follow through with an agreement to lower tariffs on autos and to incorporate a separate 2.5% levy into the new 15% rate. There is still no formal joint document in public detailing the deal.
Akazawa said there’s no gap in how Japan and the US understand the deal. Japan will see what it can do to accommodate US requests to buy more American rice within Japan’s current ceiling for tariff-free foreign rice imports, he said. He added that he has yet to reschedule his Washington visit.
The White House’s fact sheet on the trade deal said that Japan will immediately increase imports of US rice by 75%, with a major expansion of import quotas.
Japan imported 346,000 metric tons of American rice last year, while its overall tariff-free imports of the grain remained at 770,000 tons, according to Japan’s Agriculture Ministry. A 75% increase would raise the US quota to around 600,000 tons, an amount that would require a cut in Japan’s rice purchases from other nations including Thailand, Australia and China.
Tokyo is trying to get the US to implement the cut in auto tariffs and the removal of the stacked levy via an executive order. The US, meanwhile, has yet to see Japanese funds flowing in to help the revival of American manufacturing. It remains unclear how the investment initiative in the US, a key pillar of the deal, will work.
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