Protectionism Trouble among US Japan and EU

▽ New proposals of US= At 25th of July, just before the meeting, US announced new agricultural negotiation issues; ▽25% reduction of custom duty on agricultural products within 5 years ▽abolition of export grants for agricultural products ▽ 20% increase in import by applying low custom duty ▽ restraint domestic grant for agricultural products 5% at maximum.

The proposals by US will be presented as an official agenda for multilateral agreement on agriculture of WTO meeting in Geneva in this week.

The US proposes include stronger demand for opening market than existing negotiations for opening agriculture. So the proposals are analyzed as US intention to take the initiative in the WTO meeting.

The Ministry of Agriculture and Fishery of Japan opposed the proposals and talked “ US proposals don’t look to reach to an agreement. The proposals don’t take into account the fact that each country has different situation on environmental protection, food security and diversified functions of agriculture, etc.

A committee member in charge of agriculture of EU criticized on it “US insists to Japan and EU unilaterally but never mentions its responsibility.”

US decided to increase in domestic grants for agriculture by 6 trillion won for next 6 years, and on the other side, it insists for other countries to abolish export subsidy on agricultural products. So its selfish attitude is blamed severely.

▽ Deduction of custom duty on rice= the proposals demand to decrease custom duty uniformly including rice that used to be treated as separated negotiation issue. It means that the demand for opening rice market on Korea, Japan, etc will be stronger in the future.

Ann Veneman, the minister of US Department of Agriculture demanded for opening rice market with comments “ rice is an important issue for Japan, but the deduction of custom duty on rice will be benefits to Japanese consumers.”

In accordance with Uruguay Round, Japan imports 7.2% of total consumption on the base of Minimum Market Approach allowing import without custom duty. However Japan applies heavy custom duty (490%) on excessive import of rice.

Japan analyzed that US proposal is not just as opening rice market but imply more than that. So Japan is anxious about the second typhoon by opening rice market.

Agriculture negotiation of WTO that began in January of this year will establish basic principle by March of the next year. In the 5th Ministerial Meeting, each country will present of opening timetable and reach the final agreement by 2005.

Young-Ee Lee yes202@donga.com