Japan raises tariff on our beef

Reviewed by Hitoshi URABE

Article:
"Japan raises tariff on our beef"
Herald Sun, Australia
http://www.heraldsun.news.com.au/common/story_page/
0,5478,6838571%255E401,00.html

Comments:

A very appropriate title, especially as it comes out of Australia. In fact, many in Japan truly sympathize with beef exporters around the world, not that we know them personally, but sloppy domestic politics in Japan have created yet another group of victims, this time in Australia and other beef exporting economies.

The Japanese Government, or The Ministry of Agriculture, Forestry and Fisheries to be precise, will increase the tariff on imported beef as of August 1, from 38.5% to 50%. The ministry claims that this is not a policy issue but merely an administrative action as demanded by relative laws which in turn conform to the safeguard stipulations of WTO agreement. The story is that for every quarter, when volume of imports exceeds 117% of the same quarter of the previous year, a tariff increase kicks in automatically. As the recent quarter of April-June saw an increase of 34% increase from the 2Q last year, the ministry explains that it was just a matter of procedure to increase the tariff.

But what was the cause of the increase? And who is to benefit from the tariff hike?

It was in September of 2001 when BSE, better known as mad-cow disease, was spotted in Japan. People naturally became concerned and consumption of beef dropped. In fact, poor handling of the issue by the government, lead by the farm ministry, exacerbated the problem by making a series of hasty statements saying that the situation became under control, only to be proven false later, and that for a number of times. In effect, the government had delayed the normalization process, which took about a whole year, or until fall of 2002, driving many restaurants focused in serving beef out of business during the while.

Indeed, import of beef during 2Q of last year had dropped almost 30% from the year before, which means that this year, the volume has simply recovered to the 'normal' levels of 2001 and before. It is then hardly, if at all, justifiable to penalize the import this year. Furthermore, it means that it was obvious from a year ago that this sort of situation would occur, and despite public appeals made by various sectors of industries that handle beef, the government had deliberately failed to act, where one cannot suspect if there were no hidden, and perhaps malicious, intent on the policymakers' part.

And who is to gain? Consumers must pay more, merchants, under the circumstances, would not be able to raise selling prices proportionate to their purchasing prices, importers who fear decrease of sales cannot raise the price relative to the tariff hike. On the other hand, the government has no real cause, at least this time, to give out the money to local producers as they were not harmed by the import, in fact they have also been enjoying the recovery from the turmoil caused by BSE. Exporters in foreign countries have naturally and already have become furious, provoking their governments to take the same stance.

There have also been reports that the government has 'asked' the retailers not to raise prices of beef sold to consumers, as the government does not want to give the impression that they are the bad guys. So much for Japan's 'market economy'.

Japanese government, both the lawmakers and the bureaucrats, have deliberately ignored the fact that Japan is one of the largest importers of farm produce, a reflection of the reality that the people depend on food from abroad to survive. It should be a natural responsibility of the leaders, therefore, to secure imports of food for the people. In reality, though, what they, especially those involved in farming, have been doing is to oppose imports, and in some cases have gone so far as to simply refuse to discuss the matter with their counterparts from foreign countries. WTO farm ministers' meeting held earlier in the week was a good opportunity for the policy makers to do some soul-searching, but it seems all they did was to confirm their archaic doctrine, as endorsed by powerful vested interests.