Timmy Elsewhere

At the GI.

Globalisation, trade restrictions and the rice trade. Since I wrote that but before it was published EU Referendum has had an interesting post about it. Why was Japan buying rice it had no intention of using?

Behind this is a tale which verges on the surreal, going back to the early eighties (and perhaps before) when the United States was getting extremely concerned at its balance of trade deficit with Japan. By the late eighties, this had become politically highly contentious and had focused around reciprocal deals on the sale of US rice to Japan, as a way of compensating for the inflow of manufactured Japanese goods.

To cut a very long story short, in 1995, Japan eventually caved in to huge pressure and, under the aegis of the WTO "Uruguay Round", agreed to accept from the US some 770,000 tons of rice a year, by-passing its protective tariffs set at 490 percent, which had kept the Japanese market closed to imports.

However, there was a slight problem. Japan was is self-sufficient in rice and there was no domestic market for US imports which, in any case were a different variety and regarded as inferior by Japanese consumers. Despite continued efforts of US growers to make their product more acceptable, only small quantities of the imported rice was used – and then only for manufacturing – or allowed to rot. The one thing Japan was not allowed to do was re-export the product.

I was aware of the basic reasoning, but not the details there.

Rather goes to show the insanity of trade deals really: can\’t we simply declare unilateral free trade and get on with things?

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