The rice issue has caused a major setback in the Japan-US trading talks. A Nikkei article claims that the Trump administration wants Japan to import American rice and Tokyo doesn’t want it.
Japanese officials have called this request completely out-of-line, saying that it violates their farm policy and previous agreements.
The Japanese top negotiator for trade has just cancelled a trip planned to the US.
The current situation is preventing the countries from settling on the specifics of a broader agreement between them in terms of trade and investments.
It may seem that rice is a minor issue but, in reality, it has become much bigger than expected.
Rice purchase demands stalls trade talks
The timing of this rice controversy couldn’t be worse. Japan and the US had been making progress in July on a major trade agreement that reduced American tariffs for Japanese imports including cars to 15%.
The government was also helping them to develop a $550 billion package of investments.
All seemed well until Trump’s team suddenly added this demand regarding rice purchases.
This is a complete contradiction to what Japan believed they agreed upon. Originally, it was thought that Japan would not have to change its import tariffs for agricultural products.
Ryosei Takazawa decided then to cancel his Washington visit. Japanese officials say this is exactly what they wanted to avoid when it came to meddling with their own markets.
Japanese agricultural and economic officials have reacted strongly to the US, saying that forcing them into buying more rice can seriously harm their farming sector.
Japan is not going to abandon its agricultural protection policies, which it has been using for decades.
Tokyo has drawn a line in the sand. They want to maintain their current system whereby certain rice imports are tariff-free. But they won’t move beyond this.
Japan: Implications, reactions and reaction
Japan is beginning to feel the political effects of the trade crisis.
Yuichiro Taaki, the opposition leader Yuichiro is going against the government and asking why it’s so secretive in what they are actually doing during these negotiations.
Tamaki has stressed that moving ahead without putting everything in writing is risky. His concern is for Japan’s auto industry which relies on predictable rules of trade to plan their business.
Automakers become nervous when trade relations are tense. They worry about their supply chains and investments.
The whole fight over rice shows the evolution of Trump’s trading strategy. The trade war that started with China is now affecting allies such as Japan.
The US no longer just wants to talk about tariffs, but also about specific products that other countries must buy from American farms.
The information in this post US-Japan Trade Talks Fail Over Trump’s Rice Demand: Here’s What We Know may change as new developments unfold.
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