An Urban's Rural View

Back in the 1980s, when U.S.-Japan trade tensions were at their tensest and I was covering Japan for The Wall Street Journal, I asked a senior Japanese politician why his country all-but-banned imports of American beef. Simple, he said. We Japanese can't digest foreign beef; our stomachs are built differently than yours.

This bit of self-serving faux physiology was widely believed in Japan back then. It's hard to believe anyone believes it today. Over the last couple of decades the country's beef market has gradually opened. Although Japan's embrace of American beef was set back a decade ago by mad-cow disease, the Japanese eat a lot of the stuff, enough for Japan to be our largest beef export market.

And now, with the mad-cow restrictions just eased, there are signals Japan may be willing to open the market even further.

The Trans-Pacific Partnership negotiations Japan wants to join aim to create a free-trade agreement among Pacific-rim nations. A Bloomberg story from Tokyo (http://tiny.cc/…) speculates that if Japan can continue protecting any of its products in the TPP talks, it will protect rice, sugar and dairy products. In exchange, the story suggests, Japan will reduce or eliminate its barriers on beef and wheat.

Japan's current tariff on beef is 38.5%. If it's reduced to zero the country's beef imports would likely jump 40% and foreign beef would displace half of the domestic produce, a research-institute expert told Bloomberg. American beef accounted for 26% of Japan's $2.3 billion in 2012 beef imports, according to Japanese statistics quoted by Bloomberg, with Australian beef at 62% and New Zealand at 6.1%.

Japan's tariff on wheat is 252%, but the country already imports 90% of its wheat, with more than half of that coming from the U.S.

Japan's tariff on rice is 778%. It's 328% on sugar and 218% on powdered milk.

The signal that Japan would be willing to liberalize beef and wheat to protect rice, sugar and milk was attributed to Shinichi Shogeni, an ag professor who has been a key adviser to the prime minister on food security. "Japan may be able to protect about 5% of its total goods in the TPP talks," Shogenji said in an interview on March 12. "Rice is the national staple, sugar is vital to Okinawa prefecture and milk is what our kids drink."

Even if Shogeni is right about how Japan intends to negotiate in the TPP, there's no guarantee the country will get its way. Refusing to negotiate on any sector will not go over well with Japan's trade partners. There will be a lot of pressure on American negotiators to insist the talks be "comprehensive." Japan's high walls to foreign rice, in particular, have long been a sore point.

A number of Congressmen don't even want Japan to be included in the talks. They're unhappy that the country's auto market has historically had so many barriers to American cars and don't want to see us lower our remaining tariffs on Japanese autos.

Still, it's intriguing that the country that didn't have the stomach for foreign beef three decades ago is now talking about consuming a lot more of it.

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