Limits to Free Trade

Limits to Free Trade

Non-Tariff Barriers in the European Union, Japan and United States

David Hanson

This book explores the growing list of non-tariff trade barriers raised by the US, EU and Japan and assesses the prospects for significant trade liberalization. The author examines the liability of global free trade through a review of the complaints that these three countries raised about each other over a five-year period. He concludes that free trade may be increasingly hampered as barriers are created more rapidly than can be resolved, and that the prospects for significantly strengthening safeguards are limited.

Chapter 8: Issues Concerning Japanese Trade Practices

David Hanson

Subjects: business and management, international business, economics and finance, international economics


INTRODUCTION Trade barriers attributed to Japan fall into yet another pattern. The overriding interests can best be characterized as “relationship protective”. The Japanese government does not impose many formal trade barriers, which are more common in the European Union. There is no particular emphasis on unilateral trade remedies and no exceptional mechanisms in place to defend domestic industries against foreign competition, as is common in the United States. Rather, the Japanese government is accused, primarily by the United States, of permitting and even supporting the emergence of collusive, anti-competitive activities in the private sector. This pattern seems to be most prevalent in agriculture, construction, telecommunications and business services. 2. ISSUES RAISED IN 2002 AND 2007 A summary of this pattern is set forth in Table 8.1, which lists the issues that were raised in both 2002 and 2007. 2.1 Import-related Issues 2.1a Trade administration issues Rice Japan has imposed a quota tariff on imported rice. Up to 682 000 metric tons of rice can be imported each year at a nominal tariff. Import quantities exceeding the quota are subject to a tariff of 341 yen per kg, for an effective rate of around 400 per cent ad valorem. Most of the rice imported under the quota is of medium quality and is purchased by the Ministry of Agriculture, Forestry and Fisheries (MAFF) for blending and industrial use. Most of the other 100 000 tons or so of rice imported is handled by a non-transparent system for rice distribution. As a...

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