the role of foreign pressure (gaiatsu) in japan’s … contents list of tables iv external...
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The Role of Foreign Pressure (Gaiatsu) in Japan’sAgricultural Trade Liberalisation
Aurelia George Mulgan
247
A U S T R A L I A – J A P A N R E S E A R C H C E N T R E
PACIFIC ECONOMIC PAPERS
NO. 266, APRIL 1997
The Role of Foreign Pressure (Gaiatsu) in Japan’sAgricultural Trade Liberalisation
Aurelia George MulganUniversity of New South Wales
Australian Defence Force Academy
A U S T R A L I A – J A P A N R E S E A R C H C E N T R E
PACIFIC ECONOMIC PAPER NO. 266
APRIL 1997
ii
© Australia–Japan Research Centre 1997
This paper also appears in Pacific Affairs, June 1997 and is extracted from Dr George
Mulgan’s forthcoming volume, Interest Politics in Japan: the Agricultural Sector in
Transition.
This work is copyright. Apart from those uses which may be permitted under the
Copyright Act 1968 as amended, no part may be reproduced by any process without written
permission.
Pacific Economic Papers are published under the direction of the Research Committee
of the Australia–Japan Research Centre. Current members are:
Prof. Stuart Harris (Chair)The Australian NationalUniversity
Prof. Sandra BuckleyGriffith University
Prof. Ken DavisThe University of Melbourne
Prof. Peter DrysdaleThe Australian NationalUniversity
Prof. Ron DuncanThe Australian NationalUniversity
Assoc. Prof. ChristopherFindlayThe University of Adelaide
Prof. Ross GarnautThe Australian NationalUniversity
Prof. Keith HancockAustralian IndustrialRelations Commission
Prof. Jocelyn HorneMacquarie University
Prof. Warwick McKibbinThe Australian NationalUniversity
Prof. John NevileThe University of NewSouth Wales
Prof. Merle RicklefsThe Australian NationalUniversity
Prof. Alan RixThe University ofQueensland
Mr Ben SmithThe Australian NationalUniversity
Papers submitted for publication are subject to double-blind external review by two
referees.
The Australia–Japan Research Centre is part of the Economics Division of the Research
School of Pacific and Asian Studies, The Australian National University, Canberra.
ISSN 0 728 8409
ISBN 0 86413 208 5
Australia–Japan Research Centre
Research School of Pacific and Asian Studies
The Australian National University
Canberra ACT 0200
Telephone: (61 6) 249 3780
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Email: [email protected]
Edited by Gary Anson
Typeset by Minni Reis
iii
CONTENTS
List of tables ....................................................................................................... iv
External pressures and national sovereignty ....................................................... 3
External pressures and domestic policymaking ................................................... 5
External pressure and policy change in Japan ..................................................... 8
US pressure and Japan’s agricultural trade liberalisation .................................. 11
Conclusion ........................................................................................................ 36
Notes ................................................................................................................. 38
References ......................................................................................................... 50
iv
TABLES
Table 1 The main demand/response sequence in the first phaseof Japan’s agricultural trade liberalisation ...................................... 13
Table 2 The main demand/response sequence in Japan’s beefand citrus liberalisation ................................................................... 14
Table 3 The main demand/response sequence in the liberalisationof 12 miscellaneous agricultural product categories ...................... 17
Table 4 The main demand/response sequence in riceliberalisation ................................................................................... 19
1
Economic policy change within states is increasingly being driven by externalpolitical and economic pressures consequent upon the internationalisation ofmarkets, the growth of economic interdependence and the increasing effectivenessof multilateral regimes as sponsors of trade liberalisation. In the context of Japan’strade relations with its international trading partners, the term gaiatsu [foreignpressure] has gained wide currency to signify the demands and requests of otherstates for Japan to institute various policy adjustments to satisfy external interests.The historical record shows that gaiatsu sourced mainly in the United States andapplied bilaterally and through the GATT has been the primary agent of transfor-mation in Japan’s agricultural trade policies. It provided both the initial impetusand continuing momentum for market opening, as well as a convenient focusaround which domestic pro-liberalisation forces could mobilise, thus influencingthe domestic political equation by altering the relative balance of power betweenpro-agricultural and anti-agricultural protection groups and changing the calcu-lations of the Japanese political leadership with respect to the likely political costsand benefits of change. The utility of gaiatsu as an agent of change in Japan’sagricultural trade policies illustrates how the domestic politics of a state can bepenetrated by external political pressures which significantly alter the policyparameters for national decisionmakers and the relative power configurations ofdomestic groups. This suggests that intra-state politics is no longer just geared todomestic interests. The growth of economic interdependence and the strengtheningof international trade regimes is expanding the zone of political accountability fornational governments, forcing them to accommodate the interests of other stateactors as well as the collective interests of international groupings.
Introduction
All states lie at the confluence of external and internal pressures. These pressures coincide and
conflict in the domestic policy process, requiring national governments to balance the demands
and interests of actors in both the domestic and international environments. Over time, factors
such as advances in technology, the internationalisation of markets and the expanding reach of
multilateral trade regimes have magnified the relative impact of external pressures on nation-
states, mandating adjustments on the part of domestic authorities and in some cases undermining
national systems of control (Vogel 1994, p. 3).
THE ROLE OF FOREIGN PRESSURE (GAIATSU) IN JAPAN’S
AGRICULTURAL TRADE LIBERALISATION
2
The first section of this paper begins by codifying the major sources of international
economic and political pressures on states with an emphasis on the external determinants of
economic policy choice. Much of the discussion centres on the growth of international economic
organisations and how they influence the economic and trade policy preferences of nation-
states.
The second section advances a number of propositions about how external pressures can
be ‘functional’ to domestic political processes by providing governments with supplemental
powers to achieve reformist objectives and by offering side-benefits not otherwise deliverable
by domestic political actors. The paper hypothesises about the conditions in which external
pressure is more likely to be an effective agent of policy change than others. Such conditions
include the potential of gaiatsu [foreign pressure] to alter the relative power configurations of
potential winners and losers from change as well as substitute for domestic system capacity to
self-initiate change.
The third section of the paper uses the example of Japanese gaiatsu to elucidate the
utility and effectiveness of external pressure as an agent of policy change within states. Gaiatsu
typifies the broad trend towards the internationalisation of domestic policymaking: external
factors increasingly constrain the options for national authorities at the same time as providing
greater opportunities for domestic policymakers to implement reform. In the Japanese context,
gaiatsu signifies the widely observed phenomenon of the Japanese government delivering
policy adjustments in response to the demands of external actors. Japanese susceptibility to
gaiatsu is explained in terms of factors stemming from Japanese national priorities and factors
inherent in the Japanese political process.
The remaining sections of the paper present a case study of gaiatsu in Japan’s agri-
cultural trade relationship with the United States. The paper discusses the role gaiatsu played
in the sequence of agricultural market-opening decisions made by the Japanese government over
the thirty-year period from the early 1960s to the early 1990s. It evaluates the policy impact of
gaiatsu relative to domestic pressure (naiatsu), how domestic actors sought to harness gaiatsu
to achieve agricultural policy trade reform and how the United States sought to penetrate the
Japanese domestic policy process and enhance its influence. The paper concludes with an
assessment of gaiatsu as a specific type of linkage between domestic and international politics.
3
External pressures and national sovereignty
Much of the recent work on the impact of international factors on domestic policymaking can
be found in the burgeoning literature on ‘globalisation’,1 which analyses the domestic effects
of external economic pressures and how states are ceding economic policy sovereignty to
international markets and non-state actors. One of the central propositions in this work is that
integration of national economies into the global economy is reducing the political autonomy
of states and narrowing the scope for domestic policy choice by setting fundamental parameters
within which governments can act. The deregulation of foreign exchange controls, for example,
challenges the capacities of governments to control international capital flows and enables
international financial markets to undermine the effectiveness of national monetary policies.2
In industry sectors the internationalisation of production by multinational corporations is
subordinating national economic strategies to international competitiveness (McMichael 1993,
p. 200).3 Mature economies like Japan are being transformed by industry migration while in
a number of developing countries direct foreign investment is driving the industrialisation
process on which economic growth is contingent.
The proliferation and strengthening of multilateral trade regimes have posed another
major challenge to the sovereign powers of national governments. International economic
organisations frequently require prior harmonisation of domestic systems to agreed rules as a
condition of entry as well as imposing continuing obligations on members to adhere to
organisational norms. Both requirements can shape the external behaviour of states as well as
their domestic policy choices.
The General Agreement on Tariffs and Trade (GATT), for example, imposed entry
qualifications on member-states as well as the obligation to observe certain principles in the
conduct of trade.4 Although historically the GATT sustained more criticism for its failure to
reduce trade barriers than for the market discipline it imposed as an international trade regime,
GATT rules were perceived, at least in theory, as inserting themselves into the domestic policy
apparatus of member-states.5 The status of these rules was essentially quasi-legal: they
functioned ‘as an external constraint on governments’ trade policy options’ (Carmichael 1986,
p. 351)6 substituting ‘universal … rules for national political-economic regulation’ (McMichael
1993, p. 198).
4
International economic organisations may also subject domestic systems to processes of
external review and judgement. The GATT’s Trade Policy Review Mechanism, for example,
functioned as a economic intelligence-gathering arm of the Secretariat, facilitating detailed
assessment of trade protection in member-countries. Successive rounds of multilateral trade
negotiations, particularly the Uruguay Round (UR), further exposed the protectionist policies
and institutions of member-states to international scrutiny and debate as part of the attempt to
eliminate trade barriers and other domestic impediments to international trade.7 Issues such as
trade liberalisation were commonly framed in terms of the elemental tension between internal
and external pressures (McMichael and Kim, forthcoming).
Similarly, one of the main functions of the Asia Pacific Economic Cooperation (APEC)
forum is reputedly its role in reviewing member-states’ trade policies as a means of pressuring
governments to relax controls on imports.8 On a more formalised basis, the Organisation for
Economic Cooperation and Development (OECD) undertakes regular macro-evaluations of
member-states’ economies against a set of efficiency criteria.9 Such external publicity can
become a source of inducement for governments to change their economic management policies.
Lastly, international economic organisations may negotiate agreements amongst mem-
ber-states to deal with commonly identified problems, but which may predicate various
domestic adjustments to achieve a mutually agreed solution. Signature to the UR agreement, for
example, enabled national governments to trade-off greater prosperity against ‘loss of direct
control … over the levers of policy’ (Bayne 1991, p. 305). In member-states such as Japan, it
required later passage of domestic legislation which harmonised state policies with the package
of new trade rules. The formation of the World Trade Organisation (WTO) further institution-
alised arrangements to subject national policies to international disciplines and international
process.
Bilateral and multilateral bargaining processes occurring outside formal organisational
settings also play an important role in facilitating the transfer of external political and economic
pressures to domestic systems. Negotiations between states commonly put pressure on national
authorities to undertake changes in domestic policy settings in order to expedite international
agreements.10 In some cases, regular international gatherings (like the annual economic
summits of the G-7) are organised for the express purpose of coordinating the macroeconomic
policies of member countries (Iwao 1986).
5
External pressures and domestic policymaking
Compensating the partial loss of autonomy for national authorities can be the supplemental
powers that external demands and obligations bring to domestic political strategies. Foreign
pressures can be domesticised as routine variables in the functioning of national political
systems. For example, by placing obligations to international economic organisations between
themselves and domestic claimants, governments can wield external requirements as a buffer
to escape domestic pressure and to explain their inability to concede to the demands of domestic
pressure groups. Governments can also exploit the deliberations and judgements made by
international organisations to bolster their cause in domestic policy conflict. The reforming and
constraining powers of international rulings can be used to counter the influence of domestic
groups opposed to change,11 bring about reforms resisted by domestic interests, and control
domestic lobbies. Pressures arising from international negotiation processes can also provide
a focus around which domestic interests can develop and press their case to incumbent
governments for changes in policy direction.12
In some cases, domestic actors may form alliances with external agents to resist domestic
pressures they would find difficult to ignore without outside assistance. In theory, this has been
part of the rationale for the G-7 summits which have uniformly and collectively asserted an anti-
protectionist stance in an endeavour to bolster the position of government leaders wishing to
move towards freer trade but faced with domestic demands to protect specific sectors (Bayne
1991, p. 307).
GATT rules and agreements have lent themselves even more powerfully to the domestic
political purposes of governments who have used them ‘to support actions to open up their
national economies and counter the arguments of those who oppose liberalization’ (Oxley 1990,
p. 5).13 The utility of international pressure in forcing change on reluctant domestic interests
was widely acknowledged in the case of the UR agricultural trade negotiations.14 The
‘comprehensive negotiating mandate’ for agricultural trade embodied an agreement by mem-
ber-states to ‘deal directly with their domestic agricultural policies and the adverse trade effects
of those policies’ (Hathaway 1987, p. 116). In placing agriculture high on the UR agenda,
GATT contracting parties hoped that ‘the presence of new GATT rules limiting agricultural
protection would make it easier for governments to deny farm lobbies further support —and
even to wind back existing support’ (Anderson 1992, p. 59).15 These changes were regarded
6
as ‘easier politically if done multilaterally’ (Hathaway 1987, p. 2) given that ‘unilateral reform
[was] difficult and risky’ (Hathaway 1987, p. 115).
Domestic reform negotiated through such international trade agreements may also assist
governments overcome fears of loss of international competitive power and market share
consequent upon unilateral action, a prisoner’s dilemma avoided by being party to a successful
multilateral liberalising agreement.16 In other words, distinct advantages accrue to government
and non-government reformers in pursuing domestic policy change through international
bargaining processes. In these cases, domestic and international political processes merge: the
external dynamic may become integrated into the considerations and actions of agents in the
domestic policy process.17
Foreign economic and political pressures arising from state participation in international
economic organisations and bargaining processes can, therefore, be a powerful agent of change
in domestic systems, impacting in varying degrees on the national stakeholders, altering the
domestic political calculus, transforming relationships between domestic sectors and govern-
ments (Vogel 1994, p. 2) and mandating some sort of policy response from national govern-
ments. While such pressures and demands may compromise the policy autonomy of states,
national authorities can be compensated by the manifest advantages of leveraging outside
influences for domestic political purposes.
The power of external pressure to engender change in domestic economic systems will
logically vary across states, intra-state sectors and policy areas. Certain conditions may be
conducive to foreign pressure being a more effective agent of change than others. For example,
foreign pressure is likely to yield positive results when, ceteris paribus, the perceived benefits
of change to states outweigh the perceived costs of maintaining the status quo. When gains only
arise for the agent of pressure and not for the recipient state, it is likely that resistance to outside
demands will be very high.18 Furthermore, acceding to external pressure may sometimes realise
benefits that could not be generated by domestic action alone. This acts as an incentive for
compliance. The power of external pressure to bring about change will thus be enhanced to the
extent that concessions to external pressure deliver potential benefits that would not have been
possible if change solely originated in domestic policy initiation.19
The perceived costs and benefits of change can, in turn, be influenced by the nature of
power relationships between the agent of pressure and the recipient state. Relationships of
asymmetrical interdependence20 can magnify both the leverage of the external agent and the
potential costs of maintaining the status quo, with the probability that dependence will be
7
leveraged to extract concessions by means of threats of sanctions and other forms of
retaliation.21 Where one state is normally the recipient of various benefits from another,22 it
is more likely to accede to the latter’s demands.
Calculations of the potential gains and losses to recipient states, however, are rarely
simple. They involve not only considerations relating to the perceived national interest, but also
the gains and losses to individual domestic sectors, institutions and societal groups. As there are
almost always domestic winners and losers from change, the consequences of change will
usually produce a mixed picture of costs and benefits for various parties within the recipient
state.23 External demands inevitably impact differently on national stakeholders, and in this
way alter the domestic political calculus. Indeed, the differential impact of the costs and gains
of change has been described as the ‘dilemma of reform’ (Bayne 1991, p. 307).
Considerations relating to costs and benefits also have varying implications for the
political process depending on the power and political participation of the various groups and
sectors whose interests are affected. When costs and benefits are relatively concentrated, those
groups or sectors affected can be expected to exert stronger influence on the political process
than when costs and benefits are diffused.24 The issue of trade protection highlights this
‘asymmetrical distribution of benefits and costs’ (Bayne 1991, p. 307). In this case,
[The] benefits of protection are concentrated in the sector being protected. The
benefits of removing protection and increasing competition are greater in aggre-
gate: lower prices and public spending; and a shift of labour and capital from
inefficient to efficient sectors. But these benefits are spread widely through the
economy as a whole. So the lobbies in favour of protection are more vocal and better
organized, because their very livelihood may be at stake (Bayne 1991, p. 307).
Judgements about costs and benefits will thus depend on the relationship between
governments and the potential winners and losers of change, and the relative power positions
of these groups in the domestic political system and their participation rates. Where the potential
losers are powerful elements of the domestic system with close ties to political leaders, it is likely
that accession to external pressures will be difficult because of the effective resistance that the
losers can mount and the incentives for political elites to respond to their appeals.
Certain domestic political configurations also make some states more responsive than
others to outside pressures. The most critical variable is political system capacity. Where
8
political leadership is weak or the state lacks the necessary policy infrastructure, its hand may
be forced by outside pressures it finds itself unable to resist. Alternatively, domestic leaders may
come to rely on such pressures to encourage and engineer change because they lack the capacity
to initiate change themselves. In some cases politicians may hide behind external demands in
order to disguise their true political intentions, publicly resisting foreign pressure, but privately
agreeing with its fundamental aims. When foreign pressure substitutes for domestic political
leadership, it can become the main agent of policy change.
External pressure and policy change in Japan
The case of Japanese gaiatsu provides a useful illustration of a state subjected to strong external
pressures for policy change and highly reactive in its mode of international behaviour. Gaiatsu
has been a prominent feature of Japan’s relations with other state-actors and institutions in the
international system. Gaiatsu is always accompanied by a demand or request that Japan change
in some way. Japan exhibits a repetitive pattern in which the national government delivers
policy change in response to a specific set of demands from external actors. The implications
of these external demands and requests for existing policies in many instances have been fairly
profound.
The utility of foreign pressure as an agent of change in the Japanese case derives from a
number of factors. The historical legacy of war makes Japan highly susceptible to foreign
criticism, fearful of international isolation and inclined to emphasise the need for international
acceptance. Japan’s dependence on external markets and resource supplies compounds these
fears of international isolation.25 Japan’s international behaviour has registered a high degree
of sensitivity to the views and judgements of other nations and its international rhetoric has
placed importance on international contributions and commitments. (See George 1992a, pp.
13–16; 1992b, pp. 3–18.)
Japan’s sensitivity to foreign pressure has been captured in the so-called ‘reactive state’
model which argues that Japan’s foreign economic policy is broadly reflective of external
pressures and demands and that ‘the impetus to policy change is typically supplied by outside
pressure’ (Calder 1988a, p. 518).26 Japan is described as lacking inclination to undertake
independent policy initiatives and as acting principally in response to the demands of other
states, particularly the United States. In the terminology of two-level game theory, it has a large
domestic win-set (Nagao 1991, p. 91),27 meaning that its political system can positively
9
accommodate a very wide range of external demands. A similar notion is captured in the
description of Japan as a ‘diplomatically weak state’.28
Japanese resistance to outside pressure is further compromised by its weak capacity for
political leadership.29 Indeed, Japan has been called ‘the leaderless state’ with ‘outside
pressure … [filling] the leadership gap’.30 In one way or another, the top contenders for power
— the ruling party or parties, the government executive (the Prime Minister and Cabinet), the
bureaucracy, the opposition and influential lobbies — all seem to have crucial interdependencies
that prevent any one group from assuming predominance over the rest. As a result there is no
consensus, analytical or otherwise, about who is in charge in Japan.31 Leadership is shared
amongst a group of players, which makes it difficult for any single actor or group to assume the
policy initiative. At the theoretical apex of power stands the Prime Minister, but his primary role
is to serve as a mediator in balancing power and interests among factions,32 party policy
groupings and administrative agencies rather than as a real political leader. The political
convention of consensus policymaking33 which such a system supports and reflects further
handicaps policy initiative and inhibits the emergence of strong leadership.34 Japanese Prime
Ministers have generally demonstrated a passive and reactive approach to leadership, which
reduces their potential to effect policy change (Hayao 1993).
The limited capacity of the domestic political system to self-initiate change also mirrors
the power of vested interests in Japan. The structure of the electoral system pits members of the
ruling party or parties against each other at the polls, making them highly dependent on the
voting and financial power of special interests whose electoral standing has in some cases been
magnified by an electoral system which remained largely unreformed until 1994.35 Because the
policy flexibility of political leaders is in inverse ratio to the degree to which they are captive
of special interests, the micro-political incentives of politicians in the Japanese case have tended
to favour the status quo because of the potentially high political costs of any change that
challenges vested interests. The bureaucracy and its associated agencies also represent strongly
institutionalised interests concentrated within narrow ministerial jurisdictions. They resist any
changes that threaten their powers to regulate and to subsidise ‘which usually means unyielding
adherence to the status quo’ (Fukushima 1993, p. 60). Weak political leaders find it difficult
to override either entrenched bureaucratic or special interests.
Because politicians and bureaucrats are compromised as agents of change, this role
logically falls to non-governmental forces and actors. In this context, much attention has been
paid to the powers of gaiatsu in Japanese politics. Gaiatsu is credited with being the only force
10
with sufficient strength to overcome the institutionalised immobilism of the policy process and
the power of vested interests. According to Inoguchi (1987, p. 58) ‘Pressure from overseas
seems to be the only force that can transcend the framework of Diet operations, strike down the
vested-interest syndicate, and remodel Japan into a country committed to a fair society and eager
to contribute to the international community’. As Lincoln (1993, p. 210) puts it, gaiatsu has
become the dominant paradigm for dealing with difficult decisions. In those areas resistant to
change, outside pressure is necessary to ‘swing the balance’ (Lincoln 1993, p. 209).
The dominant source of foreign pressure on Japan has been the United States. Gaiatsu
has been a widely observed and extensively documented feature of US–Japan relations, evident
not only in the contemporary relationship but also historically. Japan has endured concerted,
sustained and unrelenting pressure from the United States to alter its domestic policies and
institutions in order to accommodate a range of American economic and political interests. US
demands and requests have been presented in a range of bilateral and multilateral negotiating
contexts, with US–Japan relations exhibiting an entrenched pattern of American demands
followed by Japanese concessions.36
Summary descriptions of the US role in the Japanese policymaking system vary, but all
stress the importance of the United States as an agent of policy change (see, for example,
Sakakibara 1995). One analyst observed that ‘the only opposition party capable of backing
systematic reform is the U.S. diplomatic establishment’.37 Another argued that ‘on economic
issues Washington has long been the largest unelected opposition party in Japanese politics’
(Buruma 1994). Perhaps the most comprehensive claim for gaiatsu was made in the observa-
tion that when decisive leadership was required, the ‘necessary impetus came from the United
States, which time and again applied the pressure needed to nudge the Japanese government out
of inaction’ (Tokuyama 1991, p. 40).
The Japanese policies most frequently targeted by the United States have been defence
and market access issues,38 although American pressure has been used to explain a diverse
range of policy outcomes.39 One study detailing American demands and Japanese responses
across a range of economic sectors and commodities concluded that ‘U.S. pressure was largely
effective in persuading vested interest groups that obviously oppose less protection from
imports, or in dismantling regulations that increase oligopolistic rents’ (Ito 1993, p. 398). A
more general description of the link between American pressure and Japanese policy shifts
observed that these were ‘as a rule not … spontaneous initiatives but rather responses to
gaiatsu’ (Inakage 1992, p. 55). The same conclusion was reached elsewhere: ‘Under pressure,
Japan has accommodated the United States on many occasions’ (Hollerman 1980, p. 222).
11
Other assessments have not been quite so categorical, suggesting that American pressure was
not necessarily uniformly productive across sectors and issues.40 Nevertheless, the impact of
US gaiatsu on Japanese policy evolution has clearly been such that ‘provision of an American
dimension is necessary to interpret Japanese developments’.41
A number of factors account for the utility and effectiveness of American pressure in
relation to Japanese policymaking. The particular vulnerabilities of Japan in its most important
bilateral relationship compound the weakness of the Japanese state to American gaiatsu. As
noted earlier, the power of foreign pressure is partly a function of the nature of the relationship
between the agent and recipient of pressure and can be significantly amplified by dependencies.
Japan undeniably retains quite significant historical dependencies vis-à-vis the United States.42
The bottom line in the US–Japan relationship remains the American security guarantee, and —
increasingly as Japan’s economy has internationalised — the American ability and Japanese
inability to defend its overseas assets and investments.43
Moreover, on any bilateral economic and trade issue between the two states, fundamen-
tally at stake for the Japanese side has been the continuing importance of the United States as
an export market,44 not only for manufactures produced in Japan but also for those produced
in Japanese companies in East Asia.45 A fundamental principle of postwar Japanese political
economy has been the need to preserve the American market in order to secure stable growth
in the Japanese economy, which provided the basis for rising national incomes and living
standards (Fujitani 1986, p. 102). Other factors cited to explain the extent of American pressure
on Japan have included the deep interdependence between the two economies46 and the large
and enduring US trade deficit with Japan.47 According to Lincoln, such factors have ‘given
political legitimacy in Japan to pressure from the United States as a motivation for domestic
policy decisions’.48 On the Japanese side, there has been widespread acceptance that gaiatsu
was a phenomenon Japan had to tolerate for the sake of its relations with the United States. Even
amongst representatives of groups and sectors targeted by gaiatsu demands, there has been
reluctant acknowledgment that the Japanese government often had little choice but to concede
in the end.
US pressure and Japan’s agricultural trade liberalisation
The consensus amongst analysts of Japan’s agricultural trade policy is that foreign pressure
(particularly US pressure) has been the single most important factor accounting for market
opening. George and Saxon (1986, p. 101) argued that Japan’s agricultural trade liberalisation
12
from the 1960s and early 1970s onwards ‘represented a response to external pressures for
import liberalisation as required under the rules of the GATT’.49 Rosencrance and Taw also
observed that ‘In response to American political pressure, Japan … started to open its domestic
market to admit industrial and agricultural goods from other countries’. Tokuyama (1991, p. 41)
reached a similar conclusion that ‘Tokyo … yielded to pressure from Washington for much-
needed liberalization of agricultural markets’. Hayami (1994, p. 33) also listed gaiatsu
(together with Japanese government financial authorities) as the most effective force in
lowering Japan’s agricultural protection. He argued, for example, that foreign pressure resulted
in the minimum access settlement on rice at the GATT.
These general observations are based on historical evidence. The pervasive impact of
gaiatsu is etched in agricultural trade developments over the course of several decades.
Protracted negotiations between the United States and Japan produced agreements to liberalise
the specific commodities in question either partially or totally as shown in Tables 1 to 4. The
tables document the sequence of American gaiatsu and Japanese responses over the period
1960–93. Table 1 covers the first phase of Japan’s agricultural trade liberalisation from 1960
until the early 1970s; Table 2 highlights the phases in the extended process of liberalising
Japan’s beef and citrus markets; Table 3 focuses on US–Japan negotiations with respect to 12
miscellaneous agricultural product categories targeted as a discrete group by the United States
from 1982 until 1988; and Table 4 reviews the extended dispute on the issue of Japan’s rice
market opening, ending with the 1993 UR Agreement on Agriculture.
Other agricultural exporting nations such as the EC, Australia and New Zealand
supplemented US pressure with their own market access requests. While pressure from these
other countries might have served to amplify and underline American demands for agricultural
market access, as the chronicle of Japan’s market opening shows, the Japanese government
directed its responses consistently to US demands, and, in that sense, it was American pressure
that proved decisive in extracting Japanese concessions.
In some cases the Japanese response to American demands was patently bilateralist,
underlining the selective effectiveness of American pressure and illustrating the Japanese desire
specifically to placate the United States.50 Finally, in December 1993, at the 11th hour of the
GATT negotiations, the Japanese government agreed to tariffy all remaining agricultural import
restrictions and commit itself to a minimum access arrangement on rice imports, a deal worked
out principally in bilateral negotiations with the United States.51
13
Tab
le 1
Th
e m
ain
dem
and
/res
po
nse
seq
uen
ce i
n t
he
firs
t p
has
e o
f Ja
pan
’s a
gri
cult
ura
l tr
ade
liber
alis
atio
na
Dat
e of
initi
alde
man
d; s
ourc
e;D
ate
of re
spon
se/
nego
tiatin
g co
ntex
tD
eman
dag
reem
ent R
espo
nse
Res
pons
e
1959
Japa
n’s
trad
e an
dJa
nuar
y 19
60‘B
asic
Pol
icy’
for l
iber
alis
atio
n.U
nite
d S
tate
sfo
reig
n ex
chan
geM
ay 1
960
MA
FF
dra
ft of
nom
inat
ed c
omm
oditi
es fo
r lib
eral
isat
ion
incl
udin
g th
ose
liste
d be
low
. lib
eral
isat
ion
Soy
bean
s, fr
esh
vege
tabl
es a
nd p
inea
pple
s lib
eral
ised
.
July
196
1T
wen
ty-t
wo
prod
ucts
/pro
duct
cat
egor
ies
liber
alis
ed in
clud
ing
soba
, egg
s an
d ra
w s
ilk.
1962
, 196
3B
anan
as, s
ugar
(raw
sug
ar) a
nd h
oney
libe
ralis
ed.
[196
3–67
,M
ay 1
964
Lem
ons
liber
alis
ed.
GA
TT
Ken
nedy
Sep
tem
ber 1
969
Tw
enty
-fiv
e pr
oduc
ts/p
rodu
ct c
ateg
orie
s un
der M
AF
F ju
risdi
ctio
n no
min
ated
for l
iber
alis
atio
n.R
ound
]bS
ix p
rodu
cts/
prod
uct c
ateg
orie
s lib
eral
ised
, inc
ludi
ng d
ried
date
s, g
lute
n an
d gl
uten
flou
r, a
ndm
alt s
ugar
.
Apr
il 19
70S
even
pro
duct
s/pr
oduc
t cat
egor
ies
liber
alis
ed, i
nclu
ding
lem
on ju
ice,
mar
garin
e, p
otat
o (f
lour
,m
eal a
nd fl
akes
), ta
pioc
a, s
ago
and
othe
r sta
rche
s.
Sep
tem
ber 1
970
Fou
r pro
duct
s/pr
oduc
t cat
egor
ies
liber
alis
ed, i
nclu
ding
fres
h gr
apes
, cak
e m
ixes
, mac
aron
i,sp
aghe
tti, n
oodl
es, p
uffe
d ric
e an
d co
rn fl
akes
.
Janu
ary
1971
Fift
een
prod
ucts
/pro
duct
cat
egor
ies
liber
alis
ed, i
nclu
ding
fres
h gr
apef
ruit,
soy
-bea
n oi
l cak
ean
d m
eal,
rape
seed
mea
l, ra
pese
ed, v
eget
able
oils
, pea
nuts
for o
il ext
ract
ion,
sau
sage
s, liv
eho
rses
, fre
sh a
pple
s, fr
ozen
pin
eapp
les
and
grai
n so
rghu
m (o
ther
than
for f
eed)
.
June
197
1E
ight
pro
duct
s/pr
oduc
t cat
egor
ies
liber
alis
ed in
clud
ing
pork
, liv
e ca
ttle
and
pigs
.S
ix p
rodu
cts/
prod
uct c
ateg
orie
s lib
eral
ised
, in
clud
ing
ham
and
bac
on, r
efin
ed b
eet a
nd c
ane
suga
r, c
erta
in m
ixed
feed
s, s
alte
d m
eat a
nd e
dibl
e of
fal.
Oct
ober
197
1A
pril
1972
[197
3–79
,19
73N
on-e
dibl
e se
awee
ds lib
eral
ised
.G
AT
T T
okyo
Rou
nd]c
1974
Roa
sted
and
unr
oast
ed m
alt l
iber
alis
ed.
Not
es:
aT
his
tabl
e do
es n
ot in
clud
e ta
riff r
educ
tions
, bec
ause
of t
he c
ompl
exity
of d
etai
l.b
The
Ken
nedy
Rou
nd d
id n
ot ta
rget
Jap
anes
e ag
ricul
tura
l pro
duct
s an
d w
as a
lmos
t exc
lusi
vely
con
cern
ed w
ith re
duci
ng im
port
tarif
fs o
n m
anuf
actu
red
prod
ucts
.c
The
Tok
yo R
ound
did
not
targ
et J
apan
ese
agric
ultu
ral p
rodu
cts,
alth
ough
it d
id c
once
ntra
te o
n re
duci
ng n
on-t
ariff
bar
riers
to tr
ade.
Sou
rces
:F
orei
gn A
gric
ultu
ral S
ervi
ce (U
SD
A) (
1972
); G
eorg
e (1
980)
; Sta
tistic
s an
d In
form
atio
n D
epar
tmen
t (M
AF
F) (
1996
).
14
Tab
le 2
Th
e m
ain
dem
and
/res
po
nse
seq
uen
ce i
n J
apan
’s b
eef
and
cit
rus
liber
alis
atio
n
Dat
e of
initi
al d
eman
d;D
ate
of re
spon
se/
sour
ce; n
egot
iatin
g co
ntex
tD
eman
dag
reem
ent
Res
pons
e
Feb
ruar
y 19
77Li
fting
of J
apan
’s im
port
Una
ble
to m
ake
any
subs
tant
ive
conc
essi
ons
on b
eef a
nd c
itrus
impo
rts.
[Vic
e-P
resi
dent
Mon
dale
’sco
ntro
l on
citr
us fr
uits
Tok
yo v
isit]
cont
aini
ng p
rese
rvat
ives
.
Sep
tem
ber 1
977
[Spe
cial
Tra
deE
limin
atio
n of
non
-tar
iffJa
nuar
y 19
78In
crea
se in
hig
h qu
ality
(HQ
) bee
f im
port
s fo
r hot
el u
se fr
om 1
,000
toR
epre
sent
ativ
e’s
Offi
ceba
rrie
rs to
US
agr
icul
tura
lS
trau
ss–U
shib
a10
,000
tonn
es o
n a
glob
al b
asis
beg
inni
ng in
JF
Y19
78;a t
o in
crea
seD
eleg
atio
n, G
AT
Tex
port
s, e
spec
ially
bee
fA
gree
men
tor
ange
impo
rts
by th
ree
times
to 4
5,00
0 to
nnes
; to
incr
ease
impo
rts
ofT
okyo
Rou
nd]
and
citr
us.
(und
er th
e M
TN
)or
ange
juic
e by
four
tim
es to
400
0 to
nnes
; to
set u
p a
join
t ora
nge
rese
arch
gro
up to
inve
stig
ate
curr
ent a
nd fu
ture
tren
ds in
the
oran
gesi
tuat
ion
incl
udin
g bl
ende
d ju
ice
prob
lem
s an
d th
e se
ason
al q
uota
sys
tem
.
Spr
ing
1978
Exp
ansi
on o
f bee
f quo
ta.
Dec
embe
r 197
8Im
port
s of
fres
h or
ange
s to
exp
and
by 9
,250
tonn
es p
er y
ear d
urin
g 19
79–
Uni
ted
Sta
tes
Nak
agaw
a–M
ans-
83 (f
rom
45,
000
tonn
es to
82,
000
tonn
es b
y JF
Y19
83);
bee
f quo
ta[G
AT
T T
okyo
Rou
nd]
field
Agr
eem
ent
expa
nsio
n fr
om 1
6,80
0 to
nnes
to 3
0,00
0 to
nnes
on
a gl
obal
bas
is b
y JF
Y(u
nder
the
MT
N)
1983
; inc
reas
es in
ann
ual i
mpo
rt q
uota
s of
ora
nge
and
grap
efru
it ju
ice
to6,
500
and
6,00
0 to
nnes
resp
ectiv
ely;
gra
dual
redu
ctio
n of
tarif
fs o
n gr
apef
ruit
and
lem
ons
and
limes
thro
ugh
1987
and
min
or ta
riff c
uts
on c
erta
in k
inds
of
citr
us ju
ice.
Oct
ober
198
1T
otal
liber
alis
atio
n of
Rej
ectio
n of
liber
alis
atio
n de
man
d.U
nite
d S
tate
s [o
ffici
als’
Japa
n’s
beef
and
ora
nge
talk
s]m
arke
ts fr
om A
pril
1984
.F
ebru
ary
1982
Tar
iff c
uts
on c
itrus
pro
duct
s to
be
impl
emen
ted
ahea
d of
sch
edul
e.[E
zaki
Mis
sion
toW
ashi
ngto
n]
Apr
il 19
82T
otal
and
imm
edia
te[P
rime
Min
iste
rM
argi
nal i
ncre
ase
in im
port
quo
tas
for b
eef a
nd c
itrus
[US
–Jap
an W
orki
ng G
roup
liber
alis
atio
n ow
ing
toS
uzuk
i]R
eque
st fo
r the
Uni
ted
Sta
tes
to c
ease
its
dem
and
for i
mm
edia
teon
Agr
icul
tura
l Pro
duct
viol
atio
n of
the
GA
TT
.lib
eral
isat
ion
and
enga
ge in
mor
e re
alis
tic p
ropo
sals
.Im
port
Res
tric
tions
]M
ay 1
982
Exp
ansi
on o
f im
port
quo
tas
on th
ree
agric
ultu
ral i
tem
s (p
repa
red
and
pres
erve
d po
rk, h
igh-
test
mol
asse
s an
d ca
nned
pin
eapp
les)
; red
uctio
n or
elim
inat
ion
of ta
riffs
on
17 a
gric
ultu
ral p
rodu
cts;
agr
icul
tura
l tra
deib
eral
isat
ion
is e
xtre
mel
y di
fficu
lt.
15
Sep
tem
ber–
Oct
ober
198
2Li
bera
lisat
ion
of J
apan
’sN
o in
tent
ion
of d
ism
antli
ng b
eef a
nd c
itrus
impo
rt re
stric
tions
afte
r Apr
il[A
nnua
l US
–Jap
an c
on-
beef
and
citr
us m
arke
ts;
1984
; diff
icul
t pol
itica
l situ
atio
n ar
ound
liber
alis
atio
n.su
ltatio
n on
agr
icul
tura
llin
k be
twee
n ag
ricul
tura
ltr
ade
in W
ashi
ngto
n]tr
ade
and
indu
stria
l pro
tect
ion
bills
in th
e U
nite
d S
tate
s.
Oct
ober
198
2T
otal
liber
alis
atio
n of
Jap
an’s
Gra
dual
exp
ansi
on o
f im
port
quo
tas.
[Haw
aii n
egot
iatio
ns]
beef
and
citr
us m
arke
ts;
impo
rt q
uota
sys
tem
sill
egal
und
er th
e G
AT
T.
Dec
embe
r 198
2Li
bera
lisat
ion
of b
eef
Libe
ralis
atio
n im
poss
ible
but
pre
pare
d to
resp
ond
to a
n ex
amin
atio
n of
an
[US
–Jap
an T
rade
and
citr
us m
arke
ts.
expa
nsio
n of
mar
ket o
ppor
tuni
ties.
Sub
com
mitt
ee]
Janu
ary
1983
Mor
e m
arke
t acc
ess
for
Janu
ary
1983
Rej
ectio
n of
libe
ralis
atio
n de
man
d, b
ut a
gree
men
t to
try
to s
ettle
the
prob
lem
[US
Sec
reta
ry o
fbe
ef a
nd c
itrus
.[P
rime
Min
iste
rby
Mar
ch 1
984
thro
ugh
bila
tera
l dis
cuss
ions
.A
gric
ultu
re,B
rock
]N
akas
one’
sW
ashi
ngto
n vi
sit]
Apr
il 19
83C
lear
sta
tem
ent o
f tim
eIn
crea
se in
quo
tas
for b
eef a
nd c
itrus
.[U
S–J
apan
neg
otia
tions
on
perio
d fo
r lib
eral
isat
ion.
agric
ultu
ral p
rodu
cts]
Apr
il 19
84A
bolit
ion
of a
ll im
port
[Sec
reta
ry o
f Com
mer
cere
stric
tions
by
1 A
pril
1988
.B
rock
]A
ugus
t 198
4,E
xpan
sion
in b
eef i
mpo
rt q
uota
by
an a
vera
ge o
f 6,9
00 to
nnes
eve
ry y
ear (
anB
rock
–Yam
amur
a17
per
cen
t ann
ual i
ncre
ase)
from
JF
Y19
84–8
7 (w
ith a
tota
l quo
ta o
f 58,
400
Und
erst
andi
ngin
198
7); e
xpan
sion
in th
e or
ange
impo
rt q
uota
by
an a
vera
ge o
f 11,
000
tonn
es p
er y
ear e
very
yea
r fro
m J
FY
1984
–87
(with
a to
tal q
uota
of 1
26,0
00to
nnes
in 1
987)
; exp
ansi
on in
the
oran
ge ju
ice
impo
rt q
uota
by
an a
vera
ge o
f50
0 to
nnes
eve
ry y
ear f
rom
JF
Y19
84–8
7 (w
ith a
tota
l quo
ta o
f 8,5
00 to
nnes
in 1
987)
; no
expa
nsio
n in
the
grap
efru
it ju
ice
quot
a bu
t lib
eral
isat
ion
afte
rth
ree
year
s (in
198
6) E
xpan
sion
in to
tal b
eef q
uota
by
9,00
0 to
ns p
er y
ear
from
JF
Y 1
984–
87 (a
6 p
er c
ent a
nnua
l inc
reas
e)
Nov
embe
r 198
4[J
apan
–Aus
tralia
agre
emen
t]
16
Apr
il 19
87S
et a
tim
etab
le fo
r lib
era-
Ref
usal
to a
bolis
h be
ef im
port
quo
ta.
[Sec
reta
ry o
flis
ing
beef
mar
ket a
s a
Agr
icul
ture
, Lyn
g]pr
econ
ditio
n fo
r com
men
cing
beef
neg
otia
tions
; no
beef
quot
as w
ould
be
nego
tiate
d
Feb
ruar
y 19
88Li
bera
lisat
ion
of th
e be
ef m
arke
tLi
bera
lisat
ion
of b
eef m
arke
tP
repa
red
to d
iscu
ss q
uota
exp
ansi
on; ‘
liber
alis
atio
n is
diff
icul
t’.w
ithin
two
year
s; ta
rific
atio
n. June
198
81)
In A
pril
1991
, the
bee
f im
port
quo
ta w
ould
be
abol
ishe
d an
d be
ef im
port
sw
ould
be
liber
alis
ed; 2
) the
tarif
f rat
e on
bee
f im
port
s (t
hen
25 p
er c
ent)
wou
ld ju
mp
to 7
0 pe
r cen
t in
1991
, fal
ling
to 6
0 pe
r cen
t in
1992
and
50
per
cent
in 1
993.
The
rate
afte
r 199
3 w
ould
be
nego
tiate
d in
199
4; 3
) if i
n an
ygi
ven
year
bee
f im
port
s ro
se b
y m
ore
than
20
per c
ent o
ver t
he p
revi
ous
year
, Jap
an w
as p
erm
itted
to im
pose
a ta
riff a
s hi
gh a
s 95
per
cen
t; 4)
in th
eth
ree
year
s un
til li
bera
lisat
ion,
in o
ther
wor
ds fr
om th
e 19
88 y
ear t
o th
e en
dof
the
1990
yea
r, th
e be
ef im
port
quo
ta w
ould
be
incr
ease
d ea
ch y
ear b
y60
,000
tonn
es; a
nd 5
) in
the
thre
e ye
ars
until
libe
ralis
atio
n, a
n in
crea
sing
perc
enta
ge o
f im
port
ed b
eef (
30 p
er c
ent i
n 19
88, 4
5 pe
r cen
t in
1989
and
60 p
er c
ent i
n 19
90) w
ould
be
sold
thro
ugh
the
sim
ulta
neou
s bu
ying
and
selli
ng (S
BS
) sys
tem
; 6) a
bolit
ion
of o
rang
e qu
otas
in A
pril
1991
— in
the
mea
ntim
e, J
apan
wou
ld in
crea
se im
port
s by
22,
000
tons
per
yea
r; 7
)ab
oliti
on o
f ora
nge
juic
e qu
otas
in A
pril
1992
; 8) l
ower
ing
of ta
riffs
on
grap
efru
it an
d si
x ot
her i
tem
s.
Not
e:a
JFY
— J
apan
ese
fisca
l yea
r.
Sou
rces
:F
ujita
ni (1
986)
; Coy
le (1
986)
; Fuk
ushi
ma
(199
2); R
eich
and
End
o (1
983)
; Rei
ch a
nd T
imm
er (1
983)
; Chr
istia
n S
cien
ce M
onito
r, 2
1 Ju
ne 1
988,
p. 7
.
17
Tab
le 3
Th
e m
ain
dem
and
/res
po
nse
seq
uen
ce i
n t
he
liber
alis
atio
n o
f 12
mis
cella
neo
us
agri
cult
ura
l p
rod
uct
cat
ego
ries
Dat
e of
initi
al d
eman
d;D
ate
of re
spon
se/
sour
ce; n
egot
iatin
g co
ntex
tD
eman
dag
reem
ent
Res
pons
e
Sep
tem
ber 1
982
Quo
ta e
xpan
sion
for s
ix re
stric
ted
Janu
ary
1983
Red
uctio
n in
impo
rt re
stric
tions
on
the
six
item
s pl
us t
hree
mor
eU
nite
d S
tate
site
ms
(non
-citr
us fr
uit j
uice
s, to
mat
o(t
obac
co p
rodu
cts,
cho
cola
te a
nd b
iscu
its),
and
redu
ctio
n in
impo
rtju
ice,
tom
ato
ketc
hup
and
sauc
e, fr
uit
tarif
fs o
n 47
oth
er a
gric
ultu
ral i
tem
s.pu
ree
and
past
e, p
eas
and
bean
s,an
d pe
anut
s).
July
198
3P
ropo
sed
a di
scus
sion
on
13W
ith re
spec
t to
quan
titat
ive
rest
rictio
ns o
n th
ose
agric
ultu
ral
Uni
ted
Sta
tes
agric
ultu
ral p
rodu
ct c
ateg
orie
sco
mm
oditi
es th
at w
ere
stat
e-tr
aded
, Jap
an’s
pos
ition
was
that
kim
milk
pow
der a
nd c
onde
nsed
milk
;qu
antit
ativ
e re
stric
tions
wer
e po
ssib
le. I
n ca
ses
whe
re s
tate
trad
espr
oces
sed
beef
and
por
k; p
roce
ssed
oper
ated
an
impo
rt m
onop
oly,
und
er G
AT
T A
rtic
le 2
0(d)
, exc
eptio
nsch
eese
; ora
nges
: fru
it pu
ree
and
frui
tw
ere
gran
ted
to th
e ob
ligat
ion
to a
bolis
h qu
antit
ativ
e re
stric
tions
past
es, c
anne
d pi
neap
ple
and
frui
tun
cond
ition
ally
. Art
icle
20(
d) p
erm
itted
as
exce
ptio
ns n
eces
sary
pulp
, non
-citr
us ju
ices
and
tom
ato
juic
e,m
easu
res
to u
phol
d th
e ob
serv
ance
of l
aws
and
ordi
nanc
es th
at d
idto
mat
o ke
tchu
p an
d sa
uce,
sta
rch,
not c
ontr
aven
e G
AT
T ru
les.
Acc
ordi
ngly
, it w
as ju
stifi
able
to im
pose
grap
e su
gar,
mis
cella
neou
s be
ans,
impo
rt re
stric
tions
on
the
impo
rt o
f sta
te-t
rade
d co
mm
oditi
es in
ord
erpe
anut
s, a
nd o
ther
food
pre
para
tions
)to
mai
ntai
n th
e st
ate-
trad
ing
ente
rpris
es th
at w
ere
legi
timat
eon
the
basi
s of
GA
TT
Art
icle
23,
inst
itutio
ns u
nder
the
GA
TT
.C
laus
e 1.
Oct
ober
198
3T
ariff
redu
ctio
ns o
n fo
ur tr
opic
al a
gric
ultu
ral p
rodu
cts.
1983
–84
Apr
il 19
84A
gree
men
t to
part
ially
liber
alis
e si
x pr
oduc
t cat
egor
ies
incl
udin
g[v
ario
us J
apan
–US
proc
esse
d po
rk a
nd tr
opic
al fr
uit j
uice
, to
expa
nd im
port
quo
tas
onne
gotia
tions
]ni
ne p
rodu
cts
incl
udin
g m
isce
llane
ous
bean
s, p
roce
ssed
tom
ato
prod
ucts
and
pea
nuts
, to
redu
ce ta
riffs
on
141
prod
ucts
(sub
ject
tone
gotia
tion
durin
g th
e T
okyo
Rou
nd) i
n a
spee
dier
fash
ion
and
tore
duce
furt
her t
ariff
s on
35
prod
ucts
suc
h as
pro
cess
ed to
mat
opr
oduc
ts a
nd p
eanu
ts. (
In e
xcha
nge
for t
he a
bove
— th
e U
nite
dS
tate
s ag
reed
to p
ostp
one
appe
alin
g to
the
GA
TT
for t
wo
year
s —
until
198
6 —
on
the
13 m
isce
llane
ous
prod
uct c
ateg
orie
s.)
Aug
ust 1
984
Agr
eem
ent t
o el
imin
ate
or e
xpan
d im
port
quo
tas
for s
peci
fic p
rodu
cts
with
in 1
0 ou
t of 1
3 qu
ota-
rest
ricte
d ca
tego
ries
of fa
rm tr
ade
and
tarif
fcu
ts o
n 36
oth
er a
gric
ultu
ral i
tem
s, in
clud
ing
beef
offa
ls, f
roze
n sw
eet
corn
and
egg
alb
umen
.
18
1984
–86
Com
plet
e or
pha
sed
liber
alis
atio
n of
Mar
ch–A
pril 1
986
No
agre
emen
t to
liber
alis
e.U
nite
d S
tate
s,12
agr
icul
tura
l pro
duct
cat
egor
ies
(the
neg
otia
tions
Par
tial li
bera
lisat
ion,
impo
rt q
uota
exp
ansi
on, a
nd ta
riff r
educ
tion.
[offi
cial
s’ n
egot
iatio
ns]
abov
e lis
t min
us o
rang
es).
July
198
6R
eque
st fo
r det
erm
inat
ion
whe
ther
Jap
anes
eU
nite
d S
tate
squ
antit
ativ
e re
stric
tions
on
12 a
gric
ultu
ral
[sub
mis
sion
to a
prod
uct c
ateg
orie
s (o
rigin
ally
impo
sed
for
GA
TT
Pan
el]
bala
nce
of p
aym
ents
reas
ons
unde
r Art
icle
XII
viol
ated
Art
icle
XI o
f the
GA
TT
, whi
chpr
ohib
ited
the
use
of q
uant
itativ
e re
stric
tions
on im
port
s. A
rtic
le X
I sho
uld
be a
pplie
d to
all c
omm
oditi
es, i
nclu
ding
sta
te-t
rade
dco
mm
oditi
es, e
xcep
t tho
se e
xem
pted
und
erA
rtic
le 2
5 (t
he W
aive
r Cla
use)
.
Oct
ober
198
7B
asic
ally
sup
port
ed th
e A
mer
ican
pos
ition
.G
AT
T R
ulin
gIts
judg
emen
t sta
ted
that
‘GA
TT
Art
icle
11
proh
ibits
all
impo
rt re
stric
tions
, inc
ludi
ngef
fect
ive
impo
rt re
stric
tions
by
stat
e tr
ade
and
effe
ctiv
e im
port
rest
rictio
ns b
y im
port
quot
a’. A
ccor
ding
ly, 1
0 ou
t of t
he 1
2no
min
ated
agr
icul
tura
l pro
duct
cat
egor
ies
viol
ated
GA
TT
rule
s (s
kim
milk
pow
der
and
cond
ense
d m
ilk, p
roce
ssed
bee
f and
pork
, pro
cess
ed c
hees
e, s
tarc
h, g
rape
suga
r, fr
uit p
uree
and
pas
te, f
ruit
pulp
and
cann
ed p
inea
pple
, non
-citr
us ju
ice
and
tom
ato
juic
e, to
mat
o sa
uce
and
tom
ato
ketc
hup)
; rec
omm
enda
tion
that
impo
rtre
stric
tions
on
thes
e pr
oduc
ts b
e ab
olis
hed.
Nov
embe
r 198
7C
ompl
y w
ith th
e G
AT
T ru
ling.
Exp
lana
tion
of th
e ‘p
oliti
cal d
iffic
ulty
sur
roun
ding
this
spe
cific
[US
–Jap
anag
ricul
tura
l reg
ime’
bec
ause
‘the
12
item
s in
clud
ed lo
cal s
peci
aliti
esne
gotia
tions
](s
uch
as s
tarc
h) a
nd th
us re
mov
al o
f the
quo
tas
wer
e po
tent
ially
harm
ful t
o re
gion
al e
cono
mie
s’.
Feb
ruar
y 19
88Li
bera
lisat
ion
of e
ight
out
of t
he 1
0 pr
oduc
ts s
ubje
ct to
the
GA
TT
rulin
g ov
er th
e pe
riod
Oct
ober
198
8 to
Apr
il 19
90 (p
roce
ssed
bee
fan
d po
rk, p
roce
ssed
che
ese,
gra
pe s
ugar
, fru
it pu
ree
and
pas
te, f
ruit
pulp
and
can
ned
pine
appl
e, n
on-c
itrus
frui
t jui
ce a
nd to
mat
o ju
ice,
tom
ato
sauc
e an
d to
mat
o ke
tchu
p; th
at is
, not
incl
udin
g st
arch
and
skim
milk
pow
der a
nd c
onde
nsed
milk
).
Sou
rces
:Ito
(198
4); H
atha
way
(198
7, p
p. 1
08, 1
10);
Fuj
itani
(198
6); S
aeki
(199
2); R
eich
and
End
o (1
983)
; The
Aus
tral
ian,
2 D
ecem
ber 1
987.
19
Tab
le 4
Th
e m
ain
dem
and
/res
po
nse
seq
uen
ce i
n r
ice
liber
alis
atio
n
Dat
e of
initi
al d
eman
d;D
ate
of re
spon
se/
sour
ce; n
egot
iatin
g co
ntex
tD
eman
dag
reem
ent
Res
pons
e
Sep
tem
ber 1
986
Japa
nese
rice
pol
icy
is ‘u
nrea
sona
ble’
und
er S
ectio
n[A
mer
ican
RM
A p
etiti
on30
1 of
the
1974
Tra
de A
ct a
nd re
stric
ts a
nd p
lace
s a
to th
e U
ST
R]
burd
en o
n A
mer
ican
trad
e; th
e P
resi
dent
sho
uld
com
men
ce n
egot
iatio
ns w
ith th
e Ja
pane
sego
vern
men
t in
orde
r to
dem
and
larg
e-sc
ale
liber
alis
atio
n or
the
com
plet
e ab
oliti
on o
fre
stric
tions
on
Japa
nese
rice
impo
rts.
Sep
tem
ber/
Sub
mit
the
ques
tion
of ri
ce li
bera
lisat
ion
to th
eO
ctob
er 1
986
GA
TT
Uru
guay
Rou
nd.
[US
TR
Yeu
tter]
Sep
tem
ber 1
986,
‘Neg
otia
tions
sha
ll aim
to a
chie
ve g
reat
er[P
unta
del
Est
elib
eral
isat
ion
of tr
ade
in a
gric
ultu
re a
nd b
ring
all
Dec
lara
tion,
laun
chin
gm
easu
res
affe
ctin
g im
port
acc
ess
and
expo
rtth
e U
R]
com
petit
ion
unde
r str
engt
hed
and
mor
e op
erat
iona
llyef
fect
ive
GA
TT
rule
s an
d di
scip
lines
... b
y: (i
)im
prov
ing
mar
ket a
cces
s th
roug
h, in
ter a
lia, t
here
duct
ion
of im
port
bar
riers
; (ii)
impr
ovin
g th
eco
mpe
titiv
e en
viro
nmen
t by
incr
easi
ng d
isci
plin
e on
the
use
of a
ll di
rect
and
indi
rect
sub
sidi
es a
nd o
ther
mea
sure
s af
fect
ing
dire
ctly
or i
ndire
ctly
agr
icul
ture
trad
e ...
; (iii
) min
imiz
ing
the
adve
rse
effe
cts
that
sani
tary
and
phy
tosa
nita
ry re
gula
tions
and
bar
riers
can
have
on
trad
e in
agr
icul
ture
...’.
Dec
embe
r 198
6R
ejec
tion
of th
e id
ea o
f GA
TT
sub
mis
sion
on
the
[Min
s. o
f AF
F’s
Kat
ogr
ound
s of
the
unan
imou
s D
iet r
esol
utio
n in
favo
urvi
sit t
o th
e U
nite
dof
100
per
cen
t sel
f-su
ffici
ency
in ri
ce.
Sta
tes]
Feb
ruar
y 19
87M
ajor
ity o
pini
on th
at ‘m
inim
um a
cces
s’ s
houl
d be
Bec
ause
rice
was
und
er p
rodu
ctio
n co
ntro
l (th
e
[UR
pre
limin
ary
esta
blis
hed
for a
ll ag
ricul
tura
l pro
duct
s.ric
e ac
reag
e re
duct
ion
polic
y, o
r gen
tan)
, ric
e
agric
ultu
ral n
egot
iatio
ns]
impo
rts
coul
d be
rest
ricte
d un
der A
rtic
le 1
1.
20
Apr
il 19
87A
ccep
t bila
tera
l neg
otia
tion
with
the
Uni
ted
Sta
tes
onR
ejec
tion
of th
e id
ea o
f mak
ing
rice
impo
rts
the
[US
TR
Yeu
tter a
nd U
Ses
tabl
ishi
ng a
n im
port
quo
ta fo
r ric
e an
d es
tabl
ish
ansu
bjec
t of n
egot
iatio
n, b
ut a
gree
men
t to
subm
it ric
e
Sec
reta
ry o
f Agr
icul
ture
,A
mer
ican
rice
impo
rt q
uota
.to
the
GA
TT
alth
ough
with
con
ditio
ns.
Lyng
, vis
it Ja
pan]
July
198
7A
ll ag
ricul
tura
l pro
gram
s, m
eani
ng a
ll fo
rms
of[F
irst J
apan
ese
Offi
cial
reco
gniti
on o
f exc
eptio
nal im
port
[Firs
t US
pro
posa
l to
impo
rt c
ontr
ols
(incl
udin
g al
l sta
te tr
adin
g th
atpr
opos
al t
o th
ere
stric
tions
to m
aint
ain
food
sec
urity
; re-
the
GA
TT
]m
aint
ains
inte
rnal
pric
es d
iffer
ent f
rom
wor
ld p
rices
)G
AT
T]
exam
inat
ion
of im
port
rest
rictio
ns b
ased
on
wai
vers
and
all a
gric
ultu
ral s
ubsi
dies
— d
omes
tic a
nd e
xpor
t —an
d fle
xibl
e su
rcha
rges
; rev
iew
the
GA
TT
art
icle
s
whi
ch a
ffect
inte
rnat
iona
l tra
de, b
e ph
ased
out
or
on e
xpor
t pro
hibi
tion;
ste
p-by
-ste
p ab
oliti
on o
f
redu
ced
to z
ero
over
a 1
0-ye
ar p
erio
d (b
y 10
per
cen
tex
port
sub
sidi
es; c
ontr
ols
on d
omes
tic s
ubsi
dies
per a
nnum
sta
rtin
g in
199
0 —
that
is, b
y th
e ye
ar 2
000)
.th
at h
ave
an e
ffect
on
trad
e.T
he p
rodu
cer s
ubsi
dy e
quiv
alen
t (P
SE
) dev
elop
edby
the
OE
CD
in it
s st
udy
of a
gric
ultu
ral s
ubsi
dies
be u
sed
as a
mea
sure
of s
ubsi
dy le
vels
and
to m
onito
rpr
ogre
ss in
pha
sing
out
sub
sidy
pro
gram
s.
Oct
ober
198
7A
n im
med
iate
free
ze o
n al
l far
m s
uppo
rts
and
[Cai
rns
Gro
upsu
bsid
ies;
a p
ledg
e no
t to
intr
oduc
e ne
w tr
ade-
(Arg
entin
a, A
ustr
alia
,di
stor
ting
mea
sure
s; a
nd c
uts
to fa
rm p
rodu
ctio
nB
razi
l, C
anad
a, C
hile
,su
ppor
ts b
y 10
per
cen
t in
1989
and
199
0; s
hort
-ter
mC
olom
bia,
Fiji
, Hun
gary
,ac
tion
to fr
eeze
agr
icul
tura
l sup
port
as
an in
itial
ste
pIn
done
sia,
Mal
aysi
a, in
a lo
ng-t
erm
pro
cess
of c
ompl
ete
liber
alis
atio
n of
New
Zea
land
, the
farm
trad
e. R
efor
m o
f GA
TT
rule
s to
pre
vent
aP
hilip
pine
s an
dre
surg
ence
of p
rote
ctio
n of
agr
icul
tura
l tra
de, o
peni
ngT
haila
nd) P
ropo
sal]
of m
arke
ts, e
limin
atio
n of
sub
sidi
es a
nd th
e cu
tbac
kof
gen
eral
sup
port
for a
gric
ultu
re.
Dec
embe
r 198
7E
xpor
t sub
sidi
es s
houl
d be
elim
inat
ed a
nd o
ther
[Jap
anes
e P
ropo
sal
subs
ides
that
dis
tort
inte
rnat
iona
l agr
icul
tura
l tra
defo
r Neg
otia
tions
on
shou
ld b
e re
gula
ted;
exc
eptio
nal q
uant
itativ
e im
port
Agr
icul
ture
]co
ntro
ls s
houl
d be
reco
gnis
ed fo
r foo
d se
curit
ypu
rpos
es.
Feb
ruar
y 19
88E
ach
natio
n ha
s a
right
to s
ubsi
dise
dom
estic
[Jap
anes
epr
oduc
ers
in o
rder
to e
nsur
e se
curit
y of
food
gove
rnm
ent s
ub-
supp
lies;
mar
ket f
orce
s m
ust b
e ha
rmon
ised
with
mis
sion
to G
AT
Tth
e ne
ed to
gua
rant
ee fo
od s
ecur
ity’.
It is
ess
entia
ltr
ade
nego
tiatio
ns]
to fu
lly ta
ke in
to a
ccou
nt th
e di
fficu
lty o
f im
port
ing
coun
trie
s in
rely
ing
(for
) the
gre
at p
art o
f the
irsu
pply
on
fore
ign
sour
ces’
.
Sep
tem
ber 1
988
As
wel
l as
bein
g in
vio
latio
n of
GA
TT
trea
ty ru
les
Cal
ls o
n th
e U
S g
over
nmen
t to
reje
ct th
e pe
titio
n
[Am
eric
an R
MA
agai
nst t
otal
impo
rt b
ans,
Jap
an’s
rice
pol
icy
deni
esbe
caus
e ric
e w
as s
ubje
ct to
GA
TT
neg
otia
tions
.
petit
ion
to th
e U
ST
R]
Am
eric
a’s
trad
e rig
hts
unde
r Sec
tion
301
of U
S T
rade
21
Law
. The
Jap
anes
e go
vern
men
t sho
uld
ente
r ric
e in
toth
e di
scus
sion
of ‘
roll
back
’ (th
at is
, pro
tect
ioni
st m
easu
res
that
do
not c
onfo
rm w
ith G
AT
T ru
les
shou
ld b
eab
olis
hed
or m
ade
to c
onfo
rm w
ith G
AT
T ru
les
by th
een
d of
the
UR
) and
the
Am
eric
an g
over
nmen
t sho
uld
ente
r int
o ne
gotia
tions
with
the
Japa
nese
gov
ernm
ent
to a
utho
rise
rice
impo
rts
up to
2.5
per
cen
t of d
omes
ticco
nsum
ptio
n in
the
first
yea
r, 5
per
cen
t in
the
seco
ndye
ar, 7
.5 p
er c
ent i
n th
e th
ird y
ear a
nd 1
0 pe
r cen
t in
the
four
th y
ear (
or o
ne m
illio
n to
nnes
).
GA
TT
Mid
-Ter
m R
evie
w‘T
he lo
ng-t
erm
obj
ectiv
e of
the
agric
ultu
ral n
egot
iatio
nsT
he s
igni
fican
t cla
use
in th
e A
gree
men
t ins
erte
d on
Apr
il 198
9 A
gree
men
tis
to e
stab
lish
a fa
ir an
d m
arke
t-or
ient
ed a
gric
ultu
ral
Japa
n’s
urgi
ng w
as a
s fo
llow
s: ‘N
on-t
rade
trad
ing
syst
em; s
ubst
antia
l pro
gres
sive
redu
ctio
ns in
conc
erns
suc
h as
food
sec
urity
be
give
n du
eag
ricul
tura
l sup
port
and
pro
tect
ion
… re
sulti
ng in
cons
ider
atio
n in
the
proc
ess
of fu
ture
neg
otia
tions
’;co
rrec
ting
and
prev
entin
g re
stric
tions
and
dis
tort
ions
subs
tant
ial c
uts
in ta
riffs
on
trop
ical
pro
duct
s,in
wor
ld a
gric
ultu
ral m
arke
ts; f
acto
rs o
ther
than
trad
ein
clud
ing
agric
ultu
ral p
rodu
cts.
polic
y ar
e ta
ken
into
acc
ount
in th
e co
nduc
t of
[par
ticip
ants
’] ag
ricul
tura
l pol
icie
s. In
the
nego
tiatio
nsto
ach
ieve
the
long
-ter
m o
bjec
tive,
acc
ount
will
be
take
n of
pro
posa
ls a
imed
at a
ddre
ssin
g pa
rtic
ipan
ts’
conc
erns
suc
h as
food
sec
urity
’.
Oct
ober
198
9,C
onve
rsio
n of
all
non-
tarif
f bar
riers
for a
ll ca
tego
ries,
[Sec
ond
US
pro
posa
lin
clud
ing
GA
TT
-gua
rant
eed
stat
e-co
ntro
lled
farm
to th
e G
AT
T]
trad
e ite
ms
such
as
Japa
nese
rice
to ta
riffs
dur
ing
a10
-yea
r tra
nsiti
onal
per
iod.
Dur
ing
that
per
iod,
GA
TT
’s c
once
ssio
nal t
ariff
s w
ould
be
appl
ied
for a
min
imum
acc
ess
leve
l of i
mpo
rts
and
tarif
f quo
tas
wou
ld b
e in
trod
uced
with
hig
h ta
riff r
ates
for i
mpo
rts
in e
xces
s of
the
min
imum
leve
l. T
he h
ighe
r tar
iff ra
tes
for t
he q
uota
por
tion
have
to b
e br
ough
t dow
n w
ithin
the
deca
de to
leve
ls m
atch
ing
the
conc
essi
onal
rate
s.T
he q
uant
ity o
f im
port
s su
bjec
t to
the
low
tarif
f wou
ldbe
dec
ided
in fu
ture
neg
otia
tions
, but
abo
ut 3
per
cen
tof
dom
estic
con
sum
ptio
n ca
n be
the
stan
dard
.
Nov
embe
r 198
9T
he a
bolit
ion
of a
gric
ultu
ral p
rote
ctio
n is
[Sec
ond
Japa
nese
unac
cept
able
. F
rom
the
stan
dpoi
nt o
fag
ricul
ture
pro
posa
lco
nsid
erat
ion
for f
ood
secu
rity,
with
resp
ect
to th
e G
AT
T]
to b
asic
food
stuf
fs, a
cou
ntry
sho
uld
be a
ble
to ta
kebo
rder
adj
ustm
ent m
easu
res
in s
pite
of G
AT
T.
22
Art
icle
11.
Dom
estic
pol
icie
s th
at d
o no
t hav
e an
ytr
ade
dist
ortio
nary
effe
ct, o
r whi
ch a
re n
ot a
prob
lem
, or w
hich
mee
t the
mul
ti-di
men
sion
al n
eeds
of a
gric
ultu
ral p
olic
y su
ch a
s th
e m
aint
enan
ce o
fna
tiona
l lan
d an
d th
e en
viro
nmen
t as
wel
l as
regi
onal
soc
ietie
s sh
ould
be
perm
itted
. Dom
estic
supp
ort p
olic
ies
incl
udin
g do
mes
tic s
ubsi
dies
will
be
decr
ease
d gr
adua
lly in
sup
port
leve
l by
usin
g A
MS
,ex
clud
ing
dom
estic
sup
port
sys
tem
s th
at a
repe
rmitt
ed. H
owev
er, c
onsi
derin
g th
e di
vers
ified
role
of a
gric
ultu
re, i
t is
not p
ossi
ble
to a
band
onag
ricul
tura
l sup
port
com
plet
ely.
Apr
il 19
90O
pen
rice
mar
ket
[Yam
amot
o T
omio
,R
ejec
tion
of A
mer
ican
dem
and.
[US
Und
er-S
ecre
tary
Min
iste
r of A
FF
’s]
of A
gric
ultu
re]
Aug
ust 1
990
Con
vers
ion
of a
ll im
port
rest
rictio
ns in
to ta
riffs
and
[US
Sec
reta
ry o
fgr
adua
l neg
otia
tion
of lo
wer
tarif
fs. T
he in
itial
tarif
fA
gric
ultu
re, Y
eutte
r]le
vel c
ould
be
as h
igh
as 7
00 p
er c
ent,
prog
ress
ivel
yre
duce
d to
zer
o af
ter 1
0 ye
ars;
shi
ft to
tarif
ficat
ion
over
the
next
10
year
s; in
the
mea
ntim
e, a
llow
qua
ntita
tive
rest
rictio
ns in
the
form
of t
ariff
quo
tas
and
so o
n to
rem
ain;
dec
ide
the
tarif
f rat
e ap
plic
able
for t
he n
ext 1
0ye
ars
in th
e U
R a
nd n
egot
iate
the
low
erin
g of
the
tarif
fra
te in
the
next
roun
d. R
ice
not a
n ex
cept
ion
to ta
riffic
atio
n. Sep
tem
ber 1
990
Red
uctio
n by
26.
6 pe
r cen
t in
the
tota
l agg
rega
te[J
apan
’s O
ffer a
t the
mea
sure
s of
sup
port
(AM
S) o
f the
gra
ins
sect
orG
AT
T A
gric
ultu
ral
(whe
at, b
arle
y an
d ric
e) b
etw
een
1986
and
199
6.T
rade
Neg
otia
tions
]
Oct
ober
199
0,A
ll co
untr
ies
unde
rtak
e ag
ricul
tura
l ref
orm
ove
r 10
[US
Pro
posa
l to
the
year
s fr
om 1
991
for a
ll ag
ricul
tura
l pro
duct
s; re
duce
GA
TT
Agr
icul
tura
lth
e m
ost t
rade
dis
tort
iona
ry d
omes
tic s
uppo
rtT
rade
Neg
otia
tions
]po
licie
s, u
sing
the
AM
S, b
y 75
per
cen
t ove
r 10
year
sfr
om 1
991;
redu
ce o
ther
trad
e di
stor
tiona
ry d
omes
ticsu
ppor
t pol
icie
s by
30
per c
ent o
ver 1
0 ye
ars
from
1991
; dom
estic
sup
port
pol
icie
s th
at a
re c
once
rned
with
inco
me
supp
ort,
the
mai
nten
ance
of t
he e
nviro
nmen
tan
d na
tiona
l land
, dom
estic
food
ass
ista
nce,
mar
ketin
gre
late
d, a
nd re
sear
ch, d
evel
opm
ent a
nd d
isse
min
atio
n
23
will
be
perm
itted
, but
min
imis
e th
eir e
ffect
s on
trad
e;w
ith re
spec
t to
bord
er m
easu
res,
con
vert
all
non-
tarif
fm
easu
res
to ta
riffs
and
bin
d al
l tar
iffs;
redu
ce ta
riffs
and
tarif
f quo
tas
by a
n av
erag
e of
75
per c
ent o
ver 1
0ye
ars
from
199
1; in
the
elev
enth
yea
r, th
e ta
riff s
houl
dno
t exc
eed
50 p
er c
ent;
with
resp
ect t
o pr
oduc
ts o
nw
hich
ther
e ar
e cu
rren
tly n
on-t
ariff
mea
sure
s,un
dert
ake
com
mitm
ents
rela
ting
to m
inim
um a
cces
s,an
d m
inim
um a
cces
s or
impo
rts
snou
ld b
e in
crea
sed
by 7
5 pe
r cen
t dur
ing
the
10 y
ears
from
199
1 by
intr
oduc
ing
a ta
riff q
uota
of i
mpo
rt q
uant
ity; t
his
tarif
f quo
ta w
ill b
e ab
olis
hed
afte
r 10
year
s.
Dec
embe
r 199
1C
onve
rsio
n of
all
non-
tarif
f far
m tr
ade
barr
iers
into
[Art
hur D
unke
l,ta
riffs
(tha
t is,
tarif
ficat
ion
with
out e
xcep
tion)
follo
wed
Dire
ctor
-Gen
eral
of t
heby
thei
r gra
dual
redu
ctio
n (a
n av
erag
e of
36
per c
ent
GA
TT
, dra
ft of
the
final
for a
ll ag
ricul
tura
l pro
duct
s ov
er th
e pe
riod
1993
–99,
UR
agr
eem
ent]
with
a m
inim
um o
f 15
per c
ent r
educ
tion
for a
ny in
divi
dual
agric
ultu
ral c
omm
odity
); in
the
first
yea
r a 3
per
cen
t (of
dom
estic
con
sum
ptio
n) m
inim
um a
cces
s ex
pand
ing
to5
per c
ent o
ver t
he fo
llow
ing
six
year
s; re
duct
ion
in le
vels
of d
omes
tic s
uppo
rt fo
r agr
icul
tura
l pro
duce
rs; r
educ
tion
in le
vels
of s
ubsi
dies
and
oth
er fo
rms
of s
uppo
rt fo
rag
ricul
tura
l exp
orts
.
Aug
ust 1
993
Rei
tera
tion
of th
e fo
rmer
gov
ernm
ent’s
sta
nce
that
[Hos
okaw
aJa
pan
shou
ld s
tick
to th
e ric
e im
port
ban
for f
ood
adm
inis
tratio
n]se
curit
y re
ason
s.
Sep
tem
ber 1
993
Con
firm
atio
n of
the
Die
t res
olut
ion
bann
ing
rice
[PM
Hos
okaw
a]im
port
s.
Oct
ober
199
3A
gree
men
t to
‘min
imum
acc
ess’
arr
ange
men
t.[S
ecre
t tal
ks w
ithU
S g
over
nmen
t]
Oct
ober
199
3S
tate
men
t tha
t it w
as d
iffic
ult f
or J
apan
to in
trod
uce
[Agr
icul
tura
l Tra
deth
e pr
opos
ed ta
riff s
chem
e to
its
rice
trad
e.S
essi
on a
nd P
lena
ryS
essi
on, M
arke
tA
cces
s G
roup
of t
heU
R] [
Unc
onfir
med
offic
ials
’ and
med
iare
ports
]
24
Pro
posa
l to
intr
oduc
e th
e ta
riffic
atio
n sc
hem
e to
rice
afte
r a s
ix-y
ear m
orat
oriu
m p
erio
d, d
urin
g w
hich
Japa
n w
ould
mai
ntai
n m
inim
um-a
cces
s ric
e im
port
seq
uiva
lent
to 3
–5 p
er c
ent o
f its
dom
estic
cons
umpt
ion
Dec
embe
r 199
3T
arrif
icat
ion
with
out e
xcep
tion;
qua
ntita
tive
Dec
embe
r 199
3A
ccep
ted
the
UR
acc
ord
man
datin
g a
virt
ual a
cros
s-
[UR
Fin
al A
gree
men
t]re
stric
tions
on
agric
ultu
ral p
rodu
cts
will
be
conv
erte
d[J
apan
ese
the-
boar
d lib
eral
isat
ion
of J
apan
’s a
gric
ultu
ral m
arke
t
to im
port
tarif
fs, w
ith th
e m
ore
deve
lope
d co
untr
ies
gove
rnm
ent G
AT
Tan
d pa
rtia
l ope
ning
of t
he ri
ce m
arke
t in
the
form
of
agre
eing
to re
duce
agr
icul
tura
l im
port
tarif
fs g
radu
ally
Agr
eem
ent]
min
imum
acc
ess
from
4–8
per
cen
t of J
apan
’s to
tal
by 3
6 pe
r cen
t, w
hile
less
dev
elop
ed c
ount
ries
agre
edco
nsum
ptio
n (1
0 m
illio
n to
nnes
) ove
r six
yea
rs; i
n th
e
to re
duce
thei
r agr
icul
tura
l tar
iffs
by 2
4 pe
r cen
t; fa
rmfir
st y
ear o
f the
agr
eem
ent (
1995
), J
apan
’s im
port
subs
idie
s th
at d
isto
rt p
rodu
ctio
n m
ust d
imin
ish
by 2
0qu
ota
for r
ice
wou
ld b
e 37
9,00
0, in
crea
sing
to
per c
ent o
ver a
per
iod
of s
ix y
ears
from
199
5.75
8,00
0 to
nnes
in th
e ye
ar 2
000;
the
othe
r mai
nite
ms
wer
e as
follo
ws:
exp
ansi
on o
f the
whe
at im
port
quot
a by
35,
000
tonn
es a
nnua
lly, f
or a
fina
l tar
iff-r
ate
quot
a of
5,7
40,0
00 to
nnes
in th
e ye
ar 2
000;
redu
ctio
n in
the
stat
e-tr
adin
g m
ark-
up o
n w
heat
by
15 p
er c
ent o
ver t
he im
plem
enta
tion
perio
d; e
xpan
-si
on b
y 45
0,00
0 to
nnes
by
the
year
200
0 of
the
zero
-dut
y qu
ota
for i
ndus
tria
l-use
cor
n, w
ith th
ein
crea
sed
amou
nts
to b
e im
port
ed u
nder
the
‘new
-us
e’ c
ateg
ory
with
60
per c
ent o
f the
tota
l new
-use
quot
a fr
ee fr
om th
e bl
endi
ng re
quire
men
t; ex
pans
ion
of th
e ba
rley
impo
rt q
uota
by
8,50
0 to
nnes
eac
h ye
arof
the
impl
emen
tatio
n pe
riod
for a
fina
l tar
iff-r
ate
quot
a of
1,3
69,0
00 to
nnes
in th
e ye
ar 2
000;
redu
ct-
ion
in th
e be
ef ta
riff f
rom
50
per c
ent t
o 38
.5 p
er c
ent
subj
ect t
o a
spec
ial s
afeg
uard
pro
visi
on; r
educ
tion
in th
e ga
te p
rice
of p
ork
to ¥
524
per k
g, a
29
per
cent
redu
ctio
n fr
om th
e av
erag
e 19
86–8
8 pr
ice;
redu
ctio
n in
the
in-s
easo
n ta
riff o
n or
ange
s fr
om40
–32
per c
ent a
nd th
e ou
t-of
-sea
son
tarif
f fro
m20
per
cen
t to
16 p
er c
ent;
by th
e ye
ar 2
000,
elim
ina-
tion
of th
e se
ason
al d
istin
ctio
n in
gra
pefr
uit t
ariff
san
d re
duce
the
year
-rou
nd d
uty
to 1
0 pe
r cen
t; in
addi
tion,
Jap
an a
s a
deve
lope
d co
untr
y m
ust r
educ
eits
AM
S (A
ggre
gate
Mea
sure
men
t of S
uppo
rt)
by20
per
cen
t in
equa
l ins
talm
ents
ove
r six
yea
rs.
Sou
rces
:Ji
ji P
ress
, 21
Aug
ust 1
990,
16
Janu
ary
1991
, 1 M
ay 1
991,
18
Oct
ober
199
3; X
inhu
a N
ews
Age
ncy,
New
s B
ulle
tin, 2
Aug
ust 1
990;
Nih
on K
eiza
i
Shi
mbu
n, 8
May
199
0; J
A Z
ench
u N
ews,
No.
3, M
arch
199
4; H
atha
way
(198
7); D
aily
Yom
iuri,
14
Sep
tem
ber 1
993;
Oxl
ey (1
990,
pp.
116
–117
, 174
);
DC
N, 6
Jan
uary
198
8; A
BA
RE
(198
7); S
aeki
(199
1); U
SD
A (n
d);
For
eign
Agr
icul
tura
l Ser
vice
(US
DA
) (19
94);
AgE
xpor
ter (
June
).
25
As an area of trade friction, agriculture featured prominently in US–Japan trade disputes
and, on occasions, became the focal point of trade friction between the two countries. The
intensity of US–Japan conflict over particular farm products was vastly disproportionate to the
relative value of the potential trade lost to the United States. In fact, there was no logical
correlation between the objective economic value of particular markets to the United States and
their negotiating prominence and political importance in US–Japan agricultural trade negotia-
tions. Not only did the United States consistently enjoy a favourable balance of trade with Japan
in this sector, it could not credibly argue that achieving access to Japan’s agricultural market
would make much of a dent in America’s trade deficit figure with Japan.52 The reasons for the
intensity of trade friction generated by US–Japan agricultural market access disputes lay
elsewhere.
First and foremost, political rather than economic factors were driving the dispute on the
state-to-state level as well as on the domestic level within both countries. On the bilateral level,
agricultural trade issues became part of a broader set of issues that confronted the US–Japan
relationship (Coyle 1984, p. 11). On a number of occasions, questions relating to agricultural
market access became inextricably linked with the highly contentious problem of Japan’s
massive bilateral trade surplus with the United States. Like a lot of other products, farm
commodities got caught up in the wave of American demands for increased Japanese market
access as the United States attempted to deploy trade policy instruments to correct its trade
deficit. In fact the intensity of American trade pressure, particularly from the US Congress, was
highly correlated with the magnitude of the US–Japanese trade imbalance (George 1991, p.
6).53 For example, the United States launched its Japan beef market opening campaign in 1977–
78 as Japan’s global trade surplus soared to the unprecedented heights of over US$24 billion
in 1978 and its bilateral trade surplus with the United States to US$12.6 billion (see Table 2)
(Fukushima 1992, p. 297).
In the 1980s the deteriorating trade imbalance continued to provide a negative stimulus
to US–Japan agricultural trade disputes. Agricultural commodity negotiations could not be
isolated from the larger trade deficit question regardless of its objective causes, because of the
political incentives for linkage on the US side. The sizeable American trade deficit with Japan
generated considerable leverage in disputes about reciprocal market access and created a
general climate of friction and hostility between the two countries in which the American sense
of grievance could only be assuaged by Japanese concessions across a range of sectors, while
26
it encouraged the Japanese side to make concessions on agriculture in order to ease pressures
in other areas54 and appease the United States generally.
The United States also exploited agricultural trade issues to highlight general problems
of restricted access to the Japanese market and to try to make favourable deals on trade issues
as a whole (Fujitani 1986, p. 93).55 Its strategy was to focus on individual agricultural
commodities as symbols of Japan’s ‘closed’ market.56 Indeed, agricultural products were
particularly prone to this kind of political configuration. Because Japan’s agricultural markets
presented highly visible trade barriers they became symbolic of Japan’s behaviour (Sorich
1986, p. 1). Such symbolisation was also designed to magnify pressure on particular markets.
Terada (1993, p. 15) concludes that
by using symbolism in this way the US negotiators can put more pressure on Japan
to obtain considerable concessions from Japan on an issue, because this strategy
helps to draw the attention of politicians, citizens or the mass media in the US to
the issue. Symbolisation carries an ‘exaggerated effect’ which makes it easy for
some US policy makers to amplify the impression that the Japanese market is
considerably exclusive. Therefore, even if the issue were unlikely to contribute to
solving the trade imbalance of both countries, Japan cannot help but make a
concession on the issue to the US to improve the above impression.
For these reasons, the political and symbolic impact of Japanese market opening far exceeded
its economic value throughout the course of US–Japan agricultural trade negotiations.
On the domestic level, influential farm lobbies in both countries took diametrically
opposed positions and lobbied their governments furiously to protect or pursue their interests
in international negotiations.57 On the US side, the prominence of individual agricultural
commodities in US–Japan negotiations also reflected specific domestic industry conditions in
the United States,58 the potential economic value of greater quantities of exports to specific
groups of American producers,59 their particular need for expanded export markets at the time,
the amount these producers cost the US government in terms of subsidies and other forms of farm
support, and the amount of leverage that they and their organisations could exert on the
government to negotiate on their behalf.60 The beef and citrus constituencies in the United
States, for example, were represented by powerful political lobbies (Sato and Curran 1980, p.
5). American rice producers were also well organised and highly targeted in their approach to
27
the Japanese market. Although rice was not a major agricultural product in the United States,
2.9 million tonnes out of a total production of 5.3 million tonnes was exported. Expansion of
rice export markets was, therefore, a serious issue for US rice producers.61 These domestic
pressures in the United States were ranged against antagonistic pressures in Japan coming from
politically influential and well-mobilised but economically inefficient farmers facing the
prospect of increased competition from overseas suppliers.
Lastly, from a US perspective, acrimony in agricultural trade disputes with Japan was
consistently exacerbated by the fact that opening the Japanese agricultural market required the
application of sustained pressure over a considerable period of time. There were several long-
standing disputes in agriculture which tended to aggravate the American sense of frustration.
For example, the dispute over beef and citrus began in the early 1960s and extended into the late
1980s, with peaks of intensity in the late 1970s, early 1980s and late 1980s (see Table 2). Apples
had an equally long and frustrating history. They were liberalised in 1971 but banned from
Japan until 1994 on quarantine grounds. Rice had a comparatively short run of seven to eight
years, but the larger issue of rice liberalisation is yet to be resolved (see Table 4).
Channels of pressure
American pressure on Japan to open its agricultural markets was applied both directly in
bilateral, country-to-country negotiations and indirectly through multilateral channels, with
negotiations at the bilateral and multilateral levels frequently conducted in parallel, sequential
and interactive fashion. In the context of multilateral trade negotiations, American pressures on
Japan tended to be more diffuse and often related to the pursuit of broad trade principles
embodied in the GATT. American pressure was also applied in other multilateral fora such as
the summit meetings of the industrialised nations, OECD meetings,62 and gatherings of the
agricultural ministers of selected states.63 Amongst the various GATT rounds, the UR was
easily the most significant for agriculture64 because it sought to tackle the underlying domestic
policy causes of agricultural trade protection65 and to ‘bring all measures affecting import
access and export competition under strengthened and more operationally effective GATT rules
and disciplines’.66
Over time, the United States became increasingly inclined to submit its market access
problems with respect to specific Japanese agricultural markets to the GATT rather than to rely
solely on bilateral negotiations, with American pressure generally complemented, underlined
28
and magnified by pressures arising from GATT rulings and negotiations. A number of products
significant in US–Japan agricultural market access disputes were subject to this dual negotiat-
ing process.67 For example, US–Japanese discussions on beef and citrus figured in the Tokyo
Round,68 but resolution was achieved in a bilateral agreement engineered in 1978 by the
Japanese and American negotiators, Strauss and Ushiba (see Table 2).69 Multilateral trade
negotiations under GATT auspices also occurred in the later stages of the beef trade dispute and
preceded the bilateral liberalisation agreement of June 1988 (see Table 2).70 Similarly, the
United States moved the battle over liberalisation of 12 miscellaneous agricultural product
categories to the GATT arena when bilateral negotiations failed to achieve a result in the early
1980s (see Table 3). According to Hayashi (1986, p. 125), this act marked a significant shift
in American agricultural trade negotiating strategy towards Japan. It combined a focus on
market opening for individual products with reconsideration of Japan’s agricultural protection
policies in general.
The shift in American trade strategy was consolidated at the UR where the main target
of pressure moved from liberalisation of individual products to Japan’s agricultural support and
protection system as a whole. This reflected the dominant US objective of achieving a reduction
in agricultural protection worldwide by subjecting agriculture (including American and
Japanese farmers) to market-based trading rules. The American UR agenda aimed at nothing
less than ‘comprehensive reform across the broad range of policies that create barriers and
distort trade in agricultural products’ (Hathaway 1987, p. 4).
American handling of the US–Japan rice trade dispute exemplified this approach. US rice
producers unsuccessfully attempted to push the US government into making the rice issue with
the Japanese government a target for bilateral negotiation and retaliation. The US administra-
tion rejected both petitions of the American Rice Millers’ Association (RMA) under Section
301 of the US Trade Act.71 In the judgement of the US Trade Representative, Clayton Yeutter,
the multilateral environment of the GATT offered greater potential for finding a solution that
would result in American rice exports to Japan.72 The State Department shared this view,
arguing that the US administration resisted the attempt to make rice the specific focus of US–
Japan bilateral trade access negotiations because it did not see it in America’s interest to
approach the rice issue bilaterally.73 As far as the official American government position was
concerned, the importance of rice was principally in terms of its implications as a multilateral
agricultural trade issue at the GATT rather than as a bilateral US–Japan trade issue. Rice was
only one item on a comprehensive negotiating agenda targeting many countries and hundreds
29
of farm products. The UR was the major priority and therefore it remained the principal and most
appropriate venue for discussing rice because of the larger and more important issue of
agricultural trade reform covering not only Japan but all countries, and not only American rice
producers but all producers.74
In relation to this comprehensive trade negotiation objective, rice retained its prominence
principally because of its potential to remain a stumbling block to Japan’s accession to a GATT
agricultural trade agreement on which depended the success of the agricultural negotiations as
a whole. Rice was the centrepiece of negotiations involving Japan and the primary determinant
of the Japanese government’s willingness to accede to a final deal on agricultural trade. This
was seen by the United States and other countries as critical to the success or failure of the UR
and thus to an overall GATT settlement (Hathaway 1987, p. 3).75 By a process of deductive
logic, it became clear that if Japan would not agree to rice market opening, it would not agree
to agricultural trade reform and therefore a GATT UR settlement.
The larger agenda on which the United States consistently placed priority in all dealings
with Japan and other countries during the UR explains the strong American resistance to the
Japanese strategy of attempting to make rice an exception to the general principle of
tariffication.76 This was viewed as a ‘deal breaker’ (Feketekuty 1993). In the US view, if Japan
were allowed an exception on rice, this would open the door to special pleading on a whole range
of products from other countries. The American position was to make tariffication non-
negotiable because of the manifest difficulties of trying to solve trade problems by tackling the
domestic policies of different countries individually. The diversified domestic agricultural
policies of member-countries had to be subjected to standardised rules that facilitated further
reductions in agricultural trade barriers.
The pressure the United States exerted on Japan in relation to rice thus stemmed from its
importance in relation to America’s larger GATT agenda rather than its bilateral significance
which was primarily symbolic. Rice represented Japan’s most impregnable agricultural market
and thus had a political significance, that far exceeded its dollar value as a commodity
potentially traded at the bilateral level.77 If anyone, it was the Japanese side and particularly
the Japanese media that made rice into a bilateral issue. The latter tended to treat the whole
question of agricultural trade liberalisation under the GATT as a Japanese rice import issue
(Saeki 1991, p. 18). From the Japanese perspective rice loomed so large as a problem that it
overshadowed all others at the UR. The GATT and the question of Japan’s rice market opening
became synonymous in the public mind.
30
In the event, while resisting the option of taking up rice as a formal bilateral issue, the
United States applied pressure on Japan to open its rice market both in formal GATT
negotiations as well as in associated bilateral discussions.78 In the closing stages of the UR,
intensive farm trade talks were conducted between the United States and Japan to help bring the
negotiations to a successful conclusion,79 with the United States making a great effort to settle
the rice market issue at this time (October–November 1993).80
The domestic political equation
Looking at the domestic political equation in the absence of gaiatsu, the prognosis for Japan’s
agricultural trade liberalisation was not particularly favourable. The Japanese agricultural
sector was a potent political constituency, drawing substantial advantage from electoral
malapportionment which empowered rural voters at the expense of their urban counterparts,
universal farm household membership of an agricultural cooperative organisation (Nokyo)
active in national and local elections and strong connections with farm politicians harvesting
votes from agricultural protection policies. Farmers’ power at the grass-roots was augmented
by a well-entrenched bureaucratic apparatus centring on the Ministry of Agriculture, Forestry
and Fisheries (MAFF) committed to maintaining a regulated agricultural economy and a large
number of semi-public agricultural organisations charged with administering detailed aspects
of the agricultural protection system. In addition to these political and institutional factors,
vested agricultural interests were supported by a strong public interest in the maintenance of
food safety, food security, preservation of the environment and the survival of Japanese
agriculture and its associated socio-cultural traditions.
This ‘cohesive industry coalition [was] set against a diffuse coalition of domestic losers
from protection’ (Hillman and Ursprung 1988, p. 743), principally Japanese taxpayers and
consumers, whose tolerance for the relatively high cost of food was engendered by the declining
proportion of household income spent on food as well as sensitivities to market opening on non-
economic grounds. Opposition from industry to agricultural protection was also mitigated by
the shift from a labour-intensive to a more capital-intensive and skill-intensive structure,
reducing employers’ reliance on low wages for workers and thus concerns about food costs
(Anderson and Hayami et al. 1986).
The domestic balance of power in favour of the agricultural protectionists made Japanese
market opening highly improbable in the absence of gaiatsu. Although domestic pro-liberali-
31
sation forces sought to advance their own liberalisation goals and were strengthened by gaiatsu
over time, agricultural trade liberalisation occurred historically when these domestic voices
were muted (in the 1960s and early 1970s) and when international demands were virtually the
sole pressure for change. In the absence of concerted pressure from outside it is highly unlikely
that Japan would have liberalised its agricultural trade in the way it did, to the extent it did and
at the pace it did. Indeed, from the Japanese government’s perspective, the entire process of
agricultural trade liberalisation was at a forced pace. The major thrust of official government
policy throughout the long sequence of pressure on various agricultural markets was to block
change and hold the line against penetration of particular agricultural markets by foreign
suppliers. (The government’s responses are detailed in Tables 1 to 4.)
This is not to suggest that gaiatsu alone would have remained sufficient to produce change
over the longer term, or that domestic pressures in favour of agricultural trade liberalisation
were not instrumental in helping to produce liberalising outcomes or were irrelevant to the
political calculus of decisionmakers. On the contrary, the progressive entrenchment of agricul-
tural interests, their mobilisation of strong defensive power as gaiatsu intensified and the
targeting of agricultural products subject to higher levels of domestic politicisation (rice being
the quintessential example) meant that the need for gaiatsu as a ‘tailwind’ to assist domestic
reformers and for an active and latent partnership between external and internal agents of
pressure increased as time went by.
From the late 1970s onwards, growing domestic pressure (naiatsu) for agricultural trade
liberalisation began to emerge from Japanese big business organisations, from Japanese
agricultural economists convinced of the need to apply neo-classical solutions to Japanese
agriculture, from the media acting as spokespersons for Japan’s politically undervalued and
under-represented consumers and from elements in the Japanese conservative party leadership
and the bureaucracy concerned about Japan’s international trading interests. Amongst these
groups, the most vocal source of opposition to Japanese agricultural protection was the
influential Federation of Economic Organisations (Keidanren) representing the interests of
Japanese industrial exporters as well as Japanese food processors using high-cost domestic
inputs.
Nevertheless, for those in policymaking circles seeking change but immobilised by
considerations relating to political costs, procedural obstacles and the strength of entrenched
agricultural interests, gaiatsu was a very necessary ‘third force’ to assist them in overcoming
their domestic political difficulties.81 Gaiatsu provided the convenient pretext for liberalising
32
decisions, enabling the government to externalise the blame for market opening moves and thus
reduce the potential costs of the change. Furthermore, a number of government leaders
welcomed foreign pressure for agricultural trade liberalisation as a catalyst for introducing a
much broader program of agricultural policy reform. They tried behind the scenes to get the
United States to request trade liberalisation (Tokokura 1989, p. 78) in order to make the
Japanese people believe that Japan must open its agricultural markets as a means of changing
the whole structure of domestic agriculture. Even the MAFF was accused of using external
market opening pressures for its own policy purposes.82
The tendency of domestic actors to script gaiatsu demands and to encourage outside
agents to apply pressure on the Japanese government occurred at a number of critical junctures
during Japan’s agricultural trade liberalisation process. In the late 1970s, Japanese importers
who did not have orange import licences linked up with American orange producers and their
supporters in Congress in an endeavour to influence Japanese policies indirectly to achieve an
expansion of orange imports into Japan and hopefully an increase in the number of orange import
licences (Sato and Curran 1980, p. 57). Similarly, Japanese officials with contacts with their
departmental equivalents in the US administration were not above applying pressure on their
own government via their American counterparts. The Foreign Ministry (Gaimusho), for
example, encouraged American officials to take the offensive with a very specific set of
demands in relation to beef and citrus in the late 1970s as a more effective means of getting a
positive response from the MAFF than general admonitions about Japan’s agricultural trade
policy (Sato and Curran 1980, p. 14). There was even a rumour circulating that the Foreign
Ministry had briefed the American side in what to say to Japanese farm politicians on a visit
to the United States on the beef and citrus liberalisation issue (Sato and Curran 1980, p. 52).
Another example of such manipulation in relation to trade liberalisation issues occurred in 1982
at the OECD ministers’ conference in Paris. US Trade Representative (USTR) William Brock
handed a letter to four Japanese Cabinet members (representing the Ministry of International
Trade and Industry [MITI], the Economic Planning Agency, the Foreign Ministry and the
Ministry of Finance). The letter included a 34-page list of requested items, both agricultural and
industrial, for market access and tariff reductions to be announced in the next trade package by
Japan, as well as a five-page draft announcement for Prime Minister Suzuki to make on opening
Japan’s market. The proposed announcement from the USTR used English expressions that
made some Japanese suspect the letter was initially written by a Japanese person, and according
to one theory, by a pro-liberalisation government official in MITI although its author was never
33
publicly identified (Reich and Endo 1983, p. 32). Much later during the negotiations on rice,
the Sake Brewers’ Council in Japan, which shared a commonality of interest with US rice
exporters in opening up Japan’s market for rice imports, contacted the American Rice Millers’
Association (RMA) in the 1986–88 period to offer encouragement to the group, saying that they
supported the RMA but could not say so publicly.83
As time went by, the United States also began to deploy increasingly successful gaiatsu
strategies directed at expanding the domestic impetus for change in Japan.84 This involved
attempts directly to mould and influence the domestic process of consensus formation within
Japan in favour of market opening by recruiting allies to the US cause, by forming transnational
coalitions, by underlining and reinforcing the American case within the domestic policy process,
and by attempting directly to expand the ‘active constituency’85 aligned with its objectives.
Firstly, alliances of convenience were crafted between Japanese and American govern-
ment agencies with the impetus in this case coming from the US side. The US State Department
played up its coalition of interest with the Japanese Foreign Ministry on a range of market access
questions, including agriculture. At one point this was described as an American attempt ‘to
accomplish its objectives by a short cut, by encircling and isolating MAFF and the agricultural
interests with the nonagricultural interests’ (Reich and Endo 1983, p. 94). As one Foreign
Ministry official commented, ‘Japan’s negotiations with the United States do not seem to be
Japan versus the United States as much as an alliance of Japanese internationalists and
Americans versus certain Japanese interests’ (Ogura 1982, pp. 137–8). On the beef and citrus
market access dispute the same official observed that ‘Sometimes an environment is created in
which Japanese and American negotiators join together to attack Japanese domestic agricultural
interests’ (Ogura 1982, pp. 137–9). This particular pattern was accorded with forcing
‘agricultural trade concessions from MAFF in the past, and could do so again in the future’
(Reich and Endo 1983, p. 33).
Secondly, the United States extended the focus of its gaiatsu strategy beyond government
elites to a range of other groupings and domestic constituencies in order to enhance the multiplier
effect of naiatsu. The former Director for Japanese Affairs, Office of the USTR, theorised that
‘The goal is to build as solid a coalition of domestic allies in Japan as possible to apply naiatsu
[pressure from within] on the bureaucracy to undertake changes consistent with U.S. interests’
(Fukushima 1993, p. 60). On the rice market issue, US Secretary of Agriculture, Clayton
Yeutter, visited Tokyo in August 1990 and met leaders from Keidanren, addressed the
American Chamber of Commerce, and met with Ishida Koshiro, Chairman of the Central
34
Executive Committee of the Clean Government Party (Komeito), which drew support mainly
from urban voters, and which was considering a revision its policy platform in order to allow
some rice imports.86 Other meetings involved leaders of other opposition parties such as Doi
Takako of the Japan Socialist Party (Nihon Shakaito) and Ouchi Keigo, Chairman of the
Democratic Socialist Party (Minshato).
In other instances, loose transnational coalitions were formed between internal and
external interest groups. In the 1980s, American and Japanese business groups started to
cooperate with each other to present ‘proposals’ demanding the liberalisation and structural
adjustment of the Japanese economy, including reform of agricultural protection.87 Japanese
public opinion was also actively targeted. One study reported the existence of planning
documents in the US Embassy in Tokyo ‘in which the American negotiators strategized about
how best to influence public opinion’ (Schoppa 1993, p. 379, fn. 67). In March 1994 Secretary
of State Warren Christopher reportedly bypassed the Japanese government and took America’s
case on trade directly to the people: ‘If they’ll permit an outsider to be heard, I think it may be
helpful’, he said.88
Amongst broad sections of the Japanese public, the United States most clearly chose to
identify its interests with those of Japanese consumers, taking the position that ‘liberalization
and deregulation measures are for the benefit of Japanese consumers’ (Ito 1993, p. 402). This
strategy was facilitated by the appreciation in the yen’s value consequent upon the September
1985 Plaza Agreement. Yen revaluation strengthened the buying power of the yen for
agricultural imports at the same time as it boosted the dollar value of domestic commodity
prices, thus expanding the differential between Japanese domestic and international food prices.
US spokespersons made numerous representations on behalf of Japanese consumers on the need
for Japan to import cheaper food. These representations were made both in direct negotiations
with the Japanese government and in the domestic and foreign media.
The American defence of Japanese consumer interests was most prominent in the case of
the rice liberalisation. The United States reportedly aroused public opinion by complaining
about the irrationality of Japanese rice policies from the consumer standpoint (Nagao 1990, p.
27). Opening the rice market was portrayed ‘as a step that will rectify an inequity within Japan
and that will benefit the great majority of the Japanese’ (Inakage 1992, p. 55).
As a result of American championing of the Japanese consumers’ cause, a US–Japanese
consumer alliance became clearly discernible. The United States was portrayed as ‘an interest
group representing the voice of Japanese consumers’ (George 1991, p. 18) and ‘as a surrogate
35
opposition party presenting the only true set of alternative policies to the government’s’ (George
1991, p. 18). This form of gaiatsu filled the void left by the poor representation of the anti-
protectionist case by Japan’s opposition parties and by consumer organisations that rarely put
the consumers’ point of view on agricultural trade matters. In this way, gaiatsu from the United
States ‘seemed to end up compensating for the shortcomings of consumer groups in Japan’
(Terada 1993, p. 23). The emergence of a US–Japanese consumer coalition also bolstered the
political fortunes of Japanese political leaders who based their policy appeals on consumer
rather than producer interests.89
The advantages to consumers and other beneficiaries of Japan’s agricultural trade policy
reform highlighted by US trade negotiators and widely publicised by the Japanese media thus
became important elements in the political debates around agricultural trade liberalisation in
Japan. They enabled the government to identify important domestic interests advantaged by
change which helped to engender both sectoral and public acceptance of market opening
decisions.
Policy rationalisation also took the form of joint articulation by Japanese and American
leaders of the national interest case for liberalisation in terms of the likely trade benefits to Japan
of a liberalised international trading regime. Indeed, invoking GATT principles and emphasis-
ing the significance of a successful outcome for the UR in terms of materialising the benefits
to Japan of a more liberal international trading regime was common practice for all pro-
liberalisation interests in the agricultural trade liberalisation debate, including reformist-
minded government party politicians, business groups and the mass media. Moreover, GATT
trade negotiations raised the prospect of deals advancing side-benefits and compensations that
would not have been possible if the Japanese government had chosen to act unilaterally. This
meant that the costs of change could be balanced against the benefits generated and reciprocated
through the compliance of other parties to multilateral trade agreements.
As relayed through GATT negotiation processes, foreign pressure also carried the
sanction of the international community and therefore legitimised the compliance of domestic
authorities. From the perspective of a Japanese trade negotiator, the ‘products or industries that
lost their trade barriers because of outside pressure were generally understood to be making
sacrifices for the sake of smoothing Japan’s relations with the outside world’ (Yoshioka 1982,
pp. 352–3).
Finally, the spectre of US trade retaliation in the face of Japanese recalcitrance on
agricultural market access issues forced a reassessment of the balance of Japan’s national
36
interests in maintaining agricultural trade protection. Organisations such as Keidanren repre-
senting Japan’s major industrial exporters made numerous public representations underlining
the importance of the US export market for Japan’s manufactures and the need, therefore, to
comply with American demands for Japanese agricultural trade liberalisation.
Conclusion
Gaiatsu provided the single greatest challenge to Japan’s agricultural protection system.
Japanese authorities accommodated the interests of other state actors (principally the United
States) as well as the collective interests of international groupings, represented in the form of
requests, demands and pressures channelled through bilateral and multilateral negotiation
processes. Although the Japanese government constructed highly defensive positions at each
juncture in these negotiations, in the end it conceded to foreign market opening pressure, citing
above all the need to accommodate external demands in the overall national economic interest.
In the absence of external pressure, agricultural trade liberalisation would have taken
considerably longer to occur. With the assistance of gaiatsu, the Japanese government was able
to institute reforms resisted by powerfully entrenched agricultural interests and hence ultimately
to control the political influence of its domestic farm lobby. Moreover, because Japan’s
agricultural trade policy was but the external face of domestic farm policy, market opening for
farm products forced associated domestic adjustments,90 thus partially internationalising
Japan’s agricultural policy system.
In Japan’s case, gaiatsu was, therefore, a necessary condition for agricultural trade
liberalisation. It provided both the initial impetus and sustaining momentum for change,
although as time went by, external pressure provided a convenient focus around which domestic
pro-liberalisation forces could mobilise. Moreover, the principal agent of external pressure —
the United States —became more adept at manipulating Japanese domestic constituencies to its
own advantage. It publicised its cause directly to affected interests in an endeavour to engender
support for agricultural trade liberalisation ‘behind the lines’, it formed coalitions with domestic
actors in order directly to infiltrate the domestic policy process, and it assumed the role of a
quasi-domestic interest group, targeting domestic political institutions and leaders with various
lobbying and publicity activities. All these actions were undertaken in order to help fashion a
domestic policy consensus in favour of change.
37
In this way, gaiatsu influenced the domestic political equation, altering the relative
balance of power between pro-agricultural and anti-agricultural protection groups and thus
changing the calculations of ruling party politicians with respect to the likely political costs and
benefits of liberalisation. Reinforcing this changing domestic political calculus was the
powerful national interest argument in favour of the potential trade benefits of a global
agreement to liberalise trade and the potential international trade costs to Japan of a failure to
bring its policies into line with such a GATT-sponsored agreement.
The utility of gaiatsu as an agent of change in Japan’s agricultural trade policies
illustrates how the domestic politics of a state can be penetrated by external political pressures
which significantly alter the policy parameters for national decisionmakers and the relative
power configurations of domestic groups. The formation of transnational coalitions and
attempts by external agents to influence internal political processes as quasi-domestic actors
significantly blurred the boundaries between international and domestic systems.91 To some
extent this was facilitated by the nature of the policies targeted by gaiatsu: protection of
agricultural interests in Japan imposed costs on certain domestic groups which became natural
allies for agricultural exporting interests in the United States.
Gaiatsu can thus facilitate a particular kind of internationalisation of domestic
policymaking. On the issue of Japanese agricultural trade liberalisation, intra-state politics was
no longer an arena limited to domestic actors or geared just to the interests of domestic actors;
gaiatsu actually changed the nature of the policymaking process itself.
38
Notes
1 The extensive international political economy literature includes Kojima (1988), Ohma(1990), O’Brien (1992), Epstein et al. (1992), Goodman and Pauly (1993) andKeohane and Milner (1996).
2 Sakakibara (1995, p. 9) gives the example of countries where domestic banking systemsas well as monetary policy mechanisms have not fully developed. He argues that ‘ifderegulation is forced on those countries, they simply lose sovereignty in policy controlson their own economies and are subjected to volatile movements of international moneywithout having effective policy instruments to monitor them.’ McMichael (1993, p.200) also makes the point that ‘global capital markets have outstripped the power ofnational regulators to defend their currencies’.
3 In McMichael’s (1993, p. 204) view, ‘current institutional and private forms offinancial and productive internationalization threaten the coherence of national formsof political and economic organization’.
4 These included the principle of non-discrimination, also known as the ‘most-favoured-nation’ (MFN) clause, which stipulated that trade advantages negotiated between anytwo GATT countries had to be immediately made available to all others. GATT rulesalso incorporated the principle of reciprocity, which meant that when one countrylowered its tariffs on another’s exports the other had to lower its tariffs in return. TheMFN clause then extended the concession to other GATT members. Additionally,GATT membership involved an obligation on member-states to bind tariffs. They couldonly be lowered, not raised.
5 According to McMichael (1993, p. 210), as an economic institution, the GATT was‘premised on multilateral consensus, internalized by each state, of a set of common rulesof economic organization and behaviour’. Freider Roessler also argues that although theGATT was ‘formally an international agreement among countries [it became] function-ally part of the domestic constitutional order of each contracting party’ (quoted in Greig[1987, p. 314]).
6 As part of this review process, a GATT Secretariat report on Japanese trade policies andpractices released in October 1992 submitted details of the extent and economic impactof Japan’s rice protection. See The Japan Times, 15 October 1992.
7 According to Carmichael (1986, p. 351), the GATT had ‘long-standing practicesintended to promote the international transparency of protection measures imposedby member countries’.
8 According to a leading Japanese economist (Yamazawa 1995), APEC is shaping up asa vital part of the process of helping ‘Japan to promote the role of deregulation andliberalisation’ by regularly monitoring and reviewing Japan’s plan for trade reform.
39
9 The OECD’s 1989 economic investigation report for Japan, for example, criticisedJapan’s protectionist agricultural policies for increasing the burden of consumers andinflating land prices in metropolitan areas. See Asahi Shimbun, 27 December 1989.
10 The interaction between international negotiating and domestic political processes hasbeen modelled by Putnam (1988) in the form of two-level games. The model underlinesthe complexities of political bargaining that occurs simultaneously at both the interna-tional and domestic levels and the linkages between these two processes. This modelwas explicitly applied to the case of Japan’s rice market opening by Rapkin and George(1993).
11 As noted by Greig (1987, p. 313), ‘the very existence of negotiations helps governmentsforestall protectionist pressures and encourages them to think more widely’.
12 It was observed, for example, that the success of international trade negotiations on thedomestic front has been linked to their mobilisation of a ‘coalition of export-orientedindustries to offset those import competing industries that are disadvantaged by tradeliberalization’. See Winham (1991, p. 34).
13 Carmichael (1986, pp. 343, 355) pointed out that the ‘GATT was formed to helpcountries resist pressures for protection from particular interests at home [and] intendedto help national governments resist defensive domestic pressures.’ Freider Roessler alsoargued that ‘The function of the GATT as a negotiating forum is to enable countries todefend the national economic interest, not against the national interest of other countriesbut against sectional interests within their own and other countries’ (quoted in Greig[1987, p. 314]).
14 McMichael (1993, p. 201) commented that ‘The formal goals of the … Uruguay Roundembody multilateral principles of international exchange, designed to secure individualnational state authority against internal claims for restraints of trade on the part ofimmobile producers and their lobbyists’.
15 Rausser (1994, p. 2), for example, argued that the Reagan administration hoped that ‘theUruguay Round could be successfully completed and that an external agricultural codewould necessarily be imposed as a constraint on future domestic U.S. farm legislation.’According to Paarlberg (1992, pp. 27–42), one of the key considerations for the USadministration was to use the UR as a means of hastening the process of farm policyreform within the United States in an effort to reduce US farm trade barriers and thebudgetary cost of subsidies.
16 Rausser (1994, p. 14) notes that this ‘line of reasoning characterized the mind set ofparticipants at the outset of the Uruguay Round’.
17 Rausser (1994, p. 16), for example, talks about the ‘nonseparability’ of domesticpolitical-economic forces and the GATT negotiations.
40
18 Ito (1993, p. 393), for example, demonstrated using a standard partial equilibriummodel that in the agreements between Japan and the United States over semiconductorsand cars that both Japanese producers and consumers were losers, while the onlywinners were American producers. This was reflected in the degree of Japaneseresistance to acceding to American demands for increased access to these markets.
19 This is captured by the Putnam concept of ‘synergistic linkage’. Putnam (1988, p. 447)argues that international bargaining processes may create ‘a policy option … that waspreviously beyond domestic control’.
20 The general theoretical principle that ‘Power arises from an asymmetrical interdepend-ence’ has been advanced by Knorr (1977, p. 102).
21 As Schoppa (1993, p. 365) notes, ‘Weak nations are likely to agree to policy changesdemanded by powerful nations when those demands are backed up by explicit threatsof retaliation’.
22 Examples of these benefits are aid and security guarantees.
23 According to Ito’s analysis, in the case of US market access, deregulatory and structuralimpediments demands which collectively covered beef, citrus, rice, satellite procure-ment, antimonopoly law enforcement and deposit interest deregulation, the winnerswere Japanese consumers (and US producers), while the losers were Japanese produc-ers. On the other hand, both US producers and Japanese producers and consumers werethe losers from revisionist ‘results-oriented’ type pressures. See Ito (1993, p. 392). Thegeneral point is made elsewhere in relation to the implementation of Japan’s structuraladjustment policy that ‘policy change … impose[s] uneven costs and benefits oninterested parties’. See Lesbirel (1993, pp. 4–5).
24 According to Putnam (1988, p. 445), ‘when the costs and/or benefits of a proposedagreement are relatively concentrated, it is reasonable to expect that those constituentswhose interests are most affected will exert special influence on the ratification process[of international agreements]’.
25 As Hollerman (1980, p. 217) has argued, Japan’s ‘dependence on the world economyfor the essentials of its existence [compounds the] fear of being isolated in the worldcommunity. This was demonstrated in the wake of the UR agreement. The Japaneseaversion to discord and fear of appearing to be out of line helped rally support forpassage of UR legislation in late 1994.
26 The Japanese term for ‘reactive state’ is gaiatsu hannogata kokka (a state which is ofthe type that responds to foreign pressure). Calder (1988, p. 518) elaborates on the‘reactive state’ as follows: ‘the state fails to undertake major independent foreigneconomic policy initiatives when it has the power and national incentives to do so … andit responds to outside pressures for change, albeit erratically, unsystematically, andoften incompletely’.
41
27 Putnam (1988, p. 437) defines a ‘win-set’ as the set of all possible internationalagreements that would ‘win’ — that is, gain the necessary majority support amongstdomestic constituents.
28 This description was based on Japan’s inability to resist international pressure onagricultural trade access issues at the UR. See Ouchi (1991, p. 95). According to Oxley(1990, p. 160), while Japan might have supported the Round strongly in principle, ‘onactual, substantive issues, its behaviour was reactive’.
29 According to one assessment,‘There is no clear leadership. Important policy items seemto be decided behind closed doors.’ See Ito (1993, p. 406).
30 Tokuyama (1991, p. 37) argues that ‘Groupism, passive risk avoidance, and lack ofdecisive leadership are the hallmarks of Japanese business and government in thepostwar era’.
31 This point has been argued by a number of analysts. See, for example, Lincoln (1993,p. 208). The so-called ‘truncated pyramid’ or ‘headless chook’ or ‘headless monster’model of Japanese policymaking process has been most actively proselytised by vanWolferen (1988, p. 5).
32 In December 1994 many LDP factions publicly announced that they would dissolvethemselves as formal organisations, although they added the proviso that they wouldcontinue to function as study groups. In theory, therefore, the main factional groupingswithin the LDP have now been dissolved, although in many cases the old factionalallegiances remain alive in the interpersonal relationships amongst politicians. Further-more, in the post-October 1996 Diet handbook, the official factional affiliations of LDPmembers are again being listed.
33 According to Ito (1993, p. 406), ‘No one seems to be in charge, but somehow a groupof powerful players form a consensus’.
34 One analyst commented that ‘Initiative tends to be confined to issues with minimum riskand controversy and with relatively calculable costs’. See Hellman (1988, p. 371).
35 Japan has undergone reform of its Lower House electoral system and will hold electionsunder the new system in October 1996. The Upper House electoral system remainsintact.
36 The pattern of Japanese responses to American gaiatsu is analysed in detail in George(1991, pp. 5–19).
37 See Cowhey (1993, p. 318), referring to the argument in Calder (1988a, p. 40).
38 The targets of US gaiatsu can be categorised into demands for market access (such astariff reduction and quota abolition), market shares, export restraints, removal ofstructural impediments and domestic deregulation, all designed either to increaseAmerican exports to Japan or decrease Japanese exports to the United States.
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39 See, amongst others, Funabashi (1989), Orr (1990), Schoppa (1991, pp. 307–23),George (1991), Purrington (1991, pp. 307–23), Inoguchi (1991, pp. 257–74), Tanakaand Shigemori (1993, pp. 19–32), Lincoln (1993), Allinson (1993, pp. 1–16), Donnelly(1993, pp. 329–50) and Nagao (1991).
40 A study of the impact of gaiatsu on the policy sectors affected by the AmericanStructural Impediments Initiative (SII) — Japan’s distribution system, land policy,savings and investment balance, its exclusionary business practices and keiretsubusiness groups — revealed somewhat variable results, depending on a number offactors including the power of external actors to mobilise domestic support. SeeSchoppa (1994). Schoppa’s study offered ‘generalizations about when foreign pressurewas likely to yield the most response, and how foreign pressure produces policyoutcomes which were previously blocked due to domestic political constraints’ (p. 1).The direct intrusion of SII pressures into the policy formulation process in Japan,however, is powerfully illustrated by the FY1991 budget process, in which the interimSII report which recommended a large increase in Japan’s public works investmentcreated an expectation of a big rise in the amount allocated to public works expenditurein the budget. This prompted the LDP’s ‘tribe Diet members’ (zoku giin) to competeactively for a share of the increase on behalf of their clientele sectors and industries.Furthermore, the ceiling on investment-related expenditure in the draft ministerialbudgets (gaisan yokyu) for FY1991 was relaxed. Asahi Shimbun, 3 June 1990.
41 This is the perspective gained from a study of Japanese industry regulation whichconcluded that ‘American influences were projected directly into Japanese domesticpolitics both through American companies and American trade negotiations’ (Wilksand Wright 1991, p. 5).
42 Lincoln (1993, p. 209) explains Japan’s susceptibility to US gaiatsu as coming about‘as a result of historical legacy (the war and occupation), a vague sense of internationalhierarchy (the Japanese still view the United States as more prestigious and powerfulthan their own country), an overwhelming focus on maintaining access to Americanmarkets for goods and investment (given the large shares of exports and investmentdestined for the United States), and a concern for maintaining the US–Japan mutualsecurity treaty as the cornerstone of Japanese foreign policy.
43 This attitude is summed up by Hiroshi (1992, p. 25). He argued that ‘Japan’s onlypractical course of action is to kowtow to Washington in hopes that it will defend ouroverseas investments in its capacity as global cop. We must avoid confrontation withthe United States at all costs. On the rice-import issue, we must assure Washington thatwe will agree to market opening before the Uruguay Round of the General Agreementon Tariffs and Trade draws to an end. If Americans complain about the inefficiency ofour distribution system, we must promise to fix it’.
44 According to a Japanese official negotiating with the United States during the SII talks,Japanese dependence on the American market induced the Japanese government to
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agree to the US demand to open these talks. See Nomura (1990, p. 10). Fujitani (1986,p. 102) also argued that the principal axis of substantial domestic pressure relating toJapan–US agricultural trade friction was the maintenance of close economic relationswith the United States, particularly the fact that America was an important market forJapanese manufactures.
45 America’s significance as an export market has been declining in relative importancein recent years, but it is still Japan’s largest single export market at 29 per cent. If exportsfrom Japanese-owed companies in East Asia are included in the figures, this percentagewould rise to traditional levels (35–40 per cent).
46 According to Terada (1993), ‘Where such deep interdependence exists, domesticintervention through external pressure may become conventional’ (quoting fromKojima [1988, p. 158]).
47 Ouchi (1991, p. 95) described Japan as weak to external pressures, especially from theUnited States because of its considerable trade imbalance.
48 McCall Rosenbluth (1993, p. 421) also argues that ‘Even in a post-Cold War world,Japan continues to rely on the United States for much of its defense. Second, as long asJapan’s exporters rely disproportionately on U.S. markets for their viability, it isunrealistic to assume Japan could improve its welfare by asserting itself more force-fully. Japan’s leadership still sees the country’s interests served better by supportingthan by challenging the United States’.
49 For a more detailed analysis of agricultural trade policy changes under externalpressure, see George (1984, 1990a, 1990b, 1993)
50 For example, Japan’s increases in American beef imports between 1978 and 1988 inlieu of liberalisation represented a country-specific concession. Australia’s share oftotal Japanese beef imports fell from 60 to 42 per cent between 1980 and 1989,compared to a rise in the US share from 22 to 52 per cent. Over this critical period, theUnited States moved from a marginal to a major supplier of beef to the Japanese market,largely as a result of bilaterally negotiated Japanese beef quota expansion agreements,the institution of pricing structures in Japan that favoured American beef, biases in theallocation of import quotas, the use of similar mechanisms in import quota administra-tion and the unrestricted competition of diaphragm beef with quota beef (diaphragmbeef was outside the quota system and was almost exclusively supplied by the UnitedStates). See Australian Meat and Livestock Corporation (1988). See also George(1984) and Australian Bureau of Agricultural and Resource Economics (1987).
51 There were both confirmed and denied reports that the Japanese government had alreadydone a deal with the United States on rice in October 1993, prior to the final round ofnegotiations at the GATT. Japanese newspapers in early October reported that Tokyoand Washington had reached a deal on opening Japan’s rice market to imports under asix-year arrangement giving limited access — which was true to the final deal that was
44
made public in December. According to press reports at the time, even though rice wasthe major sticking point in Japan’s accession to the final GATT agreement in December1993, Japan’s apparent stance in late 1993 was to give priority to negotiations with theUnited States in resolving the tariffication issue. Jiji Press, 18 October 1993.
52 The figures for the potential economic value of particular commodity marketliberalisations tended to change over time. A calculation in the late 1970s produced afigure of US$500 million if Japan liberalised citrus and beef products. (Sato and Curran1980). By the mid-1980s, calculations estimated a total of US$400 million for beef andUS$50 million for citrus if Japan liberalised these markets (Sorich 1986, p. 1). In theearly 1990s, Ito (1993, p. 399) pointed out that if ‘every Japanese suddenly consumedtwice as much beef and all the increase came from abroad, it would reduce Japan’s tradesurpluses by $2 billion’. As far as general figures are concerned, it was estimated thatif Japan yielded to all the American demands for removal of agricultural trade barriersin the mid-1980s, US sales to Japan would go up by an estimated US$1 billion, whichwas small relative to the US–Japan trade deficit of US$50 billion in 1985. See Sorich(1986, p. 1).
53 According to Yoshioka (1982, pp. 352–3), ‘American demands that Japan liberalise itsimport restrictions (including those on agricultural products) were made stronglywhenever Japan built up a considerable surplus in the two nations’ bilateral trade’.
54 One of the consistent Japanese responses to American pressure for market access hasbeen to offer concessions in areas where they can be more easily engineered in lieu ofthose in more difficult and sensitive sectors. See George (1991) for an analysis ofJapan’s ‘substitution’ response.
55 Reich and Endo (1983, p. 102) also noted that the ‘U.S. government … soughtagricultural concessions from Japan both as an end in itself and as a means to otherpolicy and political goals’.
56 Donnelly (1993, p. 337) commented that ‘the United States often makes symbols out ofindividual issues to characterize the entire Japanese market as closed’. Terada (1993,p. 15) also reported that a Japanese negotiator claimed that American negotiators oftenraised the example of commodities such as beef, oranges (and the construction industry)as a symbols of Japan’s closed markets. He concluded that a ‘conspicuous feature of theUS pressure on Japan is that the US tends to adopt a specific trade issue as a “symbol”of Japanese market exclusiveness. Such “symbolisation” of a certain trade issue hasoften been observed in previous US–Japan trade negotiations’ (Terada 1993, p. 15). Ata House Subcommittee on International Economic Policy and Trade in April 1978, itwas said that citrus and beef were ‘of more symbolic significance than of majorcommercial value to our nation as a whole’. See Sato and Curran (1980, p. 41). A UnitedStates Department of Agriculture (USDA) report stated that ‘The United States viewsJapan’s import quotas on beef and citrus products as symbolic of a broader problem of
45
Japanese protectionism’ . See Coyle (1986, p. iii). Elsewhere, Coyle states that ‘Beefand citrus have come to symbolize Japan’s protectionist agricultural policies’ (p. 1).
57 According to Sorich (1986, p. 6), the ‘adversarial tone and substance of farmnegotiations between the two countries [reflected the fact that] dissatisfied U.S. farminterests actually dominate the U.S. –Japan farm relationship because they press theircase with the vigor of the injured’.
58 Ufkes (1993, pp. 222–3) provides a good examination of the factors behind the US‘supply push’ in the area of agricultural exports to Japan from the 1970s onwards,covering both general economic factors and those specific to agriculture and particularagricultural sectors.
59 This applied in particular to the US beef and citrus sectors. According to a USDA report,it was ‘a matter of U.S. policy to promote exports of value-added agriculturalcommodities like beef and citrus products … which have a greater impact on employ-ment and income per dollar of experts than do bulk commodities. Furthermore, theJapanese market is extremely important to U.S. beef and citrus interests’. See Coyle(1986, pp. 5–6). In another USDA report, it was argued that if the Japanese beef andcitrus markets were liberalised, ‘they would enable the United States to enhance itsshare of the value-added component of its agricultural trade with Japan, thus expandingthe impact of these exports on the rest of the U.S. economy … [W]ith the removal ofimport quotas on beef, oranges, and citrus juice the United States could increase its netexports of agricultural products to Japan by $300–350 million … About 90 percent ofthe estimated increase would be in beef, which would expand U.S. demand for feed by$250–300 million’. See Coyle (1983, p. 27). This contradicts the argument in Paarlberg(1990), who notes that the US livestock industry was ‘not especially competitive inworld markets’ (p. 138), which did not augur well for an open market situation in whichAmerican suppliers would have to compete with Australian producers. According todocuments of the Office of the US Trade Representative (USTR), the potential dollarvalue for American rice exports to Japan in the event of market liberalisation wasestimated at over US$600 million in 1989. See National Trade Estimates Report:Foreign Trade Barriers (1989, p. 100), quoted in Mastanduno (1992, p. 736).American apple producers calculated that they lost US$150 million in lack of access tothe Japanese market in the period 1989–94.
60 The reasons for the agricultural export push from the United States in the 1970s and1980s have been extensively examined in the literature and will not be discussed here.See, for example, Reich and Endo (1983, pp. 6–13).
61 Asahi Shimbun, 6 June 1990. According to Paarlberg (1990, p. 139), the export-dependence of American rice producers made economic sense out of the rice-growers’campaign to enter the Japanese market, particularly in light of the fact that they producedJaponica rice.
46
62 For example, at the OECD meeting and Venice Summit in 1987, Japan signed adeclaration calling for cuts in farm support so that production would be more responsiveto the market. The Economist, 18 July 1987.
63 For example, the Tokyo Summit of May 1986, for the first time, devoted one paragraphin its declaration to agricultural trade problems, stating that ‘in all of our countries wehave to know that domestic subsidies and agricultural protection policies have causedinternational structural over-production. When oversupply exists, we have to reorgan-ise agricultural policies in the light of international demand and adjust agriculturalproduction structure’. See Hayashi (1986, pp. 123–4).
64 The United States attempted to make agriculture subject to major liberalisationnegotiations at the start of the Kennedy Round (1963–67) but was unsuccessful in itsbid to link the round as a whole to a positive outcome on the agricultural front.Liberalisation was undertaken by the Japanese government in the Kennedy Round butit affected mainly industrial products. The major purpose of the Tokyo Round was toreduce non-tariff barriers to free trade, including residual import quotas and agriculturewas on a list of several non-tariff-related agenda items at the round. According toFukushima (1992, p. 297), unlike previous GATT rounds, which had concentrated onreducing tariffs, the Tokyo Round was unique in negotiating the lowering and evenabolition of non-tariff barriers including import quota systems. The results for agricul-ture were mixed, however, with some tariff reductions and quota expansion but limitedliberalisation (see Tables 1 and 2 for details about liberalised items and quotaexpansions for beef, oranges and orange juice). At the UR, agriculture was the sixthnegotiating group of 15 designated for discussion. Saeki (1991, p. 18) reasons that whatmade the UR different from the previous rounds was that ‘comparatively systematicnegotiations were launched in a form which dealt with agricultural border measures,domestic agricultural policies and GATT agricultural trade rules as a compound issue’.According to Saeki, the key difference between the Uruguay and earlier rounds, was thatprevious rounds only covered tariffs and direct import restrictions in order to respect thesovereignty of each state over its domestic policies. The UR was therefore unprec-edented in its attempt to tackle the domestic policies that influenced international trade(pp. 2, 4).
65 Objectives of the UR in relation to agriculture were ‘to improve market access foragricultural products by reducing import barriers such as quotas and other non-tariffbarriers; improve the competitive environment by reducing the forms of internalagricultural support (both direct and indirect) which distort trade; and minimise theadverse effects of sanitary and phytosanitary regulations on international trade’. SeeAustralian Bureau of Agricultural and Resource Economics (1990, p. 5).
66 The ministerial declaration from Punta del Este that launched the UR, and quoted inRausser (1984, p. 12).
47
67 Fujitani (1991, p. 198) argues that, in retrospect, the most significant negotiations inJapan’s agricultural trade liberalisation process were bilateral Japan–US agriculturaltrade negotiations, the Tokyo Round, the US petition to the GATT on the 12 miscella-neous agricultural product categories in July 1986 and the GATT Uruguay Round.
68 According to Reich and Endo (1983, p. 4), beef and citrus ‘became the most provocativeissues in the Multilateral Trade Negotiations (MTN) for agriculture in 1977 and 1978’.According to Ufkes (1993, p. 223), the United States formally asked for an expansionof Japan’s beef imports within the framework of the Tokyo Round.
69 For a blow-by-blow description of the process leading to this agreement, see Sato andCurran (1980).
70 According to Ufkes (1993, p. 225), in early April 1988 the United States requested aGATT review of Japan’s beef import restrictions, but Japan opposed the request,resulting in its denial. The United States then made a second appeal for a GATT reviewthat was not blocked by Japan, and in May 1988 the GATT was given formal jurisdictionover the dispute.
71 These petitions were presented in September 1986 and September 1988. Their contentsare outlined in Table 4.
72 Yeutter’s press conference speech, 28 October 1988, p. 4.
73 The view of some officials in the State Department was that there was tremendous lossof political capital for the United States in putting Japanese farmers out of business andin pressuring Japan directly in such a politically and cultural sensitive area. They arguedthat the agricultural trading relationship with Japan consistently ran huge surpluses andthat pursuing Japan on rice could jeopardise more than the United States would gain.Author’s interviews with State Department officials, Washington, March 1993.
74 These were effectively US Trade Representative Clayton Yeutter’s words at his pressconference on 28 October, 1988, explaining why he had rejected the second petition ofthe Rice Millers’ Association. Press Conference Speech, p. 4.
75 As Oxley (1990, p. 5) also notes, ‘the success of international agreements dependsfundamentally on the extent to which the most powerful signatories to those agreementsare prepared to support them’.
76 This involved replacing quantitative barriers to agricultural trade, such as bans onimports or quotas, with tariffs. Tariffs, or taxes on imports, were seen as beingadvantageous because they provided ‘much greater transparency … with respect to thelevel of protection’. See Blackhurst, quoted in Greig (1987, p. 306).
77 According to the views expressed by officials of the State Department, they could notsee any reasonable logic in pursuing Japan on a politically sensitive issue that wasrelatively less important on the US bilateral agenda. The limited commercial value of
48
US rice exports to Japan contrasted with beef and oranges, where there was tremendousmarket potential, where Japan’s import restrictions were GATT illegal and where‘everyone was in favour of getting rid of a corrupt structure’. Author’s interviews withState Department officials, Washington, March 1993. This view of the State Depart-ment contradicts the reasoning in Paarlberg’s (1990) article, where he argued that riceproducers’ export dependence made pursuit of Japanese rice market opening a logicalstrategy.
78 One writer argued that rice created more friction between Japan and the United Statesthan any other issue at the UR. See Nagao (1991, p. 90).
79 These negotiations also covered specific tariff reduction commitments contained inindividual country schedules. For Japan, see United States Department of Agriculture(nd).
80 The rice talks were led by Joe O’Mara of the USDA, chief US negotiator for farm tradetalks in Geneva, and Shiwaku Jiro, the chief Ministry of Agriculture Forestry andFisheries (MAFF) negotiator for the Japanese side.
81 Putnam (1988, p. 455) cites the example of the German case where internationalpressure was welcomed ‘as providing a useful “tailwind” in German domestic politics’.This is very similar to the view of gaiatsu held by Japanese domestic reformers.
82 A press report commented that ‘To avoid isolation in the farm trade negotiations underthe General Agreement on Tariffs and Trade (GATT), the ministry [namely MAFF]wants to improve the food control system using the lever of foreign pressure’. JijiPress Newswire, 26 February 1990.
83 Interview with the former Vice-President of the RMA, Stephen Gabbert, Washington,March 1993.
84 Schoppa noted the ‘ability of the Americans … to alter the political game inside Japanto its advantage’ (1993, p. 356).
85 This is Putnam’s terminology. See Putnam (1988, p. 445).
86 Reuter Newswire (Far East), 21 August 1990.
87 See the Japan–America Wisemen’s Meeting, ‘Proposals to the Prime Minister of Japanand the President of the United States’, 1981, and the Japan–America AdvisoryCommittee, Committee Report ‘Progress in Cooperation: Issues and Possibilities inU.S.–Japan Relations’, 1984, referred to in Mishima (1986, p. 209).
88 Christopher gave a speech to the Japan Association of Corporate Executives, or JACE(Keizai Doyukai) which had called for the elimination of tariffs on products coming intoJapan. Japan News, 11 March 1994.
89 This applied particularly to former Prime Minister Kaifu during the SII talks and toformer Prime Minister Hosokawa on deregulation issues. Kaifu with the aid of the
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United States helped to produce ‘a greater consumer consciousness and awareness inJapan’. See George (1991, p. 19).
90 Market access for foreign rice, for example, has precipitated a partial liberalisation ofJapan’s domestic rice marketing system under the 1994 New Food Law.
91 This point is similar to Donnelly’s (1993, p. 342) comment about the linkages betweendomestic politics and international negotiation processes in US–Japan relations:‘Neither “state” is exclusively the sole agent involved in bargaining … the formationof transnational coalitions often blur even further any simple notion of two “sides”engaging in goal-seeking behaviour or the idea of two-level games exclusively playedin one country. In some cases it is not certain who is on which side, within and outsidethe government, and on both sides of the Pacific’.
50
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