Japanese tariff on imported rice - Research Paper Example

Japanese tariff on imported rice Japanese Tariff on imported Rice The Japan rice sector has been influenced significantly by the government policy. Japan has a very long history in claiming to have self sufficiency stable supply of rice. It has been receiving pressure from trading partners, but they have maintained a rigid competitive advantage thus opposing imports through various trade policies. In 1985, Japan recorded barely .2 percent of total imports from US. In fact, Japanese has virtually closed all the rice imports (Bergsten, Fred, Itō, & Noland, 2001).

Japanese protectionist began with very strict limitations on the imports after World War II. These policies were modified sequentially thereafter until early 1980s when, as a result of pressure from Trading partners such as US made them open up rice borders. For instance, California rice producers in 1986 filed a petition to the government of United States under section 301 of the constitution that the policies of Japan were detrimental to the industry. During this time, Japan was imposing a subsidy of up to $2,200 per metric ton to domestic producers in Japan.

As a result, the subsidies were about 10 times the World prices (Bergsten, Fred, Itō, & Noland, 2001).Instruments of Trade Policy: Japanese Tariffs on Imported RiceA tariff is a levied tax on the imports that raise effectively the cost of the goods imported in relation to the domestic products. Some specific tariffs are imposed as a charge that is fixed for very unit of imported good. In tariffs, there are entities that lose and those that gains. In more general terms, the state in most cases increases significantly since tariffs increases the revenue of the state.

In addition, domestic producers gain since the tariff offers them protection against external competitors by cost increase of the foreign goods imported. As a result, consumer loses since they must pay extra for the imports. Thus, tariffs are anti-consumer and pro-producer, and they reduce the global efficiency of the economy (Bergsten, Fred, Itō, & Noland, 2001).As part of the policy introduced by the government, imports on rice have been banned by the government in Japan except the processed forms.

In the same regard, disproportionate governing authority wielded by rice farmer’s production of rice has been subsidized. Trade friction between US and Japan has worsened. Tokyo logical basis on imposing such policies is to attain self-sufficiency in the production for food security reasons. In the same vein, farm groups domestically have maintained that cultivation of rice is part of their cultural diversity. Hayami (1988) argued that consumers of rice in Japan were to very high prices of rice since their expenditure on food as a total expenditure ratio has declined as their income rises.

Surprisingly, the consumers have not been supporting actively the ban so as to lower the cost of rice. More specifically, most consumers believe that the international rice does not taste better than the national rice (Bergsten, Fred, Itō, & Noland, 2001).ConclusionRice production in Japan is a major activity in agricultural production. There have been challenges such as imposing rice on imports. As a result, the government has greatly benefited by collection of revenues. Conversely, the consumers are affected negatively since the more the tariffs means that the consumers will dig deeper into their pockets.

Research has shown that most consumers in Japan prefer high quality rice. The overall purpose is that the state needs to protect the consumers and producers. In conclusion, Japan is one of the greatest rice producers in the world yet it has a comparative setback. The producers of lower cost such as Burma are supposed to be producing in bulk. Japan thus needs to open up its borders for trade since at the long run; the move is predicted to increase their national welfare and those of partnering countries.

As a result, most consumers will enjoy the lower prices and save the extra money to build other sectors of the economy. Nevertheless, the government seems to lie on the wishes of powerful interested groups of farmers and thus stagnating liberalization (Bergsten, Fred, Itō, & Noland, 2001).ReferencesBergsten, Fred, C., Itō, T., & Noland, M. (2001). . No More Bashing: Building a New Japan-United States Economic Relationship. Washington, DC: : Institute for International Economics .