Nikkei Asian Review | 19 October 2019
Japan’s farms face up to $1bn hit from US trade deal
by RINTARO TOBITA
TOKYO — Japanese agricultural production will decline 60 billion to 110 billion yen ($552 million to $1.01 billion) under the bilateral trade deal with the U.S., the government told a ruling party assembly Friday.
The estimates cover agricultural, forestry and marine products. Beef takes the biggest hit from expanded American imports, with production declining as much as 47.4 billion yen, followed by dairy products at up to 24.6 billion yen and pork by as much as 21.7 billion yen. The two sides aim to have the deal take effect in January.
The impact is set to be about 10 billion yen lighter than it would have been under tariff reductions agreed to by Washington and Tokyo before the U.S. quit the Trans-Pacific Partnership in 2017. The softer hit stems from the exclusion of certain items, such as Japanese marine products, as targets for reduced tariffs.
Government and ruling party officials aim to put together support measures for domestic farmers within the year. "Determining how to address this in supplementary budgets is priority No. 1," Liberal Democratic Party Diet affairs chief Hiroshi Moriyama stressed at Friday’s meeting.
Meanwhile, the trade deal is estimated to boost Japan’s real gross domestic product by 0.8% — or roughly 4 trillion yen, based on fiscal 2018 GDP figures — and create about 280,000 jobs.
The estimates assume that the U.S. repeals its 2.5% tariff on Japanese automobiles. Tokyo has said the levy will be lifted following further negotiations, but Washington has been wary of yielding on the issue. Should the tariff remain in place, the economic lift to Japan would be far smaller.
Japan’s own lowering of duties will ultimately cut its tariff income by 103 billion yen, according to the estimates. Tariffs paid on Japanese exports will be 212.8 billion yen less under the deal.