Saturday, December 10, 2005
Business » World Economy
South Korea and Japan dig in to defend farmers
Agence France-Presse
Seoul, December 9, 2005
South Korea and Japan rarely see eye to eye these days but their interests coincide on one sensitive area -- protecting their farmers from foreign competition.
Seoul and Tokyo will be speaking with one voice on agricqlture at World Trade Organisation (WTO) talks in Hong Kong from December 13-18.
>From an economic standpoint, their defence of agriculture appears to makes
little sense. As major trading nations both South Korea and Japan have a big
stake in the WTO's free trade agenda.
In South Korea, for example, merchandise trade accounts for nearly 70 per cent of gross domestic product while farmers, only five percent of the population, bring in not much more than three percent.
The South Korean government is pushing an aggressive line at the WTO for the reduction of trade barriers to its exports, making common cause with the United States and other advanced economies.
But when it comes to farmers, Seoul digs its feet in. The reason is partly political, and partly cultural in this rapidly industrialised country where average citizens still identify with their agricultural roots. Also, the farmers are backed by strong lobby groups and have powerful friends in the National Assembly.
"Basically if the Korean government is asked to choose between agriculture and manufacturing, they would select agriculture, ignoring the manufacturing sector, because politically, agriculture is quite powerful," said Kang Moon-Sung, head of the WTO research team at the Korea Institute for International Economic Policy.
Japan is also expected to take a hard line on agriculture at the Hong Kong talks.
"We will give way if we have to do so, but we should protect what we have to protect," a senior Japanese official said recently.
The indications are that Japan and South Korea will make common cause in opposition to efforts to apply a cap on farm tariffs.
South Korea imposes tariffs of more than 500 percent on a range of foreign imports. Japan's tariffs are also massive and it also subsidises its farmers, who make up fewer than five percent of the population and contribute less than 1.5 percent to GDP.
Proposals on the table for the WTO talks include a cap of 100 per cent for developed nations and 150 per cent for developing nations from the EU and a proposal for a 75 per cent for the developed world and an as yet unspecified figure from the United States.
"If those kind of figures are agreed, Korea is in trouble," said Kang.
Japan is strongly opposed to tariff caps and at last month's Asia Pacific Economic Cooperation (APEC) forum in the South Korean port city of Busan maintained that its position would not soften in Hong Kong.
Japan imposes import tariffs of above 75 per cent on a range of goods and its tariff on rice imports currently stands at 778 per cent.
"Setting a tariff cap will destroy the Japanese agricultural sector and will shatter efforts of promoting agriculture. It is not at all acceptable," Mineichi Iwanaga, Japan's Minister of Agriculture, Forestry and Fisheries, said in October.
Japan and South Korea both belong to the Group of 10 food importing countries who reject liberalization of the farming sector.
Lack of agreement on agriculture is the key stumbling block to the success of the WTO is meeting in Hong Kong, whose goal is to agree the outlines of an international accord to cap the Doha Round of negotiations launched in 2001.
© HT Media Ltd. 2005. -