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Trade War Said Unlikely
Although China has vowed to avenge any losses incurred from Japan's temporary restrictions on some farm imports, the dispute is not expected to elevate into a trade war, according to trade analysts.
Yuzo Nakashita, general manager of the Beijing and Shanghai offices of the Japan Association for the Promotion of International Trade, said he believed the Japanese Government would take care to ensure that the restrictive measures do not directly affect Japanese consumers or Sino-Japan trade relations.
He added Chinese officials' understood that Japan's emergency restrictions on imports of onions, mushrooms and tatami rushes were politically motivated and could soon come to an end, thus preventing a trade war between China and Japan.
The Japanese Government decided to levy high customs duties from April 23 to November 8 on imports of onions, mushrooms and tatami rushes that exceed certain amounts specified by the government.
Nakashita said he also believed the measure was "totally politically motivated" as the Japanese Government tries to win farmers' support in the coming July senator election.
"It's doubtful whether imports have driven down market prices and damaged domestic industries," Nakashita said in an interview.
Japanese statistics show imports made up 8 per cent of Japan's onion sales, 39 per cent of mushroom sales and 59 per cent of tatami rushes sales last year.
Nakashita said he was optimistic that the government would withdraw its restrictive measures after the July election, and as such that they would not have too large an impact.
Long Guoqiang, a senior researcher with the Development Research Centre, a think tank of the State Council, said Japanese farmers are having a hard time because Japan's agriculture is very uncompetitive, not because of imports.
But Japanese farmers are well organized and politically influential and successfully forced the Japanese Government to adopt protective measures.
Long said the 10-year economic slack has also contributed to the Japanese Government's tendency towards trade protectionism.
China, a major supplier of Japan's imports of onions, mushrooms and tatami rushes, has vowed to retaliate against the measures, despite the fact that these products take up only a very small portion of the US$85 billion Sino-Japan trade.
Officials with the Ministry of Foreign Trade and Economic Co-operation said that when adopting the temporary restrictions, the Japanese Government did not compensate China in other fields as is required by World Trade Organization (WTO) rules.
Not being a member, China can not take the issue to the WTO for judgment and has to rely on negotiations with the Japanese Government.
Long said in that case China must retaliate, for there are dangers that the restrictive measure might spread to other products such as textiles and farm produces.
Japanese media reported that the Japanese Government has started investigations into towel imports and that chopstick producers are also applying for protective measures against imports, which mainly come from China.
"China must take measures to make Japan realize that its protectionist behaviour could backfire," said Long.
Long suggested that retaliation be taken on finished products such as televisions, cameras and automobiles instead of intermediary products, which might potentially be a real danger to Chinese companies.
Source: China Daily
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