The political economy of agricultural trade liberalization in Northeast Asia: comparisons with the West and between Japan and Korea

Abstract

This paper contrasts agricultural protection of Japan and Korea with the West and identifies major differences between them. It characterizes agricultural protection of Japan and Korea (net heavy food importers) as “tariff-based and scarcity-sensitive” aimed at promoting survival and the West (net food exporters) as “subsidy-based and surplus-inducing” aimed at enhancing farm income. We then identify factors underlying the coevolution and divergence in the extent of agricultural trade liberalization between Japan and Korea since the launch of the Uruguay Round in 1986. Korea accepted deep cuts in agricultural tariffs in bilateral FTAs with the US and EU during the 2000s while Japan continued to protect farm interests by concluding low levels of FTAs with politically sensitive products excluded from tariff concessions. The two countries’ stances reversed since 2013 with Japan becoming proactive in pursuing high levels of FTAs with major agricultural exporting countries and Korea decelerating its opening of agricultural markets. To explain such divergences, this paper develops a political economy framework in which the incumbent political leadership would consider both national interests and sectoral (farm as import competing industries and business/manufacturing as exporting industries) special interests. Our analysis shows that President Roh (2002–2007)’s embracing of neoliberal paradigm in formulating foreign trade policies that would promote national interests underlies the unprecedented level of agricultural trade liberalization in Korea during the 2000s, while Prime Minister Shinzo Abe’s determination not to be outcompeted by the rising China and Korea’s ambitious FTA strategies underlies Japan’s proactive bilateral and mega-FTA drives since 2013.

Keywords:

• Political economy
• agricultural trade policy
• Japan
• Korea
• geopolitics
• FTAs

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 There are some studies examining agricultural protection in Japan (Honma & Hayami, 1986; Honma & Hayami, 2009). They contribute to understanding the linkages between the extent of protection and the stages of economic development. Yet, their studies shed little light about how agricultural protection of Japan differs from the West.

2 Koo (2010) describes the pre-1997 financial crisis political economy feature of the Korean economy as the ‘developmental mercantilism’ given the government’s heavy control of imports and export promotions, while using the term ‘developmental liberalism’ to denote that the government remains as a significant player guiding the liberalization process since the crisis.

3 The low level of agricultural trade liberalization under the WTO does not say that Japan and Korea were able to prevent the WTO Membership from achieving a high level of liberalization. Instead, it signifies that the political and other costs of opening domestic agricultural markets may have been unbearably high not only for Japan and Korea but also for many other WTO member countries, thereby failing to achieve a high level of agricultural trade liberalization.

Additional information

Notes on contributors

Wanki Moon

Wanki Moon is a professor of Agribusiness Economics at Southern Illinois University Carbondale, Illinois. His research focuses on agricultural economics, international political economy, and global governance of agricultural trade. His articles have appeared in journals including European Journal of Agricultural Economics, Land Economics, Ecological Economics, Land Use Policy, Food Policy, and Agricultural Economics.

Takumi Sakuyama

Takumi Sakuyama is a professor in the School of Agriculture at Meiji University. He worked for the Japanese Ministry of Agriculture, Forestry and Fisheries for 25 years as a trade negotiator, a diplomat and an economist. He earned a M.Sc. with distinction from the University of London, an M.A. from the University of Sussex and a Ph.D. from Aoyama Gakuin University.