An international panel has ruled in favor of the United States in an unfair trade complaint against Japanese restrictions on imports of agricultural products, possibly setting a precedent for relaxing Japan's barriers to farm goods.
The decision of a panel formed under the international compact that governs world trade, the General Agreement on Tariffs and Trade (GATT), focused on 12 categories of processed foods -- including canned corned beef, dried frozen yogurt mix, canned pineapples, dried peas and beans and peanuts -- whose entry into Japan is either restricted by quotas or face an outright ban.
U.S. sales in Japan of those products amount to about $88 million a year, and administration experts were unclear how much more in sales would be gained if all the barriers were removed.
But administration trade officials believe the impact of the GATT panel's finding will go beyond the products involved in the complaint and could set a precedent against Japanese import bans and quotas on rice, beef and citrus products.
High subsidies for farm products and tight barriers against imports are increasingly being seen as critical targets in changing Japan from an export-driven economy to one that depends more on domestic sales.
Because of the subsidies and the import barriers, about one-third of all Japanese spending goes for food. Rice -- a staple of the diet -- costs about $1.50 a pound, about three times the retail price in Washington and 10 times the price on the world market. This reduces funds that Japanese consumers have available for other products, increasing the need for Japan to sell its goods overseas instead of at home, economists say.
The GATT panel's decision will not be released until next week, to give the two countries a chance to settle the dispute quietly. But it was leaked in Tokyo, where sources said Japan is unlikely to offer a settlement within that time. Instead, Japan is expected to try to reach an agreement with the United States before Nov. 30, when the finding will be presented at a meeting of all 95 GATT members, the sources said.
It is considered unlikely that Japan will remove entirely its barriers to imports of agricultural goods, since the farmers form an important political bloc within the ruling Liberal Democratic Party. But Reagan administration officials are expected to take a hard line in any talks with the Japanese.
Japan can react to the GATT panel finding in three ways, trade experts said. It can block the decision, as the European Community has done in politically sensitive cases such as one on a U.S. complaint involving pasta subsidies; it can relax its restriction, or it can offer compensation to the United States, as it did when another GATT panel ruled against it in a politically sensitive case involving leather goods.
In other trade action yesterday involving Japan, President Reagan said he was suspending $84.4 million in sanctions he imposed in April, when the Japanese were found to be violating a semiconductor trade agreement. He acted after the Commerce Department found that Japan had stopped selling semiconductors in other countries at less than their fair market value.
Previously, the president suspended $51.6 million in sanctions because the Japanese were making progress in stopping the dumping.
But he left in place another $164 million in sanctions until Japan complies with another part of the agreement that calls for it to open its market to U.S. semiconductors. U.S. officials said Japan agreed to steadily double its purchases when the agreement was signed 13 months ago. Instead, the U.S. share of the Japanese market has fallen from about 10 percent to 8 percent.