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

Abstract

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.