Essentially, a direct income payment from the government could weaken, if not break, the relationship between farmers and the JA because farmers would be paid independent of production and would thus be less dependent on JA services. Finally, and perhaps most importantly, the DPJ could not overcome the opposition of the farmers, and the JA more broadly, to the DPJ’s position in support of the Trans-Pacific Partnership, aiming to reduce trade barriers. Farmers, protected by high tariff barriers, feared that an influx of low-priced agricultural goods would follow the adoption of the TPP. The JA stated an official position of opposition to the TPP and those who supported it, no matter their party affiliation. In the 2012 election, the JA published a list of the 177 candidates it endorsed, 162 of which were from the LDP. Of the 177 officially endorsed, 173 were elected . As these examples demonstrate, my framework for studying agricultural policy making and reform can provide help provide a fuller understanding of decision making in domains outside of Europe. Japanese farmers have repeatedly shown the ability to defend preferred policies, defeat unwanted reforms, and even silence those who advocate economic liberalization, whether a powerful political party or a major industry. As in Europe, it is difficult if not impossible to take support away from farmers or even to challenge their policy preferences.This third and final mini case tests the applicability of my argument to cases that involve agricultural interests but are not agricultural policy proper. Additionally, this mini case tests my argument beyond the European/EU context.
Decision making occurs at the supranational level, and, beginning with the 1986 Uruguay Round,25 liter plant pot agricultural interests are just one set of voices within a much broader set of voices. Essentially, in the case of world trade after 1986, agriculture cannot simply sort out its own situation in isolation, excluding all other interests. Because these negotiations are supranational, like CAP negotiations, farmer organizations and their influence are predominantly mediated through national representatives to the GATT meetings. Essentially, the task of this mini-case is to demonstrate that the major claims of my argument still hold under the conditions outlined above. When GATT was created in 1948, agriculture received special treatment. It was thought that agricultural interests were so powerful and agriculture such a touchy national subject that its inclusion would render any negotiations dead in the water. So unlike manufacturing sectors, agriculture was exempted from the prohibition on the use of both quantitative import restrictions and export subsidies. In addition, agriculture was left out of the first three rounds of multilateral trade talks in the GATT in order to assure successful negotiations. As a result of agriculture’s special treatment and its absence from GATT negotiations, domestic agricultural programs were allowed to develop unchecked. The resulting agricultural surpluses were one of the major factors that pushed agriculture to be fully included in GATT multilateral negotiations despite major concerns over the dilatory effects of powerful farming interests and the objections that would certainly be raised by negotiating parties in defense of their particular agricultural profile. The centerpiece of the GATT Uruguay Round negotiations was the section on agriculture. The GATT UR was launched in 1986 and was supposed to be concluded by 1990. Due to delays on the agricultural section of the negotiations, an agreement was not reached until 1993, almost doubling the length of the GATT UR. The declaration launching the Uruguay Round identified greater liberalization in agricultural trade as the fundamental goal of the round.
Particular attention was to be paid to domestic support, market access, and export subsidies . The specific goals for agriculture were to reduce import barriers, to order to improve market access, and to restrict the use of direct and indirect subsidies in order to improve the competitive environment. US Trade Representative Clayton Yeutter insisted on the inclusion of policies relating to domestic support over the strong objection of some EC member states, most notably France. In short, in the GATT UR, reformers wanted to remove protectionist trade barriers and dramatically cut, if not completely eliminate, subsidies for agriculture, including those designed to boost farmer incomes. In a major break from previous GATT negotiations, the UR was to be treated as a “single undertaking” . In other words, the round could not be concluded without an agreement on agriculture. By contrast, the Tokyo Round was described as “GATT à la carte” because contracting parties could decide which agreements they did and did not want to sign . This change was made in an effort to finally force an agreement on agriculture. In all previous rounds, agriculture was either excluded entirely or treated under special, separate rules. For France, which was reluctant to include agriculture in the UR negotiations, the condition was particularly important because it “represented the potential for offsetting gains in other sectors: to rebalance trade with Japan and to ensure the newly industrializing countries, particularly in Asia, met in full their obligations under the GATT” . In practice, the single undertaking condition permitted agriculture to cause extensive delays in the negotiations, repeatedly proving to be the issue that blocked everything. Negotiations at the Uruguay Round took place over seven years. Throughout the talks, the US and EC advanced radically different negotiating positions. An inability to reach an agreement on agriculture resulted in the collapse of the round, and the original deadline for an agreement, 1990, was missed. Talks were revived by GATT Director General Arthur Dunkel and ultimately concluded in 1993 with an agreement that was dramatically watered down from the initial GATT UR objectives and was ultimately quite favorable to farmers. In the end, farmer income payments, which GATT officials sought to eliminate or at least restrict, were entirely preserved and the dismantling of tariff barriers was delayed or restricted such that most farmers felt little to no effect from these changes.
The Uruguay Round negotiations were driven by the sharply divergent positions of the United States and the European Community, supported by the Cairns Group43 and Japan, respectively. The US saw government support as the root of trouble in farm trade while the EC blamed the market. Specifically, the US called for dramatic liberalization, primarily by reducing the protection and support afforded to European farmers under the CAP. The EC, however, argued that that the aim of negotiations should be to “progressively reduce support to the extent necessary to reestablish balanced markets and a more market oriented agricultural trading system” but not to phase out support and protection . The US plan was highly aggressive and market oriented. Dubbed the “Zero Option”, it called for the complete elimination of farmer programs, described as “all forms of support which distort trade” within ten years . Export subsidies, which were considered by US negotiators to be the most trade distorting, were to be reduced by 90% in five years. In addition, no commodity or support program would be exempt from reform. However, programs, such as decoupled payments, which were not tied to output and thus were arguably not trade distorting, would remain untouched. In launching the Zero Option, US officials believed that American farmers would accept the subsidy reductions because foreign farmers would be subjected to the same pains at the same time. US farmers, however,black plastic plant pots preferred to avoid rather than share pain, and feared that any GATT reform would impose costs upon them. GATT negotiations came on the heels of two major failed attempts by the Reagan administration, in 1981 and 1985, to get Congress to reduce the levels of support for US farmers. Reagan administration officials viewed the GATT negotiations as an opportunity to use international negotiations to achieve domestic reform. Farmers had defeated these retrenchment efforts at home, so the Reagan administration sought to attempt to retrench agriculture in the context of international trade, which could potentially undercut the power of the American farmers.The EC flatly rejected the US proposal calling the plan “unrealistic”. It was, at its core, a thinly veiled attack on the CAP, a policy with which the US was becoming increasingly frustrated. The EC countered with a more modest proposal where reductions in support levels would occur only after measures were adopted to stabilize world prices. In the first stage, the most seriously imbalanced markets, cereals, sugars, and dairy products, would be stabilized. In what is likely not a coincidence, these commodities were also those in which the EC had massive surpluses. In the second stage, commodity supports would be reduced gradually by up to 30% over a period of ten years, with reductions calculated using 1986 as the base year. Overall, compared to the US, the EC fundamentally sought to maintain the agricultural status quo. Japan’s position was largely defensive and was grounded in a desire to make as few concessions as possible in negotiations . Of fundamental importance was to prevent or delay tariffication to the extent possible, specifically for rice, which is a hallowed product in Japan. Indeed, Japanese negotiators were willing to permit imports and increased tariffication in all other agricultural commodities so long as rice remained exempt from tariffication and import rules.
Japan’s existing agricultural policy and support system allowed them to support their farmers through a system of high prices made possible by a system of tariffs and isolation from the international market . By resisting tariffication, or gaining exemptions for the most important sectors, namely rice, Japan could avoid the situation that the EU found itself in, where domestic policy had to be reformed to make a final agreement possible. Japan’s objectives were shaped primarily by the special position of rice producers and also by the overall high level of protection of agriculture. In addition to a desire to avoid a ban on agricultural import quotas, the Japanese position emphasized the importance of “non-economic” objectives of food farm policy, including “food security, rural employment, and environmental protection” . In regards to the two major policy positions, that of the US and the EC, the Japanese supported the EC and flatly rejected the US position as impractical . After observing the EC and Japanese negotiators’ vehement rejection of the Zero Option proposal, the US farm lobby, including numerous commodity groups, realized they could use this opposition to their own benefit. Knowing that the EC and Japan would never accept the Zero Option, US farm lobbies began to support the plan in hopes that it would deadlock the negotiations. If the negotiations remained at an impasse, then American farmers would also continue to benefit from the subsidies, tariff barriers, and general support programs that the “Zero Option” plan sought to eliminate. Many US farm lobbies were quite aggressive, insisting that “they could accept nothing less than the Zero Option”, that “half measures would not do— no agreement was better than a bad agreement” and that the Zero Option was “the only way to guarantee a level playing field against their subsidized foreign competitors” . The US farmers’ manipulation of the Zero Option extended into the GATT Mid-Term Review , which took place in 1988. US farm groups, led by the highly subsidized sugar and dairy sectors, successfully lobbied Secretary of Agriculture Richard Lyng to “force Yeutter to stick to the Zero Option in Montreal” resulting in a stalemate at the MTR . Yeutter had, in the months leading up to the Uruguay Round’s MTR, expressed a willingness to accept partial reforms. In order to best protect their policy preferences, however, the American farmers pressured the US government to hold the line on a policy they knew would never be accepted by Europe. Like their European counterparts, American farmers rely on the power of their sophisticated organizations to advance and defend their policy preferences.Negotiations also floundered because the EC and Japan were losing interest in reform. In the case of the EC, the need for agricultural policy reform to bring spending costs under control was achieved when the EC reached an agreement in 1988 on two measures that brought about temporary budget relief: a stabilizer for cereal subsidies and a 25% increase in Community revenue. In Japan, it was electoral politics, not reform, that dampened the desire to negotiate.