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Japan eyes scrapping sake, wine tariffs
Publication Date : 15-10-2013
The Japanese government and ruling parties have started to consider scrapping tariffs on imported wine, an idea that would, in turn, call on other negotiators in the ongoing Trans-Pacific Partnership free trade talks to eliminate tariffs on sake, government sources said.
The move suggests that the government and ruling parties believe the mutual removal of tariffs would greatly benefit domestic consumers while also increasing sake exports from Japan, according to the sources.
The idea to eliminate tariffs on wine was a Japanese response to a request made by Australia and New Zealand, the sources said. The government and the ruling parties will study measures to support domestic wine producers, who are bound to be dealt a blow if wine tariffs are abolished, as it would result in increased imports.
Meanwhile, Japan will aim to increase its sake exports by requesting the other negotiators in the TPP talks to remove levies on sake, according to the sources.
Currently, imported beer and whiskey are tariff-free, but Japan levies a tariff of 15 per cent of the price of imported wines, or 125 yen (US$1.27) per litre.
In the TPP talks in which 12 countries, including Japan and the United States, are taking part, the negotiators are proceeding with a goal of setting the liberalisation rate—the percentage of trade goods for which tariffs could be removed—at 95 per cent or more.
The government and ruling parties have been working on a list of items from which tariffs could be eliminated while protecting 586 items in the five key categories, including rice and wheat.
Although wine is not among the five key categories, the government initially planned to maintain tariffs on it.
According to the Development Bank of Japan, domestic consumption of sake dropped about 40 per cent to 589,000 kilolitres in fiscal 2010 from 992,000 kilolitres in fiscal 2000.
The fall is partly due to the declining population of young people who opt for sake. Under such circumstances, the sake brewing industry has voiced concerns over the domestic situation, requesting the government to push on tariff elimination on sake in the TPP talks to increase its exports.
The government and ruling parties believe Japan’s proposal is highly feasible and will be easily accepted by the other negotiators, according to the sources.
Under the economic partnership agreement between Japan and Chile, which took effect in 2007, Chile immediately eliminated tariffs on sake in exchange for Japan’s agreement to gradually remove levies on Chilean wine over the course of 12 years. As a result, exports of sake to Chile have since increased.
Good news for consumers
The TPP negotiators include such countries as Australia, New Zealand and the United States, which are known for wine production.
If tariffs are completely eliminated from their products, a bottle of wine with a price tag of 6,000 yen ($61) will sell for about 5,200 yen ($53) after the 15 per cent tariff is removed.
Similarly, if tariffs on exported sake are removed in the other countries, it will be good news for sake lovers abroad and Japanese expatriates.
Due to the Japanese cuisine boom, the number of Japanese restaurants abroad has been increasing.
Exports of sake also doubled to about 14,000 kilolitres in 2012 from about 7,500 kilolitres in 2002.
However, this figure was still well below exports of beer, the leading exported alcohol at about 38,000 kilolitres.
If tariffs are eliminated, sake exports are expected to increase.