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Japan's dairy industry is under heavy governmental regulation. This has serious consequences; for instance, controls on the imports of butter leads to periodic butter shortages. The collection of raw milk from farmers is monopolized by agricultural cooperatives in the region, which blend the raw milk from many farmers and sell it to dairy processing firms. Therefore, there is no opportunity for farmers to save money, increase quality and reap the benefits of a higher quality product. Regarding pork, Japan's tariffs are highly irregular. Japan imposes a specific tariff of ¥482 per kilogram on inexpensive pork parts imported at a CIF price less than ¥64.53 per kg. For imported pork at the CIF import price, which is between ¥64.53 and ¥524 per kg, Japan uses a "gate price system" in which the tariff equals the difference between the benchmark price of ¥546.53 and the CIF import price. Imported pork products that are more expensive than the ¥524 per kg (expensive pork parts) are subject to a conventional ad valorem tariff of 4.3%. This system maintains a domestic price of at least ¥524/kg regardless of quality. It also produces a huge incentive to lie about the true import price. Another incentive is to mix expensive and cheap pork parts to reduce the average import price to ¥524 per kg in order to minimize tariffs to be paid. This system discourages Japanese farmers from producing high quality pork, since expensive imports may be sold cheaper as part of the mixed pork shipment. Agricultural reform should be fundamental, not cosmetic, since the whole system needs to be overhauled. The realization of "Strengthening Agriculture" through Abenomics depends on the success or failure of these reforms.

The story of agricultural policy in Northeast Asia over the past 50 years illustrates the dramatic changes that can occur in distortions to agricultural incentives faced by producers and consumers at different stages of economic development. In this study of Japan, the Republic of Korea (the southern part of the peninsula, hereafter referred to as Korea) and the island of Taiwan, China (hereafter referred to as Taiwan), the authors estimate the degree of distortions for key agricultural products as well as for the agricultural sector as a whole over a period when these economies transitioned from low- or middle- to high-income status the beginning of the so-called East Asian economic miracle of dramatic industrial development. The three economies in terms of the nature of their economies, including their resource endowments that determined the course of their modern economic growth and development. The evolution of agricultural policies in the three economies is then reviewed before discussing how to measure distortions to agricultural incentives using the methodology from Anderson et al. (2008), the focus of which is on nominal and relative rates of assistance. Implications of empirical findings for policy reforms in the three economies are discussed in the final section, where the authors also identify lessons for later-developing economies experiencing similar structural transformations in the course of their economic growth. Statistical observations are found to be consistent with the hypothesis that the success of rapid industrialization that advanced these economies to the middle-income stage resulted in declines in agriculture's comparative advantage associated with the growing income disparity between farmers and employees in non-agricultural sectors.

Cover -- Title -- Copyright -- Contents -- List of Illustrations -- Preface and Acknowledgements -- Notes on Contributors -- List of Abbreviations -- 1 Understanding Japanese Trade Policy: A Political Economy Perspective -- 2 Postwar Japanese Trade Policy: A Shift from Multilateral GATT/WTO to Bilateral/Regional FTA Regimes -- 3 The Political Economy of Japanese Agricultural Trade Negotiations -- 4 The TPP and Agricultural Reform in Japan -- 5 To TPP or Not TPP: Interest Groups and Trade Policy -- 6 The Impact of Trade Policy on Japanese Trade and Investment -- 7 International Production Networks and Economic Diplomacy in Japan -- 8 Locating Japanese Trade Policy in an Evolving Regional Context -- Index.