The causes of protection in the Japanese beef industry

Abstract

Recently, Japan's markets have received considerable attention in the United States concerning their degree of protection. This study analyzes the degree and underlying causes of protection in the Japanese beef industry from 1963-1983. The Japanese beef industry was chosen due to its high trade barrier visibility and its importance in United States-Japan trade negotiations. Effective protection rates are applied as a measure of protection. Five economic regulation models are developed as possible explanations for the level of protection. An empirical analysis is conducted to determined which model best explains actual levels of protection. Protection in the Japanese beef industry appears to be directly related to the share of farm population and inversely related to farm income levels. This result implies that current levels of protection are likely to decrease if certain demographic trends in Japan, e.g., declining farm population and declining farm income, continue.