TOKYO -- An official admission that importers and wholesalers may have been circumventing a government program designed to protect domestic farmers by controlling prices for imported rice could have a negative impact on upcoming Diet discussions regarding the Trans-Pacific Partnership trade deal.
Under the so-called SBS, or simultaneous buy and sell, system used for a portion of Japan's rice imports, an importer and a wholesaler pair up and put in their bids at once. The importer names the price at which it is willing to sell foreign rice to the government, and the wholesaler specifies the price it would pay to buy the rice. Prices are artificially inflated to prevent cheap foreign rice from impacting domestic prices. The auction system is allowed under the Uruguay round of multilateral trade talks, which ended in 1993.
