JAPAN MAY OFFER PLAN FOR REMOVING QUOTAS

JAPAN MAY OFFER PLAN FOR REMOVING QUOTAS

Takashi Sato, Japan's minister of agriculture, forestry and fisheries, will propose a timetable for the removal of quotas on beef and citrus imports from the United States during talks in Washington this week, Japanese government sources disclosed at weekend.

The timetable, which will be placed before U.S. Trade Representative Clayton Yeutter, calls for removal of beef quotas within three years. Quotas on orange imports will be phased out in five years.Mr. Sato is expected to leave Japan today and remain in the United States through May 6.

On Monday, however, Kyodo Wire Service quoted party officials as saying the ruling Liberal Democratic Party approved Mr. Sato's U.S. visit on condition he adheres to a party resolution not to liberalize imports of beef, oranges and orange juice.

The news report also quoted party officials as saying government and LDP leaders would meet this morning before Mr. Sato's departure to discuss whether he should be given a free hand in reaching a political settlement of the issue.

It said all major opposition parties agreed to hold a major rally in Parliament 3 today to oppose the liberalization of farm trade.

The sources, who spoke at weekend on condition of anonymity, said the proposal will be a last-ditch effort to reach an arrangement with the United States before the end of this month. If Mr. Yeutter accepts the offer, it was stressed, it will effectively prevent the Geneva-based General Agreement on Tariffs and Trade from taking up the controversial issue.

The United States earlier filed a complaint with GATT, the international body that governs trade throughout much of the world, concerning Japanese use of quota systems to restrict large-scale imports of beef and citrus fruit. Washington has been pressing for complete liberalization of these imports.

However, the sources pointed out that Japan's offer to completely liberalize beef imports in only three years instead of the previously proposed five years will be conditional on Washington's acceptance of Japanese imposition of a relatively low surcharge following removal of the quotas.

U.S. negotiators have expressed strong opposition to the such import surcharges on the grounds that they violate the rules of GATT.

The sources, which admit the U.S. argument has some validity, report it is possible that Minister Sato may be instructed to avoid referring to the likelihood of surcharges on beef imports while seeking a compromise based on a Japanese promise not to introduce any measures that would effectively limit the inflow of beef. This would leave open to the Japanese the possibility of developing some sort of system that would replace surcharges and yet provide the same production for domestic producers of beef.

The sources went on to say that Japan would like to delay the liberalization of orange and other citrus fruit imports for five years in view of the difficulties in raising duties and problems posed by the introduction of surcharges under GATT.

In the meantime, it is anticipated that, if Mr. Yeutter rejects the new Japanese proposals, Mr. Sato may return to the offer to expand beef import quotas by up to 25,000 tons yearly and increase orange imports by 11,000 tons annually. These are the same provisions included in the bilateral arrangement that expired at the end of March.

In the case of orange juice imports, it is likely that Japan will suggest increasing the annual import quota to 10,000 tons this fiscal year, a term ending next March. The volume under last fiscal year's quota was only 8,500 tons.

Presumably, the quotas would be expanded each year thereafter.

Japan's agriculture minister told the press his primary objective is to settle the dispute through bilateral talks in Washington at the earliest possible date. In any case, he added, the final decision is up to him now.