Business & Economy

Japan to withdraw Russia’s favored trade status

Tokyo, Mar 16 (EFE).- Tokyo is to revoke Russia’s most-favored nation trade status as part of sanctions against Moscow for its invasion of Ukraine, the Japanese government announced on Wednesday.

In a press conference, Chief Cabinet Secretary Hirokazu Matsuno confirmed the decision in line with other Group of Seven members, and said Tokyo is prepared to take further action on products imported from Russia.

The government’s top spokesman added that Japan will take appropriate measures in this context, without specifying when it will start the process to strip Russia of its status, for which it will be necessary to pass a legislative amendment in parliament.

The “most-favored nation” status is given to an international trade partner to ensure non-discriminatory trade between all partner countries of the World Trade Organization (WTO).

Obtaining this status means that if a country is granted a special advantage, such as a tariff reduction on certain products, the same must be done with the rest of the members, with exceptions.

Russia joined the WTO in 2012 and, as one of its 164 members, Japan had been applying the same tariff rates to Russian imports to the territory as to other participating states.

The Japanese decision to leave it without preferential status would mainly affect imports of products such as fish and shellfish, according to local media.

Japanese imports of this type of product from Russia amounted to 138.1 billion yen (about $1.1 billion) in 2021, around 8.6 percent of the total, the third highest percentage after China (18.1 percent) and Chile (8.9 percent).

The total value of imports from Russia to Japan amounted to 1.54 trillion yen last year.

The rates on liquefied natural gas (LNG) and coal, Russia’s main imports to Japan, were zero even before the preferential treatment, and for the time being the government will not modify this due to its energy dependency and the participation of Japanese companies in the energy sector.

Japan’s energy self-sufficiency is currently around 11 percent and its supply is highly dependent on external sources.

Despite the fact that only 3.6 percent of Japanese imports of crude oil and 8.8 percent of those of LNG came from Russia in 2021, Japanese companies have strong links with and interests in energy projects of the neighboring country, especially on the island of Sakhalin. EFE


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