Policy Interference in the Japanese Imports of the Primary Agricultural Products

Abstract

This study tests the feasibility of dynamic comparative advantage theory in Japan. Specifically, we use annual trade data of primary agricultural products of 1976-2015 to obtain the government interference in imports. We find that the Japanese net export ratios in this category are significantly lower than the degree that the actual comparative advantages determine. We conclude that Japan does not try to improve its comparative advantages by imposing restrictive trade policies on the imports. In other words, the theory of dynamic comparative advantages does not hold in Japan, at least for the Japanese imports of the primary agricultural products.