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Abstract

In Japan, it is widely believed that domestic agricultural products have higher quality because they have a higher level of safety, both objectively and subjectively, than imported products. However, no research examines whether safety attributes can establish the facts regarding the quality of domestic products. Thus, this article assesses the relationship between quality competitiveness and safety in a bilateral trade framework under the WTO/SPS agreement. The result of theoretical analysis indicates that when an importing country changes its safety regulations based on scientific evidence, it is necessary to ensure the same level of subjective safety between imported and domestic products in order to maximize its economic welfare. In fact, the tendency of differences in subjective safety levels among countries to decrease can be confirmed by experiences accumulated in U.S.-Japan bilateral issues raised over beef BSE (Bovine Spongiform Encephalopathy). This implies that safety attributes will not be critical factors in the maintenance of quality competitiveness in Japan's agriculture in the future.

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