The inport tariff rate for walnuts in Japan is 10%, which is significantly higher than for other nuts imported in Japan. This report examines the question of whether walnut import liberalization is benefical or harmful to Japan. The answer is walnut import liberalization benefits Japan. A sumulation model is developed which considers the competition between the US and China in the Japanese shelled walnut, shelled sweet almond, and pistachio markets. Tariff elimination of walnuts imports to Japan would heve increased U.S. exports by 4.7% and generate a gain of 397 million yen for Japanese users in 2002. There are virtually no nogative effects on Japanese walnut growers because there are only a few farmers specialized in walnut production and specialized farmers have their own niche markets completely separated from inports Our results also reveal that the promotion money collected from U.S. walnut growers is effective in increasing U.S. exports to Japan. Specifically, we estimate the incremental gains to U.S. walnut growers to be over three tomes higher than the incermantal promotion costs.
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