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    Posted July 23, 2014 by
    EricBrickman

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    ECONOMIC SANCTIONS AND CONSEQUENCES FOR JAPAN

     
    Trade and economic relations between Russia and Japan are regulated (in accordance with the status of Russia as the Successor State) by the Soviet-Japanese trade agreement dated December 6, 1957, as well as by the annex to the contract, that determines the legal status of the Russian Trade Representation in Japan. The trade agreement provides for the mutual granting of most favored nation. Duration of the contract is automatically renewed.
    In the list of lists of priorities in the overall structure of Tokyo trade and economic relations with Russia first place remains for the fuel and energy complex. The share of supplies from Russia is 10 percent of Japan's gas and 7 percent - in the oil. Japanese corporations are actively involved in the projects "Sakhalin-1" and "Sakhalin-2". Development of cooperation with Russian partners is extremely important for Japan in terms of solving the problem of energy security of the country, which has become even more urgent after stopping all national NPPs. That's why Japan’s interest applies not only to existing, but also future projects, such as "Magadan-2" and "Magadan-3".
    Agriculture is important to Tokyo and from the view of food security - a problem, which is becoming increasingly relevant to Asian countries. New possibilities are connected with with the Russian export of wheat, soy, seafood and other food products in which Japan is interested in the first place.
    In case of cancellation of the procurement of relatively cheap Russian hydrocarbons, Japan will have to buy it at a higher price. It in turn will lead to a jump in the price of electricity in the country, that is already ready to take "a record height" on the background of stopping nuclear power plants. Such scenario, by some experts, can lead to very serious consequences for the whole of Japan's economic strategy. Russia can "not notice" the loss of partner in face of Japan. Nature, especially in the energy sector, will surely tolerate a vacuum in this case. Japanese companies will be replaced quickly enough with firms from China and South Korea, over which hangs the burden of "Western solidarity" and follow the instructions of duty in Washington. Besides Beijing and Seoul on the background of complex foreign policy relations with Tokyo will not miss a chance to beat the competition in the economic race. In this regard, government circles in Japan now very carefully weigh all the "pros" and "cons" of formulating its future course of economic cooperation with Russia.

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