As always, cross-strait relations will be a hot topic in the run-up to next year’s presidential elections.
With intensifying cross-strait exchanges in recent years, the Chinese government has made several signs of good will toward Taiwan when it comes to buying the nation’s agricultural and fishery products, dealing with import taxes and the extent of controls on such products. This has caused agricultural and fishery trade to increase. Last year, Taiwanese exports to China in the sector reached almost US$1 billion, once again surpassing imports from China, which totaled US$960 billion.
The only problem is that not many of the benefits, such as from tax exemptions and fast-track customs clearance, are reaching farmers. Top Chinese authorities have been paying attention to the reason for this failure, and a campaign to deconstruct the relationship between vested interests in government and business circles in Taiwan is pointing directly to the problem.
Using the “green channel” system set up for investments in western, central and northeastern China as an example, the fact that agricultural products easily lose their freshness and therefore are not suitable for storage has pushed the initiation of export services. Therefore, provided that the safety of agricultural products can be guaranteed, a green channel system could be used to improve and integrate the supply chain for agricultural products, speed up the passage of produce through customs and simplify its complex inspection process.
If this happens, it would not only guarantee the freshness and quality of the produce and increase the rate of market acceptance, it would also boost e-commerce promotions of agricultural services. Data from AliResearch, the research arm of Alibaba Group, showed that in 2012, Alibaba’s trade in agricultural and fishery products was worth 19.86 billion yuan (US$3.172 billion). Within this segment, fresh fruit and seafood were growing the fastest, and it is estimated that the traded value for last year will reach 100 billion yuan.
The future looks good. If the green channel concept could be implemented across the board, that would indeed be helpful to positioning and selling domestic fresh produce on the Chinese market.
The main advantage of Taiwanese agriculture lies in the superiority and safety of its fresh produce. Due to inspection and quarantine issues, fresh agricultural and fishery produce from either side of the Taiwan Strait can not be sold online.
Thus, if permission could be given by authorities on both sides of the Taiwan Strait to issue product safety certification, fresh produce could be traded through a green channel as well as on the Internet. That would offer a huge business opportunity and would of course attract many corporations — including Ting Hsin International Group (頂新國際集團) — hoping that they would be able to rely on the ties between government and business circles to obtain a monopoly on cross-strait agricultural and fishery trade.
If there is no control mechanism or means to distribute benefits to Taiwanese farmers, the government should actively encourage business leaders with social interests — that do not conflict with the interests of society and farmers — to invest in economic activities in the sector to set cross-strait agricultural trade on the path to more normalized development.
Based on the principle of equality and reciprocity in international trade, Chinese agricultural products would also be able to enter Taiwan following the green channel process.
The problem is that Taiwan and China do not have consistent standards for pesticides, residue, inspection methods and equipment, and there are also different pests and diseases in each nation.
There are substantial discrepancies that must be addressed when it comes to quarantine requirements, and hygiene and safety inspections.
Although Taiwan has encountered quite a few problems when it comes to food safety certification, official Chinese safety certification is fraught with problems, an example of which was a shipment of crabs that was found upon arrival in Taiwan to contain traces of the banned substance chloramphenicol.
This makes it clear that there would still be substantial risk involved if Taiwan were to agree to apply the green channel process to imports of agricultural and fishery products with only Chinese government certification. It would be better to only allow the use of the green channel in one direction to begin with.
While it is true that cross-strait agricultural trade offers great business opportunities, the question is how to avoid monopolization by big corporations and instead make agricultural and fishery organizations jointly push for the green channel process to be implemented and increase the benefits for farmers, while using cross-strait talks to reduce the differences in safety and inspection standards.
To answer these questions, Taiwan must first build a domestic consensus and then work to implement it.
To avoid accusations of “black box” decisions — as were made in connection to the cross-strait service trade agreement among others — which will lead to a lose-lose situation, the decisions should not be made by the government behind closed doors.
Du Yu is chief executive officer of the Chen-Li Task Force for Agricultural Reform.
Translated by Perry Svensson
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