The 12 Trans-Pacific Partnership (TPP) nations have finally reached a consensus on a modern regional trade agreement including full liberalization and deregulation.
In the end, the Japanese made concessions on agricultural products: rice, wheat and other crops, as well as tariffs and quotas for the trade of beef, pork, dairy and other animal products.
At first, the concessions seem to be aiming at gaining benefits for the export of auto parts and other industrial products, but the fact is that Japan has acted very cleverly and should be a big winner in this deal.
It might have fallen under the radar that Japan, Singapore, Malaysia, Australia, New Zealand, Vietnam and Brunei are all part of both the TPP and the Regional Comprehensive Economic Partnership (RCEP). The TPP and RCEP not only offer Japan an Asian factory, but also China’s huge domestic market.
Under Japan’s global food value chain strategy, Singapore became the hub for Japan’s food exports, and Kuala Lumpur became the manufacturing and export hub for halal food produced in Japan.
This has made inroads to achieving Japan’s 2020 goal of a food export market of ¥680 trillion (US$5.6 trillion), of which ¥65 trillion would be halal food. The benefits created by the TPP far outweigh the agricultural concessions made by Japan.
In 2013, Japanese Prime Minister Shinzo Abe said that agricultural reform was needed to change the industry’s stance from defensive to proactive. He stressed that exports of the nation’s agricultural, forestry, and aquatic products needed to increase from ¥4.5 billion in 2012 to ¥1 trillion in 2020. His strategy aimed at branding such products, increasing the budget for public agriculture projects and rewarding the transition from rice cultivation to using rice as animal feed to increase Japan’s levels of self-sufficiency. Still, the most impressive part of his policy is the global food value chain strategy.
The Japanese government has established a public-private partnership committee to fully utilize Japan’s advantages in the food processing industry, and to use the export of smart services and foreign capital to create additional value by transforming its trade partners from production bases to consumers.
This would be done by providing farms with plant varieties resistant to droughts and cold weather; information and communication technologies, and plant factory equipment; quality control equipment used in food processing; cold-chain transportation, temperature control and food preservation technologies; and service technologies used in Japanese restaurants and department stores.
This approach is expanding the previous concepts of “Made in Japan” (manufactured in Japan) and “Made by Japan” (manufactured by Japanese companies). The new concept is the value-added “Made with Japan” concept — joint manufacturing with Japan, where those involved share the added value.
The TPP and the RCEP bring opportunities that cannot be ignored, so of course Taiwan should seek to join both partnerships.
Taiwan can learn from Japan’s aggressive strategy. It needs to understand the need for the transformation of Taiwanese producers, and establish public-private partnerships in cooperation with exporters. This would give full rein to Taiwan’s expertise in tropical and subtropical agricultural techniques and its advantages in food processing technology, creating a “Made with Taiwan” concept, so that the allure of Taiwan’s agricultural products could be marketed worldwide.
Hsu Shih-hsun is a professor of agricultural economics at National Taiwan University.
Translated by Clare Lear
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