Japan's Agri-Food Sector and the Trans-Pacific Partnership

Abstract

Japan's agriculture has been inward oriented, protected by trade barriers from foreign competition. Even though the share of Japan's food consumption provided by Japanese production has gradually fallen, Japan's farm sector remains the second-largest among the countries negotiating the Trans-Pacific Partnership (TPP). Japan's food industry is increasingly integrated with TPP economies, although the TPP share of Japan's agricultural imports has fallen over time. The proposed TPP agreement would lead to more agricultural exports to Japan from TPP partners, likely dominating the total agricultural trade impact of such an agreement. Despite potentially large import increases, especially in the rice, beef, and dairy sectors, the proposed agreement would only marginally reduce Japan's output. Intrinsic strengths of Japanese agricultural production and constraints to the growth of supply in the rest of the TPP countries may limit the impact of the agreement on Japan's agriculture. Nevertheless, U.S. exports would be well positioned to meet Japan's new import demand.

Research on Relationship between CPTPP Participation and Japan Agricultural Product Import

“…TPP would have impact on Japan's agricultural import. It is suggested that TPP agreement would lead to more imports from other TPP participation countries, "dominating the total agricultural trade impact of such an agreement" [6], despite it would have little reduction on domestic production. Imports from TPP partners are substantial and most of them are relatively steady, though actual values have dropped due to the increasing imports from China and Thailand.…”

The Political Economy of Japanese Trade Policy

“…In contrast, Japan's food industry, with less protection and high input costs, became outward-oriented, with global investments in farming, food manufacturing and distribution and retailing (Dyck and Arita 2014). The Japanese soybean processing industry, for example, has been an active investor in overseas farms, processing facilities and trading companies.…”

“…Further, in 2012, Japanese households spent over one fifth of consumption on food-related items compared to only 11 per cent for American consumers (United States Department of Agriculture 2013). In 2013, the value of agricultural exports was less than 4 per cent of domestic agricultural sales, and agricultural imports had grown more slowly than overall imports for more than two decades (Dyck and Arita 2014).…”

“…7 While the Japanese government predicted that a comprehensive TPP agreement would reduce agricultural output by more than 40 per cent, the competitiveness of the sector is likely to increase with deregulation and more open trade (Dyck and Arita 2014). 8 Further, the low level of productivity in agriculture has held back Japanese restructuring and growth (Asakawa et al 2013).…”

Vietnam's Agri-Food Sector and the Trans-Pacific Partnership

“…For Japan, tariffs for cassava starch are relatively high, and further liberalization could lead to significant gains. In the case of rice, Japan has a strong preference for shortgrain japonica rice and, even at zero tariffs, the country is unlikely to import much more of the long-grain indica rice that is grown in Vietnam (Dyck and Arita, 2014). Nevertheless, while Japan's consumption of indica rice is limited and unlikely to grow, indica is still a sizable import market (200,000-300,000 tons annually in recent years), and Vietnamese rice could potentially replace the indica rice imports which are currently dominated by Thai rice.…”