Economic Effect Of Positive List System Towards Chinese Agricultural Products Export To Japan

"Positive List System"(PLS),which was implemented by Japanese government on 29^th May 2006,is said to be the world's strictest standards of pesticide residue limits.Japan is the biggest importer of Chinese agricultural products while China is the second biggest exporter of farm products to Japan,Therefore,the implement of PLS has great negative impact towards China's export of farm products to Japan.Although PLS is benefit for securing Japan's food safety as well as residents' health,its violation against Scientific Evidence Principle and Non-discrimination Principle of SPS Agreement exposes its nature of Technical Barrier to Trade(TBT). By analyzing its economic effect,using partial equilibrium model,conclusion can be drawn as follows:in the short term,PLS has negative effect on China's export to Japan,decreasing producer surplus,increasing consumer surplus,worsening net welfare and trade condition.In the long term,PLS encourages agriculture producer to improve technology,thus having a positive effect on China's international trade.PLS restrain quantity and price of Chinese farm goods exported to Japan. Therefore it has negative impacts on exporters,related upriver companies,even the whole industry chain.The case-study of eel and tea indicates that PLS has negative impact on quantity of Chinese eel and tea exported to Japan by 607.6361 and 450.019 units respectively.Joint efforts should be made by government,guilds and companies.Government should set up system of internationalized standards of pesticide residue limits; enhance capability of inspection institutions;intensify propaganda and training; develop WTO diplomatism.Guilds should assist government to do research and negotiation,as well as enhance communication and guidance to companies. Enterprises should take active measures towards PLS,implying good agricultural practice and enhancing industry upgrading.