The Impact Of Green-barrier On Chinese Vegetable Export To Japan

After the Uruguay Round and the establishment of WTO, the entente countries around the world promised to reduce tariff and gradually reduce traditional non-tariff barriers. However, the WTO agreements are not perfect for the developed countries taking advantage of its loopholes and gray areas. For example, the developed countries formulate a series of trade measures to restrict or forbid the imports from importing countries, so as to protect their natural resources, ecological environment, the health and safety of human and animals. These trade measures refer to the green trade barrier. Compared with the previous trade protectionism, green trade protectionism has two major characteristics, the first is that most of the previous trade protectionism was put forward by the economically undeveloped countries to protect their weak industries; while the green trade was originated in the developed countries to protect technical advantages and monopoly advantages. The complex and strict measures, taken by the developed countries, form the green barriers on the developing countries to export their products. The second characteristic is that the previous trade protectionism focused on tariff and traditional non-tariff measures (quota and license, etc.) with clear motivations, while the green barrier focuses on non trade and obscures the true motivation of trade protection.Foreign trade of agricultural products takes up an important position in China’s agricultural development. The export of agricultural products plays a positive role in promoting the rural employment, increasing the incomes of farmers, optimizing the industrial structure of agriculture and improving the international competitiveness of agricultural products. Especially since China joined the WTO, China’s trade of agricultural products has experienced sustained and rapid growth, and has played the increasingly important role in the world agricultural products trade. Vegetables are the important products of China’s agricultural exports and China’s most internationally competitive products. However, at present, vegetables are most vulnerable to green barriers and trade frictions. Most of Chinese vegetables are exported to Japan. In recent years, Japan has frequently used the green barrier to China’s vegetable trade, which brings the challenge to China’s vegetable export. With the frictions of China’s vegetable export trade as a typical case, this paper combines theory and practice to make empirical analysis. Through the analysis on the frictions of vegetable trade between China and Japan, this thesis finds out the countermeasures to break the green barriers of agriculture and properly solve the trade frictions.Chapter I Introduction, mainly introduces the research background and significance of this paper. Reviewing the case of Japan implementing the green trade barriers on China, this paper finds out that the green barrier affects China’s vegetable trade from the two aspects:increasing the export cost and reducing the export quantity. Through the research status at home and abroad, this paper learns that according to most researches, the green barrier refers to be relevant measures implemented aimed at international trade, under the pretext of environmental problems or human health problems and with the purpose of protecting the domestic industries in the importing countries; most researches argue that the green barrier is one of the main forms of green trade protectionism, which has other means such as green tariffs and green subsidies.Chapter II firstly introduces the basic concept and forms of green barrier, and analyzes that the green barrier has the following characteristics:diffusibility, discrimination, concealment, suddenness and timeliness. Then, this part introduces the theoretical basis of the green barrier:trade protectionism, the theory of sustainable development, information asymmetry theory and externality theory. Based on analyzing the development background of trade protectionism, this chapter clearly points out that the green trade protectionism is a new development model of trade protection theory in the new economic condition. This part defines the green barrier as the technical barrier, and distinguishes the green barrier from other green trade protection measures (green tariffs and green subsidies). Through the analysis of green barrier’s characteristics, formation background and reasons, this part further analyzes the reasons for the countries implementing green barriers theoretically. In addition, this part discusses the development trend of green barriers that the scope of involved products are continuously expanding, the requirements for standards are more stringent, and the increased mandatory technical standards involve the whole process of producing and processing products. Chapter Ⅲ analyzes that how the green barrier plays its role under the framework of WTO. This paper introduces the two agreements which are closely related with the green barrier: TBT Agreement and SPS Agreement. On this basis, this paper researches the main implementation tool of green trade protectionism--green barrier, and analyzes the influences of green barrier on international trade and social welfare from the perspective of theory. Through the analysis, this paper has drawn the conclusion:1. The green barrier will cause the exported products to increase the cost, to be refused by the market or sales decline, and the exports will be impeded.2. The green barrier will reduce the export quantity and even forbid the trade.3. From the perspective of the social welfare, the green barrier will reduce the total social welfare of the importing country, and cause the importing country to experience a large loss of consumer surplus. The importing country’s producer surplus is the only one benefiting from the green barrier.4. The green barrier brings the higher net loss to the importing country’s producer surplus and consumer surplus than to green subsidy and green tariff.ChapterIV and Chapter V are the core of this paper. ChapterIV expounds the current situation of China’s vegetable trade and the exported vegetable to Japan, and abstracts the characteristics of China’s foreign trade of vegetable. Then, adopting the market share index, NTB, RCA and CA, this chapter analyzes the market competitiveness and cost comparative advantages of the main varieties of China’s vegetables. The analysis results can be summarized as follows:1. China’s vegetables have strong international competitiveness.2. The competitiveness of vegetables with different varieties differs.3. China’s vegetable’s cost comparative advantages are much higher than food crops such as the corn. In addition, through comparing the cost of Japanese vegetables with China’s vegetables, this part finds that China’s vegetable production cost is far lower than Japan. The high labor cost is the main cause of the high cost of Japanese vegetables. Therefore, when exporting the vegetables to Japan, we should select the vegetables which are invested with more labor and preferred by Japanese consumers, so we could get the advantage when competing with Japan domestic vegetable industry. Finally, this part sums up the competitive advantages and disadvantages of China’s vegetables exported to Japan. Chapter V firstly analyzes that a series of green trade barriers implemented by Japan have a considerable impact on China’s vegetable export enterprises. Then, this part analyzes the influences of Japan’s green barriers on China’s vegetables from two aspects of trade and production.(1) From the empirical analysis of trades with Japan, green barriers can impede China’s vegetable exports more dramatically than tariff trade barriers, for the reason that green barriers can not only increase the cost of imported products, but also directly limit the quantity of imports, so as to protect the related domestic industries in japan. At present, compared with the tariff barrier, the green barrier is more concealed. From the aspect of trade cost, due to the low vegetable production cost in China, the circulation cost of exports has become a decisive factor in the export cost. Japan’s technical barrier can increase the vegetable cost and weaken the competitiveness of China’s vegetable through increasing the additional inspection and quarantine fees, transportation costs and loss expenses.(2) From the empirical analysis of vegetable production in China, in order to meet the increasingly stringent technical standards of Japan, China’s producers of exported vegetables have to adjust production mode to reduce the chemical substances such as pesticides used in vegetables. Hence, the production cost of China’s exported vegetables will be directly affected, and the competitiveness of China’s vegetables is further weakened. From the empirical analysis, the latest minimum residual pesticide standard formulated by Japan will have a considerable impact on China’s vegetable export industry, especially on the production cost, the input factors and technology structure. On the premise of ensuring teh unchanged output and reducing the pesticide, the production cost of China’s exported vegetables will increase, which will directly weaken the comparative advantages of China’s vegetables.Based on the previous chapters, ChapterVI further analyzes the reasons for Japan implementing green barriers on China’s vegetable export. The first reason, the superficial one, is that China’s agricultural production has some environmental problems which are mainly caused by pesticides, fertilizers and industrial pollution. Due to these problems, Japan implements the measures related to green trade barriers on China. Japan’s green barriers are mainly aimed at the pesticide residues of China’s vegetable products; while the low standards of China’s vegetable production and pesticide residues cause China’s pesticide residues to fail to be up to Japan’s standards. Therefore, it is necessary to change pesticide’s usage and dosage in China’s vegetable production, and improve China’s MRL standards to conform to international standards. On the other hand, there’s a deeper reason for Japan implementing green barriers on China, namely, trade protectionism. In fact, Japan importing vegetables from China is beneficial to the total welfare and consumers in Japan. The basic reason for Japan adopting the measures of the green barrier to restrict China’s vegetables exported to Japan is to protect its domestic industry. In view of the above reasons, this part proposes countermeasures and suggestions. This part argues that green barriers will inevitably lead to the increasing production cost of China’s exported vegetables, therefore, only by taking the active countermeasures can China reduce other losses caused green barriers and uncertain factors.(1) Active production countermeasures should be taken. China should establish the standard system and monitoring system of vegetable products in line with international standards. At the same time, we should change the traditional production mode, produce green and organic products by adopting circular agriculture, and break green barriers.(2) Active trade countermeasures should be taken. We should change the previous disorderly competition to form the benign competition, establish the industry association of China’s vegetable export and commonly resist green barriers. At the same time, we should improve the quality of China’s exported vegetable products and break the green barrier.