The Entry Into Force Of RCEP Brings Opportunities And Challenges To Sino-Japanese Agricultural Trade

On January 1, 2022, the Regional Comprehensive Economic Partnership (RCEP) came into force. This is the first time that China and Japan have reached a tariff reduction arrangement, which can be regarded as a "zero breakthrough" in China-Japan free trade relations. Since China has previously signed free trade agreements with ASEAN, South Korea, Australia, and New Zealand, only there is no free trade agreement with Japan, and China and Japan are the largest trading partners in the region. Therefore, the entry into force of RCEP will affect China and Japan. It is especially important for the country.

For a long time, China and Japan have been each other's important agricultural trade partners. Especially after China's accession to the WTO, the trade in agricultural products between China and Japan has grown rapidly. However, with the signing of free trade agreements between Japan and Thailand, Vietnam, etc., which has caused trade diversion to my country, coupled with the impact of technical trade measures such as Japan's implementation of the "positive list" system for pesticide residues, my country's agricultural exports to Japan have declined to a certain extent. According to Chinese customs data, China's agricultural exports to Japan increased from US$5.74 billion in 2001 to US$12.02 billion in 2012, and then declined, dropping to US$10.38 billion in 2019 and falling to US$9.64 billion in 2020, the first time it fell below $10 billion mark. This situation will take a new turn in 2021. As my country's new crown pneumonia epidemic was brought under control globally, the export of agricultural products to Japan showed a recovery growth. In the first 11 months of 2021, my country's export of agricultural products to Japan was US$9.4 billion, a year-on-year increase of 6.6%, and it is expected to return to the level of more than US$10 billion for the whole year.

According to the RCEP agreement, Japan promised to give zero-tariff treatment to 63.3% of China's agricultural products. From the perspective of specific products, most of the aquatic products, fruits and vegetables, nuts, flowers and processed foods that my country has an advantage in exporting to Japan will enjoy this treatment, which will play a positive role in further expanding my country's export of agricultural products to Japan in the future. At the same time, China also promised to gradually eliminate tariffs on 86.6% of Japan's agricultural products, and Japan's aquatic products, processed foods, and specialty alcohol will also enjoy zero-tariff treatment. Under the RCEP framework, the two countries can also work together to complement each other's advantages to jointly expand agricultural cooperation and trade in agricultural products in the Asia-Pacific region to achieve mutual benefit and win-win results.

During the RCEP negotiations, although Japan has kept five important agricultural products such as rice and wheat without tax reduction, my country's export advantages in aquatic products, vegetables, fruits and other fields are almost completely eliminated. Among them, the tariffs on aquatic products are 10%, 17% on fruits and 30% on fruit juices. Once these tariffs are cancelled, it will be a huge "bonus" for my country's export enterprises. According to calculations by Professor Nobuhiro Suzuki of the University of Tokyo, after RCEP takes effect, Japanese agriculture will give up a market of 562.9 billion yen (equivalent to 5.14 billion U.S. dollars), of which vegetables and fruits will be 85.6 billion yen (equivalent to 782 million U.S. dollars), accounting for 15.2%.

Of course, after RCEP takes effect, more and more agricultural products from partner countries will enter the Chinese market. The base of Japan's agricultural exports to China is small, but the growth momentum is very rapid. In 2001, this amount was less than 300 million US dollars, and in 2020 it has reached 1.28 billion US dollars. In the first 11 months of 2021, it has skyrocketed to 1.76 billion US dollars, a year-on-year increase of 38.5%. The goal of quadrupling. However, if we take a closer look at the types of export products, we will find that most of them are processed foods such as scallops, sake, whiskey, beverages and cakes. Although the value is high, the total amount is not large. It is difficult to have an impact on domestic agricultural products, but may force China The high-quality development of agriculture has become the driving force for enhancing the competitiveness of domestic agricultural products. From the perspective of ensuring food security and promoting the upgrading of residents' consumption, the consumption of higher-quality and more diverse products is also conducive to improving the nutritional and health level of residents. For example, the general tariff on Japanese sake reached 40%, and the tariff dropped to zero immediately after the RCEP agreement came into effect. If domestic consumers used to buy a bottle of Japanese sake for 280 yuan, they may be able to buy it for less than 200 yuan now.

In addition to lower tariffs, customs clearance will also be more convenient. For example, fresh agricultural products such as vegetables and fruits, each country promises to strive for 6-hour customs clearance, which means that the fruits and vegetables picked in China on the first day can be delivered to the dining table of Japanese people on the second day. The RCEP agreement also has a rule of origin accumulation, which is conducive to international division of labor and cooperation, promotes mutual cooperation between China and countries in the region, and jointly makes the value chain of Chinese agricultural products longer and further enhances the competitiveness of agricultural exports.

To sum up, in the short term, RCEP will bring both opportunities and challenges; in the long run, it will definitely be a booster and booster to enhance the vitality of China's industrial development. As long as China is better acquainted with and makes full use of its rules, it will be able to turn challenges into opportunities more quickly.