TPP: If Japan cools, Vietnam would have opportunities

VietNamNet Bridge – Vietnam can see the great opportunities to develop its agriculture and boost farm produce exports to Japan, one of the 12 countries joining the negotiations for TPP (Trans-Pacific Strategic Economic Partnership Agreement), if the country accepts to remove the policies to protect its domestic agriculture production.

tpp, japan, vietnam, agricultural export

The dilemma for Japan

“Only when all the players can get benefits, will the games be long lasting. However, better players will get bigger benefits,” said Nguyen Dinh Luong, former Head of the Negotiation Team for the Vietnam – US Bilateral Trade Agreement (BTA) to reporters when discussing the TPP negotiations at APEC 21.

There has been no sign showing that Japan would make concessions in the negotiations about the country’s policy on protecting its agriculture production. This means that the other members of TPP would not have the opportunities to access the large and potential market.

While Japan insists on the local agriculture protection policy, the Japanese government has shown its determination to successfully negotiate for the TPP membership.

To date, Japan has conducted bilateral discussions with Mexico, Vietnam, Canada, Malaysia and New Zealand.

According to Matthew Goodman and Michael Green from CSIS, an international strategy research center, TPP plays an important role in the Japanese strategy to recover the national economy which is in big difficulties.

Analysts believe that the TPP membership enables the Japanese economy to grow by 2.5 percent or more by 2025.

However, agriculture, especially the rice production, remains a very sensitive market. Japan, the country which is not rich in natural resources if compared with other TPP countries, still has not climbed down in the issues relating to agriculture production.

Therefore, there would be two scenarios with Japan.

In the first one, Japan would keep conservative to protect its local agriculture production and the benefits of farmers, who give high support to the PM Shinzo Abe’s administration. If so, the GDP growth rate may be unattainable.

In the second one, Japan would give in, accepting the market rules in the agriculture production to join TPP.

The country may choose a third solution which can harmonize the farmers’ benefits and the national benefits.

The opportunities for Vietnam

Analysts say one of the good solutions which can help Japan get adapted to the TPP playing field in the agriculture sector is that it signs bilateral economic cooperation agreements with big food exporters.

With the solution, Japan would not have to “battle” with the other TPP members in an unequal struggle, but it would turn the rivals into the partners on the basis of mutual benefits.

If Japan accepts the solution, it would not be a surprise if Japanese rice companies begin the programs on outsourcing to the countries and territories with advantages for agriculture development. Vietnam is one of them.

The outsourcing will bring big benefits to Japan, including the long term food security, and the high quality products.

Analysts believe that the cooperation between Vietnam, a country with great advantages to develop the agriculture, with Japan, the country with the third highest demand for rice imports, proves to be “very potential.”

They believe that Vietnam and Japan can cooperate in three ways.

First, Japan transfers its whole system of agriculture production and management to Vietnam, where the production can be carried out with lower production costs.

Second, Japan transfers a part of the production system, including machines and production technology to Vietnam. The Japanese machines and technology plus the Vietnamese laborers and natural resources would allow to generate stable supplies at low prices.

Third, Japan orders Vietnamese enterprises to make the products in accordance with Japanese standards.

Kim Chi

tpp, japan, vietnam, agricultural export