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What's the Caution Behind "Chinese Onion Trade War"?
On April 23, Japan launched a provisional protecting measure to restrict three agricultural imports including green onion, fresh mushrooms and mats made of small iris from China. As things stand with Japan's import market, Japan has for long had imports of these from China.
Japan's restrictive measures mean that during the 200 days from now on till November 8 imports of these from China should not exceed the restricted quota set by Japan. Tariffs would likewise be levied at a 256, 266 and 106 percent rate respectively instead of a 3, 4.3, 6 percent. Just a few days ago, China and the ROK just made up the Sino-ROK garlic trade dispute. Now, one trouble follows another.
Japan is the largest market for China's agricultural exports. In recent years, China has exported over US$4 billion worth of agricultural products to Japan, accounting for about 30 percent of gross exports of China's agricultural products. With the improvement of the quality of Chinese products and enhancement of its competitiveness in prices, China's agricultural exports to Japan continuously increased and its quota in Japan's markets enlarged day by day, which aroused dissatisfaction from Japanese farmers and related industrial association.
Japan claimed that it has decided on protective measures because ballooning imports of agricultural products from China have severely damaged its domestic agriculture industry. The action is in line with the WTO regulations. However, according to statistics released, China's export volume of the above three products has reported no sharp increase in recent years, let alone "damaged Japanese industry". WTO rules allow practical measures to protect one's domestic industry, meanwhile, it also initiate to maintain a "fair play". Japan's launching of the trade war on China has diverged from the basic principles of the WTO both in procedures and substance. Notwithstanding a small proportion of the products in Sino-Japanese trade, Japan's irrational, unfair and unilateral discriminative action will bring irrevocable harm to Sino-Japan economic and trade relationship. Japan's restrictive measures will not only lead to a huge loss to Chinese export enterprises, producers and farmers, but will also damage the benefits of Japanese import enterprises, consumers and investors in China.
The trade dispute is still under progression. Whether it can be settled in a "two-win" way is still not clear. However, one point here should be pondered: what's the caution behind the "Chinese onion trade war"?
Trade conflicts between countries are unavoidable under the general trend of economic globalization of the world. As an important member on the stage of international economy, China possibly may have trade conflicts with any country or region at any moment. After entering the WTO, China will confront more trade protectionism barriers such as anti-dumping, anti-allowance and other protective measures. Some domestic industries may have bigger troubles if China fails to answer the challenges by adopting effective measures in line with the WTO rules. Taking agricultural products for example, China is a large agricultural country. Agricultural products have always been a focus as well as a difficult issue in China's WTO entry talks. However, a thorough analysis shows that not only China's agricultural products have been obstructed, some other countries such as the US and ROK have come across the same problem. Japan used to launch urgent restriction on US onion and ROK tomatoes and green peppers. Obviously, it is the specialty and sensitivity of agricultural products that make it a leading role in trade wars. China's domestic industries must face the fact squarely and master the rules of the games actively. They must improve their adaptability and competitiveness as well. With regard to agricultural products, the related enterprises should further adjust their structure and vigorously promote further processing and development. They should intensify the content of hi-technology in their products and gain the upper hand in the quality of their exports by which means to give no excuses to other countries for any trade dispute. Meanwhile, they should also pay attention to promoting the diversification of the market. Only in this way, can our exports get a steady foothold on the international market. Besides, governmental institutions and industrial associations should lend a hand in working out a corresponding strategy and set up necessary information channels and alarming system, so as to help domestic enterprises grow up as soon as possible and avoid unnecessary loss in international trade wars.
By PD Online staff member Du Minghua
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