China in Transition

Eat Your Spinach, Japan

Chi Hung KWAN
Consulting Fellow, RIETI

Following the disputes over Japan's imposition last year of provisional safeguard measures on Welsh onions and two other farm products from China, trade frictions between the two countries is once again re-intensifying this year over residual pesticide found in frozen spinach imported from China. Japan has implemented restrictive measures on spinach imports from China, to which Beijing responded with criticism calling the measures non-tariff barriers.

The latest issue surfaced with the Japanese government's announcement in May 2002 to step up inspections of frozen spinach imports from China following the finding of residual agrochemicals exceeding the designated level from the product. On May 21, the Ministry of Health, Labor and Welfare announced a policy that inspection should be carried out on each shipment of frozen spinach declared for import. With more cases of unacceptably high levels of residual agrochemicals unveiled, a series of processed foods containing Chinese frozen spinach have been recalled and a number of retailers have been refraining from selling them. On July 10, the Ministry instructed importers to refrain from importing the products and reinforce inspection. Consequently, the import of frozen spinach from China has been completely stopped since the mid-August. Furthermore, the impact of the reinforced inspections and sales restraint is spreading beyond spinach, depressing Japan's overall vegetable imports from China.

The Chinese are demanding that Japan review its standards for acceptable levels of residual pesticides, insisting that Chinese frozen spinach frequently fails to clear the standards because spinach is subjected to unreasonably strict standards than those applied to other vegetables. Indeed, the acceptable level of chlorpyrifos in spinach is set at 0.01 ppm while komatsuna (Brassica campestris rapifera), a leafy vegetable similar to spinach, is subjected to a 2 ppm limit, 200 times more than the level allowed for spinach. Considering the fact that 99 percent of imported spinach originates in China, Beijing deserves certain sympathy for its account that Japan is trying to restrict imports from China in violation of the non-discrimination principle under the World Trade Organization.

Meanwhile in Japan, the revised Food Sanitation Law was enacted on July 31, paving the way for imposing comprehensive restrictions on the imports and sales of food products produced in a certain country if products from the country are highly likely to violate the law. On August 14, a working-level negotiation on this issue was held in Beijing, in which the Japanese explained the possibility of applying the new measure to frozen spinach produced in China. The newly enacted law is directly linked to the protection of domestic growers as it enables the government to implement a comprehensive import ban on a specific foot product. Indeed, members of the ruling Liberal Democratic Party - particularly those belonging to Agriculture, Forestry and Fisheries Division - had been demanding the enactment of this law. The recent fuss over Chinese frozen spinach gave them a perfect excuse for implementing import barriers on agricultural products.

When the Japanese government invoked provisional safeguard measures last year, it provoked substantial opposition from those viewing the move as a vote-garnering attempt by politicians supported by farmers. The latest series of moves, however, have hardly met with critical voices as they have been implemented under the name of consumer protection. Protecting consumers is surely necessary. But protecting farmers under the guise of consumer protection is no different from the invocation of provisional safeguard measures last year, and will further delay Japan's structural reform and distort resource distribution in the Japanese economy. Not only the regulatory authorities but also the Japanese general public should recognize this.

September 13, 2002

September 13, 2002