The Trans-Pacific Partnership (TPP) is set to open up Japan's market and bring import tariffs down to zero. A report by Japanese investment consulting firm Seiko Ideas Corp. said Japan would have to allow imports of even the most sensitive items from all TPP members. This would put Japan in a disadvantageous situation since its agricultural production is small and expensive, it said.
For this reason, Japanese firms have decided to step up investment in the Vietnamese agriculture sector since the latter is also a TPP member.
They could then export products from Vietnam to their country paying zero tax. The TPP stipulates that to enjoy the zero tariff, a product must have 70 per cent content from member countries.
Nguyễn Đỗ Anh Tuấn, head of the Institute for Policy and Strategy for Agriculture and Rural Development, told Việt Nam News Agency that Japanese investors had already started going around the country looking for opportunities to invest in hi-tech farming.
Some had already begun production, including of vegetables in the Central Highlands province of Lâm Đồng and mangoes in the Mekong Delta province of Đồng Tháp and through a hi-tech project in the northern province of Vĩnh Phúc.
In Lâm Đồng, Nikko Foods Company is working on a $820,000 high-quality tomato farming project.
Once it takes effect in 2018 the TPP is expected to give a push to Vietnam-Japan agricultural investment and trade by opening the market for 38.4 percent of their agricultural products, 64.8 percent of aquatic products and 17.2 percent of wooden products, according to Tuấn.
Japan will immediately remove tariffs on 78 percent of Vietnamese agricultural exports and the figure will rise to 88.5 percent in the next five or six years.
This is a good opportunity for Vietnam to expand its exports, increase its access to major markets around the world and join global supply chains.