The Impact of Food Safety Regulation on Trade: In the Case of Japan after 2011

Abstract

Japan relies heavily on import products including semiconductor, vehicles, computers, and most importantly the daily agricultural products. They also heavily rely on the export commodities for their economic growth and stability.

Among many traded commodities, Japans food sectors consist of seafood, vegetable, and meat products. Of all the food products being exported, Japan is a leading exporter of seafood products, with the amount totaling up to about 40% of all food exports. However, since the Fukushima accident, the atmosphere in export has been changing.

The impact of Japans earthquake and tsunami has left serious damage in many parts of Japan. It has made physical damage amounting up to $195 billion to $305 billion. 23,000 people went missing or were reported killed. The main side-effect led to Fukushima Dai-ichi nuclear power plant accident. KOTRA reported that the Japan production companies are facing 20 to 50% decrease in manufacturing products, depending on each commodities, due to the Japans Dai-ichi nuclear plant incident. And there were more than 400,000 damaged buildings. It has been three years and eight months since the incident of the Japans earthquake and Fukushima Dai-ichi nuclear power plants accident, however, the worrisome eyes towards the food supplies being produced in Japan is growing bigger as the time pass. This is mainly because there are continuous reports stating that the leakage from nuclear power plant has not stopped and is still on going.

Japan has been showing trend of decrease in the trade volume of agricultural and seafood products since the 2011 Fukushima power plant accident. The Japanese government are aware of the possible danger in their food products. They have announced that fishery activities should not resume in the area of Fukushima prefecture. Naturally, many countries, including Canada, China, European Union, Korea, and United States has raised their surveillance levels on the imported food from Japan.

Japan has been requesting their trading partners to remove any discriminating policies and unreasonable increase in surveillance level of their food imports. It is true that in the previous studies it has been proven that the policies on food safety level of one country does impact the amount of trade volume of agricultural and seafood products. However, is the phenomenon of export volume decrease in Japan also due to the policy imposed on the Japanese food imports from neighboring countries? If it is, is it significant enough to blame the decrease in export volume on the regulations of the other countries?

The policies imposed on Japanese imported goods vary from one country to another, some having stricter restrictions as opposed to others not having any sort of barriers. This study will find to see if the strictness of the policy imposed due to the Fukushima power plant accidents has significant impact on the change in export volume of Japanese agricultural and seafood commodities.