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Regulation and Rule Issues in Japanese Supply Chains

This article discusses hot issues related to regulation and rule challenges in Japanese supply chains, including the Kyoto Protocol, Fukushima, beef traceability, rice tariff, and the TPP.

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Regulation and Rule Issues in Japanese Supply Chains

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  1. Regulation and Rule Issues in Japanese Supply Chains SCTL Meeting, Los Angeles Discussant Hirofumi Matsuo

  2. Hot Issues • Kyoto Protocol Issue • Fukushima Issue • Beef Traceability Issue • Rice Tariff Issue • TPP issue

  3. Kyoto Protocol Issue • Japan’s commitment under the Kyoto Protocol: To reduce its total greenhouse gas emissions by 6% from 1990 level in the first commitment period of 2008-2012. • Japan did not participate in the second commitment period of 2013-2020. (COP18) Japan, Canada and Russia withdrew, reducing the participating region from 25% to 15%.

  4. Kyoto Protocol Issue • Japan’s commitment of 6% reduction will be satisfied, considering Kyoto Mechanism and GHG sinks. • Kyoto Mechanism – transfer of environment-related technology to developing countries in exchange for emission credits. • GHG sinks (forestry and urban greening) Q: The current world economy is weak, nuclear reactors exploded, and shale gas is being explored. What can be done to reduce the total greenhouse gas emissions from SC viewpoint?

  5. Fukushima Daiichi Nuclear Accident (Radiation Contour lines drawn by Yukio Hayakawa, Gunma University) http://blog-imgs-54-origin.fc2.com/k/i/p/kipuka/0121A.jpg 8 mSv/h 4 mSv/h 2 mSv/h 1 mSv/h 0.5 mSv/h 0.25 mSv/h

  6. Nuclear Plants in Japan

  7. Radioactive Food Contamination • Cs-137 legal limit for food in Japan • vs. For tap water, WHO (1 Bq/l), US (0.111Bq/l) • “Less than 1 mSv / year from food” is the basis for the above limit on 4/1/2012. • Japan’s public radiation exposure limit = 1 mSv Q: Should the rule for food safety depend on economic consideration?

  8. Beef Traceability Issue “The Law for Special Measures Concerning the Management and Relay of Information for Individual Identification of Cattle” (Ordinance No.72, in 2003) stipulated in order to make the foundation for implementing measures aimed at preventing the spread of bovine spongiform encephalopath (BSE) of which the first case in Japan was detected in 2001

  9. Beef Traceability Q: Food traceability is feasible for some products. Is this really for safety or for promoting “Wagyu” export? Items to be Disclosed Publicly https://www.id.nlbc.go.jp/english/index.html • Individual Identification Number • Date of birth or import • Gender • The Individual Identification Number of the maternal parent • The location (prefecture name) of the Raising Facilities • Start and end of the breeding in the breeding facilities. • Date of slaughter, death or export • Breed of the cattle • For imported cattle, the name of the exporting country • The title and location of the abattoir where the cattle were slaughtered • For exported cattle, the name of the importing country

  10. Rice Tariff Issue • Source: “Why agriculture needs different treatment in trade rules?” (Ministry of Agriculture, Forestry and Fisheries, May 2003) • The current rice tariff in Japan is \402/kg. • Its wholesale price declines from \23K/60kg in 1993 to \16K/60kg in 2000 (i.e., The current tariff is \24K/60kg.)

  11. Rice Tariff Issue • Japan is the largest net-importer of farm products. • Japan’s food self-sufficiency is 40% in calorie intake basis. • 95% of Japanese are calling for ensuring national food security.

  12. Rice Tariff Issue • Japan’s average farm size is 1.6 ha with scattered ownership and slow mobility of farmland. • Rice farming generates external benefits of more than 8 trillion yen (US$80 billion). Q: From the viewpoint of sustainability and infeasibility of improving productivity, should rice be protected as the Japan’s ministry claims?

  13. TPP Issue Q: Should the following be treated in the same manner: materials, manufactured goods, operational services, financial services, and corporate governance, and government rules? Trans-Pacific Partnership (TPP) (Singapore, Chile, NZ, Brunei) + (Peru, Australia, Malaysia, Vietnam ,US) + (Mexico, Canada ) + Japan? • TPP countries will make open their markets to each others’ goods, services, and government procurement. • Demerits in agriculture, food safety (GMF, additives, residual agricultural chemicals), national medical insurance system, financial service • ISDS (Investor-State Dispute Settlement): The International Centre for Settlement of Investment Disputes (ICSID) facilitates arbitration and conciliation of legal disputes between investor and state.

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