by Brian Hioe

Photo Credit: The Cosmonaut/WikiCommons/CC

TAIWAN HAS expressed dissatisfaction after China acted to block imports of grouper last Friday, alleging that it had found oxytetracycline and other prohibited chemicals in excessive amounts in grouper imports from Taiwan. For its part, Taiwan has suggested that China’s actions are politically motivated, similar to China blocking imports of pineapple, wax apple, and custard apple, as a way to hit back at Taiwan’s agricultural sector. Following the dispute—in a possible escalating move that became public earlier today—China blocked imports of frozen white ribbon fish from a Taiwanese company thought to be located in Keelung, claiming that COVID-19 virus was found on its packaging. 

Taiwan is one of the world’s major exporters of grouper, which are primarily farmed in southern Taiwan. A single grouper can be worth more than 10,000 NT. Grouper were among the first items to have tariffs phased out for export to China, under the Economic Cooperation Framework Agreement dating from the Ma administration, with the Ma administration in 2011 vowing to double the value of the grouper industry by 2013, and eventually aiming to make Taiwan the world’s largest global exporter of grouper. 

Photo credit: Amada44/WikiCommons/CC

At the time, there were high hopes as to the potential of the industry for Taiwan, and for China as a market for grouper. In 2011, 70 to 80% of Taiwanese groupers were exported to Hong Kong, the world’s largest consumer market for groupers, and to coastal areas in China. Part of Taiwan’s advantage was closer geographic proximity to Hong Kong than other places that farm groupers, including Hainan in China. By last year, 91% of Taiwanese grouper exports were sent to China, while the remainder were sent to Australia, the US, Japan, and New Zealand. 

With regards to the dispute earlier this month, the Chinese government claims that excessive drug residues were found in grouper from two Taiwanese farms. The Council of Agriculture subsequently carried out its own investigation and found no traces of excessive drug residues. Testing in 2019 and 2020 also did not turn up drug residues. 

However, afterward, the Chinese government has reportedly not responded to further queries from the Council of Agriculture. The Mainland Affairs Council has also called for further dialogue on the issue, with apparently no response. The Taiwanese government has brought up that the Chinese government did not return or destroy the grouper shipment, as would be expected in such a situation, but instead escalated by making it into an issue affecting all grouper imports from Taiwan. 

Generally, China’s actions were similar with regard to the pineapple, wax apple, and custard apple bans, for which China cited mealy bugs found among Taiwanese products as the pretext for its ban. China is a major market of pineapple exports for Taiwan, constituting 95.2% of pineapple exports at a value of 155.23 million USD between 2018 and 2020. 

Yet according to customs data, China only found 13 instances of mealy bugs among pineapple export batches, while 99.79% of pineapple exports passed inspections, which raised questions from Taiwan as to the authenticity of China’s claims. China announced an increase in the sampling rate for pineapples in 2015, shortly before the Tsai administration took office, and new controls for pineapples were introduced in October 2020, though this did not lead to cases of mealy bugs being found. 

Nevertheless, the timing of the pineapple ban was thought to coincide with just before harvest season, so as to impact Taiwanese farmers. Indeed, the cases of mealy bugs being found in pineapples sent from Taiwan took place from March to May 2020, but the Chinese government waited nearly a year before acting on this in February 2021. China’s measures have targeted Taiwan’s highest earners in terms of fruit sales, as these are pineapple, custard apples, and wax apples. 

Taiwanese farmers have traditionally been a demographic that have supported the KMT, due to KMT leverage over-irrigation associations that provide water farmers need, and distribution networks for agricultural produce that farmers need to ensure their goods make it to market. To this extent, Taiwanese farmers saw China as a promising market for their goods. China may be hoping to influence this demographic, then—and it could potentially be seeking to do the same with the fishing industry, who depend on similar centralized nodes of distribution. 

The Tsai administration responded to the pineapple ban with 22 incentives for pineapple farmers and a 1 billion NT marketing campaign for Taiwanese pineapples. To this extent, it sought to tout Taiwanese custard apples and pineapples as a high-end agricultural product in Japan. 

Likewise, the pan-Green camp rallied Taiwanese to purchase domestically-grown pineapples in order to counter China’s actions. As only 10% of Taiwan’s domestic pineapple produce is exported, this did not prove difficult, and a year’s worth of exports was instead sold domestically in four days. 

The Tsai administration has acted similarly with the grouper ban, stating that it will forward more data to China, and increase measures to assist affected farmers. President Tsai Ing-wen also criticized China’s actions publicly. 

Facebook post by President Tsai Ing-wen about the grouper ban

Several days after the dispute about grouper, then, China next acted to block imports of frozen white ribbon fish. The ban only lasts for seven days starting on June 10th, though news of this only broke publicly close to the end of the ban. The Council of Agriculture has called on China to provide scientific evidence of COVID-19 virus being found on its packaging. In particular, the Tsai administration is likely to see China as attempting to reinforce its narrative about COVID-19 originating from outside of China but entering through contamination on frozen food packaging through this claim, leveraging on Taiwan’s current COVID-19 outbreak. 

Either way, as with such previous incidents regarding pineapple, custard apple, and wax apple, Taiwan has also suggested that it might take the grouper dispute to the World Trade Organization (WTO). Nevertheless, it is possible that the Chinese government would retaliate with further actions against Taiwan in the WTO, finding points of leverage regarding Taiwanese trade practices to attack. 

At the same time, it is possible that Chinese efforts to target Taiwan using agricultural products such as fruit or fish may backfire, with the Chinese market viewed as increasingly volatile by agriculture and aquaculture. Last year, fruit exports to China decreased to 45% from 80%, while 6,000 tons of grouper went to China, compared to 10,000 tons in past years. Going forward, Taiwan’s agriculture industry may be cautious of reliance on the Chinese market given the possibility of being targeted by the Chinese government for political reasons. 

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