23 May 2013

Fonterra looks to Japanese market

8:18 am on 23 May 2013

Fonterra says it may be interested in investing in Japan in the long term after funding research which highlights the benefits of Japan joining the proposed Trans Pacific Partnership (TPP) free trade agreement.

The TPP is under negotiation between 12 countries including New Zealand and Japan.

The independent research by two Auckland University professors found that the entry of Japan could potentially trigger a revitalisation of its agriculture sector.

Fonterra director policy and advocacy Sarah Paterson says Fonterra's main aim in funding the research was to find out from an independent source the potential impact of TPP on Japan's agriculture industry, after previous opposition by the sector.

Ms Paterson says the report highlights the potential trade opportunities with Japan which could lead to future investment.

She says the TPP framework is about opening up opportunities for trade as well as supporting closer economic integration.

"Our experience is that often it's the trade side that comes first and that that can create opportunities for all companies in terms of thinking about future investment down the line."

The report says that many small scale farms in Japan are uneconomic while the average age of Japanese farmers and the area of abandoned farmland are increasing.

It says Japan's agriculture needs to transform into a competitive sector with export potential.