Evaluating the Impacts of Information and Communication Technology (ICT) on the International Trade in Fruit and Vegetables within the APEC Member Countries

Abstract

Dramatic innovations in information and communication technology (ICT) have been occurring in the past decade, which have resulted in a substantial decline in global communication costs. This is famously known as the 'death of distance'. Meanwhile, the global food marketing network is being constantly reshaped by shifts in demand and supply factors, greater consumer awareness of food safety, the emergence of global grades and standards, the application of food traceability systems, and concentration in the agribusiness value chain. This transformation of the global value chain in agriculture and food would provide both opportunities for, and constraints to, trade growth in fresh produce by the dramatic reductions in communication costs. ICT is likely to be especially important in generating trade in food products such as fresh fruit and vegetables that are: differentiated and sensitive to timeliness in supply; possess varied quality dimensions; and require considerable supply accumulation and assortment. Furthermore, the nature of global value chain of fruit and vegetables has recently shifted from 'supply push' to 'demand pull'. The consumer demands for food, and particularly fresh produce, are becoming more complex and more information-intensive. Therefore, we assume ICT can facilitate the accumulation and use of knowledge and information among the chain actors to build up global competitiveness in the demand-driven international food market. ICT is capable of enabling chain actors to correct for the traditional market failure of information asymmetry in the global agribusiness industry, in terms of price transparency and consumer demand. As well, it could reduce the transaction costs along the global value chain of fruit and vegetables through cheaper and more effective media, in terms of the communications costs, search costs and the costs of processing transactions. The primary objective of this study is to evaluate the impacts of ICT on bilateral international trade and the value chain in fruit and vegetables among the Asia-Pacific Economic Cooperation (APEC) member countries.