High-Value Product Exports

East Asia holds great promise for importing greater amounts of high-value agricultural products from the United States. As incomes rise and urbanization proceeds in this region, the demand for easily prepared convenience food is likely to grow and consumption is expected to shift away from cheaper unprocessed commodities to high-value processed commodities. This report discusses (1) the potential for increased exports of U.S. agricultural high-value products to Taiwan, Malaysia, and Indonesia; (2) factors that may hinder the growth of such U.S. exports to these markets; (3) the market development activities needed to be competitive in these markets and the approaches taken by U.S. companies; and (4) any assistance needed from the U.S. government to enhance the competitiveness of U.S. businesses in these countries.

GAO found that: (1) Taiwan, Malaysia, and Indonesia are potentially good markets for increased U.S. HVP exports, since rising incomes, an expanding middle class, an increasing preference for Western-style food, and more women in the workforce have increased the demand for HVP; (2) U.S. HVP exports to these countries are increasing faster than U.S. exports of bulk products; (3) the factors that could limit increases in HVP exports include high tariffs, nontariff trade barriers such as import licensing, and local and third-country competition; (4) although the countries have attempted to reduce their tariffs, import tariffs in these markets remain high on many agricultural products; (5) U.S. companies lack a strong commitment to exporting, which is a key to success in these markets; (6) U.S. companies' commitment to exporting can be demonstrated through marketing activities such as developing an export strategy, conducting market research, adapting products to specific markets, establishing a local presence, developing a promotion plan, and providing after-trade servicing, but few U.S. companies engage in these activities; and (7) the U.S. government could help exporters by providing more practical and product-specific market information and working with foreign countries to lower tariffs and remove nontariff trade barriers on HVP.