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All foods on the table in trade talks with Japan

The Australian

All foods on the table in trade talks with Japan

Peter Alford, Tokyo correspondent

Cath Hart

November 15, 2006

FREE access for all Australian farm products to the Japanese market will be on the table when free trade agreement negotiations start, but some won’t be there at the finish.

Trade Minister Warren Truss said yesterday Australian officials had resisted Japanese attempts to "carve out" sensitive commodities, particularly rice, from FTA negotiations that will start in earnest early next year. But he conceded it was unlikely all Australian farm products could be freed from Japan’s massive agricultural tariffs, which range from 30 to more than 700 per cent.

Prime Minister John Howard and Japanese counterpart Shinzo Abe are expected to announce the negotiations during a mid-December East Asian leaders meeting in the Philippines.

The agreement to pursue an FTA comes after two years of studies and preliminary negotiations, protracted by deep reluctance within the Japanese bureaucracy and the ruling Liberal Democratic Party to even discuss the massive tariff walls around their farm industries.

Resistance has been overridden by new Prime Minister Abe, who is anxious to strengthen Japan-Australia ties on all levels and generally to use FTAs to improve his country’s trade and diplomatic leverage in the Asia Pacific.

Mr Truss indicated yesterday the FTA feasibility report completed earlier this month contained no carve-outs, although Japanese officials said later that the Australians had promised to "respond flexibly" to agricultural concerns.

"We want the negotiations to begin with all issues on the table, it’s possible they won’t be there at the end, though we’d like them to be," Mr Truss said in Tokyo yesterday. "But we certainly should not rule out whole sections of the trading relationship before the negotiations even begin. Any eventual FTA will need to make political as well as economic sense in both countries."

Australian negotiators will still face strong resistance to lowering protective tariffs in key commodity exports - beef, wheat, dairy products and rice.

More even than in other Asian countries, rice-growing has a strong cultural and social significance in Japan and most observers think it unlikely the FTA negotiations will manage to breach the 780 per cent tariff.

Australian wheat faces a 250 per cent tariff, although the Japanese need to import 95 per cent of grain requirements. From early next year they will face soaring world prices and the possibility of supply shortages because of the failure of the eastern Australian winter crop under drought.

Mr Truss said he hoped carry-over wheat stocks would allow Australia to honour its major overseas contracts, but warned that worldwide there was little surplus grain and intensifying demand, particularly from India.

Australian Rice Growers Association president Laurie Arthur said he expected the FTA to include "full access" to the Japanese market.

National Farmers Federation CEO Ben Fargher would support FTA negotiations with Japan "only on the basis that they are comprehensive and ambitious in regard to agriculture".

 source: The Australian