logo logo

Australia, Japan close to signing FTA

Japan Daily Press | April 18, 2013

Australia, Japan close to signing FTA

by John Hofilena

Australia’s Department of Foreign Affairs and Trade revealed on Wednesday that the country is very close to finally formalizing a free trade agreement with Japan. The Asian country is Australia’s second largest trading partner, and both parties have been targeting to finish the deal before Japan formally joins the US-led Trans-Pacific Partnership (TPP).

Progress on the deal has been slow because of Japan’s desire to protect an agricultural sector that has a very strong lobby at home. But as an agreement has been fleshed out and Japan finally agreeing on terms regarding access to their farm products, the deal is now probably close to completion. Originally, Australia had pushed strongly for the abolishment of all tariffs, but that became the cause of slow progress, and so a compromise had to be reached. The new agreement is based on Japan retaining tariffs on farm goods, provided that it accepts at low customs duties a specified quantity of the same goods from Australia. Specifically, the agreement specifies that the two countries would apply low tariffs for Australian beef – Australia’s biggest and most profitable farm import – and dairy exports into Japan based on a specific quota. On the hand, Australia wants to keep that five per cent tariff it imposes on Japanese cars, which is worth $940 million a year.

Australian trade ministry officials said on Wednesday that the text of the FTA is very close to being complete, provided that some issues around final market access are resolved. “The government is working hard to conclude a FTA as soon as possible, and negotiations are at an advanced stage,’’ a spokesperson said. This FTA with Japan would be very profitable for Australia, worth upwards of $71 billion a year. The farm produce agreement was a compromise for Australia as it looked to looking to increase farm exports into Japan as much as possible before Japan entered into the bigger trade environment of the TPP.

 source: Japan Daily Press