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Goodwill with Japan on FTA

The Australian

Goodwill with Japan on FTA

20 March 2009

AAP. Japanese demand for Australian commodities may be waning, but the Rudd Government insists there is still the political will for Tokyo and Canberra to find common ground on free trade.

When negotiations for a free trade agreement began in 2006, a high priority for Japan was ensuring a secure supply of resources, such as coal and iron ore.

It was the first FTA Japan had agreed to with a developed nation — and was symbolic of the strength of relations between the two countries.

Supplies of iron ore and coal were tight, prices were high and the booming Chinese economy had an insatiable appetite for these in-demand goods.

Three years on — and with the globe in the grip of recession — those conditions have changed.

But Foreign Minister Stephen Smith does not believe the changing circumstances means the political will for a deal has evaporated.

"The important thing is, I think, is there political will ... it certainly exists in Australia’s case and in my view it certainly exists in Japan’s case," he said.

The minister called for a recommitment to completing a "high-quality FTA" within a reasonable time frame, saying it would bring economic advantages for both countries.

"(And) it will send (a signal) to the rest of the world in these difficult economic times," Mr Smith told the inaugural Nishi-Crawford lecture on Wednesday night. "There are, of course, sensitivities that need to be carefully addressed, but there is abundant scope to liberalise key areas."

Mr Smith would not say what time frame the Government was looking for to strike a deal, except he preferred "sooner rather than later".

"In the end we would rather have an agreement over a longer period of time than not have an agreement," he said.

Earlier this month, the eighth round of negotiations were held in Tokyo. Negotiators exchanged initial offers and requests on services and investment but goods and agricultural market access remained a sticking point.

The next round of talks is scheduled for July.