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Japan and Australia nearing FTA deal: Reports

AFP | 28 Jan 2014

Japan and Australia nearing FTA deal: Reports

SYDNEY: Japan and Australia are moving closer to signing a free trade agreement, officials said Tuesday amid reports the deal will be inked within months.

If realised, the deal would cement a relationship worth around $58 billion annually in two-way trade, and bolster ties at a time when many in the region are nervously eyeing the rise of China and its growing economic power.

"The Australian government is working hard to conclude (a free trade agreement) with Japan as soon as possible," a spokesperson for Australia’s Department of Foreign Affairs and Trade told AFP.

"We are pleased Japan is also strongly committed to concluding a mutually beneficial deal."

Media in both countries said the trading partners are looking to finalise the pact within six months.

Australian Prime Minister Tony Abbott is expected to travel to Tokyo in April, when he will underline the importance of building closer security links with the country he has described as Australia’s "best friend in Asia", The Australian newspaper said Tuesday.

Ink will be put to paper in July when Japanese Prime Minister Shinzo Abe visits Canberra and becomes the first Japanese leader to address the Australian parliament, the daily said.

The planned agreement is likely to be at least as comprehensive as the one Australia struck last month with South Korea, but with rice and wheat exports as possible carve-outs, the paper said.

The influential Nikkei business daily in Japan said Monday that Tokyo was preparing to propose the reduction of tariffs on Australian beef imports from 38.5 percent to about 30.0 percent in a bid to speed up the negotiations.

In exchange, Japan will demand Australia axe its five-percent tariffs on auto imports, in line with its pact with South Korea, the Nikkei said.

At a meeting in the Swiss resort of Davos last week, Abe told Abbott: "I wish to further enhance the strategic partnership between Japan and Australia and bring it up to another level," Jiji Press said.

Australia enjoys a significant trade surplus with Japan thanks to strong Japanese demand for natural resources.

Half of Japanese exports to Australia are automobiles, while Australian exports to Japan mainly consist of minerals and energy, such as coal, gas and iron ore.

But Japanese farmers are wary of a free trade deal with Australia, saying cheap imports could destroy Japanese agriculture.

However, Yasunori Nakayama, a lead Japanese negotiator in the free trade talks, told The Australian that the FTA’s importance "surpasses mere economic values" and would "further cement the basis of our partnership".

Abe, who came to power more than a year ago, has rushed to forge closer ties with Southeast Asia as well as energy-rich Australia, Africa and Russia to try to pull Japan out of two decades of slow growth.

He is also looking to shore up relationships in part as a counterweight to China’s growing clout, at a time when the two countries are at loggerheads over history and the sovereignty of an island chain.

Nakayama told The Australian that the negotiations were talking place "in parallel" to the US-led Trans Pacific Partnership (TPP) talks, which aim to strike a trade deal among 12 Pacific nations.

 source: AFP