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Japan dictates the pace of trade talks with Canberra

The Age, Melbourne

Japan dictates the pace of trade talks with Canberra

By Tim Colebatch, Canberra

3 May 2008

Australia’s free trade talks with Japan are moving forward on Japanese lines.

Four days of talks in Canberra have ended with promising offers on services and investment, and progress in all areas - except agriculture.

Australian negotiators said the talks, the fifth negotiating round so far, were "on the whole, positive and useful".

The main development was "good-quality" offers by each side to create more open access for the other’s services exports, and to lower barriers to foreign investment.

"We were pleased with Japan’s offer," a senior official said. "It is a good starting point for negotiations on services and investment."

But while there was "progress in all other areas", he said there was none in agriculture - still the main stumbling block to a deal.

Japanese negotiators spent two days rejecting every Australian request to remove a long list of barriers to imports of beef and dairy produce, declaring that these were politically sensitive issues that could not be changed.

The next round of talks, in Tokyo in July, will focus on sugar, wheat and barley. But the Japanese parliament in 2006 passed a resolution opposing any liberalisation of beef, dairy, sugar, grains or rice markets as part of a free trade agreement with Australia.

Japan’s Trade Minister, Akira Amari, warned last year that "sensitive issues" would be left out of any FTA. "The areas that have to be protected will be protected," he said.

Japan agreed to the negotiations only after Australia allowed the US to exempt politically sensitive areas such as sugar, shipbuilding and, effectively, textiles, from the Australia-US FTA.

Japan has made it clear that any Australia-Japan FTA must have similar exemptions. Australia has also run into a brick wall on agriculture in its negotiations for an FTA with China.

Trade Minister Simon Crean yesterday flew to Bali to try to begin another stalled FTA negotiation, with the 10 countries of the Association of South-East Asian Nations, at a meeting of trade ministers this weekend.

Mr Crean will also discuss the fragile signs of progress in the Doha Round trade negotiations with US Trade Representative Susan Schwab and India’s Commerce Minister, Kamal Nath. Speculation that key ministers could meet this month to hammer out a Doha Round deal now appears premature.