The Australian

Japan stance threatens free trade

Peter Alford, Tokyo correspondent | March 01, 2008

THE Japanese Government has refused to offer Australia any serious concessions on agricultural import tariffs, the major barrier to a free trade agreement between the two countries.

This stance could jeopardise the FTA negotiation, which started in early 2007 on the basis that Japan and Australia would seek a comprehensive agreement that extended to agricultural market access, the most sensitive aspect from Tokyo’s viewpoint.

Australian officials left Tokyo after four days of FTA talks describing the Japanese stance on agriculture as "very disappointing". Japanese negotiators told the Australians their Government had not wavered from its position that existing levels of protection on beef, dairy products, wheat, rice and sugar should stand and they also wanted further exclusions — items on which there would be no offer of a tariff reduction.

The five named commodities account for more than 80 per cent of Australia’s farm trade with Japan and, from the outset when then prime ministers John Howard and Shinzo Abe agreed to launch the negotiation in late 2006, the Japanese were told an FTA without serious concessions on those items would be politically untenable in Australia.

Trade Minister Simon Crean reiterated in Tokyo last month that the new Australian Government expected a "comprehensive outcome" to include agricultural tariff concessions and that all food exports should be on the table for negotiation.

Mr Abe’s cabinet withstood a fierce, short rebellion by the Liberal Democratic Party’s rural rump seeking to prevent agricultural protection even being negotiated in the FTA talks. But since suffering serious electoral losses last July and losing Mr Abe soon afterwards, Yasuo Fukuda’s Government appears to have given ground to the farm lobby.

On Monday, Toshiro Shirasu, the top bureaucrat in the powerful and strongly protectionist Ministry for Agriculture, Forestry and Fisheries, said Japan wanted wheat, rice, sugar, beef and dairy off the negotiating table.

Japan, which is unable to supply more than 40 per cent of its own food requirements, imposes a 38 per cent tariff on Australian beef, more than 200 per cent on wheat, about 770 per cent on rice and 218 per cent on butter.