Agriculture to capitalize on tariff cuts under Japan free trade deal

886
Image credit: flickr User: inu-photo

Japan will increase access to Australian beef and dairy imports under the terms of what was the first free trade deal Japan has made with a major exporting nation.

Image credit: flickr User: inu-photo
Image credit: flickr User: inu-photo

According to the article on ABC, Japan is Australia’s second biggest export market for beef and dairy products, and the country’s second-largest trading partner overall.

Beef and dairy were the major stumbling blocks for sealing the deal, as Japan insisted on protecting its local produce.

The terms of the agreement will see Japan halve the current 38.5% tariff on frozen Australian beef products over the course of the next 18 years, with an immediate tariff cut of up to 8% in the first year of the agreement, whereas Chilled beef tariffs will be reduced slightly less over the next 15 years, with immediate 6% cut in the first year.

This agreement with Australia marks the first made between Japan and a beef exporting nation, to reduce tariffs.

Adertisement

The agreement also substantially increases the amount of duty-free cheese that Australia can export to Japan, by 20,000 tonnes per year.

The agreement will bring tariffs at zero for commodities such as wool, cotton, lamb and beer, while tariffs on bottled, sparkling and bulk wine will be eliminated over the next seven years.

Japanese Prime Minister Shinzo Abe said he was very happy to have reached substantive agreement on freer trade with Australia.

“We intend to proceed with work to sign the agreement as early as possible,” Mr Abe said.

His Australian counterpart, Prime Minister Tony Abbott, branded the agreement as “historic and significant”.

“This is the first time that Japan has negotiated a comprehensive economic partnership agreement or free trade agreement with a major economy, particularly a major economy with a strong agricultural sector,” Mr Abbott said.

“I hope, thanks to this agreement that has been finalised today, that Australia can be pivotal to ensuring that in the years and decades to come, the people of Japan have energy security, resource security, and food security. This will be good for Australia, good for Japan, good for our region and good for the world.”

President of the Cattle Council of Australia, Andrew Ogilvie, however, was less enthusiastic about the agreement, saying that while he welcomes the deal, the fact that tariffs on Australian beef will remain into the future is disappointing.

“Cattle Council is disappointed that substantial tariffs still exist on Australian beef after the phase-out period, unlike in previous free trade agreements, and also that different tariffs apply to chilled and frozen beef,” Mr Ogilvie said.

“Cattle Council understands the Australian Government achieved the best result that it could for the Australian beef industry, particularly as this is the first deal Japan has done with a major agricultural exporter.”

He said he was hopeful the agreement will lead to further trade liberalisation with Japan into the future, especially for beef.

“Cattle Council will work to continue building relationships with Japanese beef producers in the coming months,” he said.