Japanese officials say free trade deal with Australia should be signed by July: experts tip agriculture will win big

Australia’s peak export body has welcomed news of an impending free trade agreement with Japan.

Ian Murray, chairman of the Australian Institute of Export, tells SmartCompany it’s “about time”.

“The sooner it’s signed the better,” he says.

His comments come after a report in The Australianthis morning which featured interviews with several key Japanese policy-makers saying the deal was almost done, and will hopefully be signed in July when Japanese Prime Minister Shinzo Abe travels to Australia, and after Australian PM Tony Abbott travels to Tokyo in April.

The main sector to benefit from the deal will be Australia’s agricultural producers and food manufacturers, says Cynthia Dearin, a former DFAT diplomat who is now managing director of export consultancy Dearin & Associates.

“This deal is very, very significant,” she tells SmartCompany. Japan is Australia’s second largest export market and also a source of imports to Australia.

“What this deal gives us is the opportunity to expand that trade further and ensure it’s a better deal for Australian exporters. The agricultural sector in particular stands to do very well.”

Japan is highly protective of its agricultural sector, Dearin explains, and Australian exporters currently pay very high tariffs to be sold in Japan. Given the significant resistance in Japan to liberalising trade on things like beef and rice, she expects Australian negotiators will have to offer reduced or eliminated vehicle tariffs in order to secure any movement.

“It’ll have to be a give and take scenario,” she says.

Murray says that even if the deal results in reduced tariffs on Japanese cars, current tariffs of 5% are not very high anyway.

“One hopes that despite the free trade agreement, Toyota continues to manufacture Camrys in Australia. But that decision isn’t just about tariffs – there’s a whole lot of considerations that go into that.”

And, Murray points out, it’s not just farmers who stand to benefit “enormously” from the deal.

“We have to remember processed food,” he says. “Things like asparagus, for example. There’s all these high-value food that Australia produces and packages well, and that have a clean-green image. We need to be in a position to take these to Japan and compete with countries like Chile and the United States.

“And there’ll be other sectors that benefit as well, including technology and services.”

The Abbott government has made progress on several free trade agreements since coming into office, including signing a FTA with South Korea in December.

Murray says it’s great to see so much movement, and calls for the government to finish negotiations on the FTA with China, in negotiation since 2005, and the multinational Tran-Pacific Partnership.

To fully realise the benefits of any such agreement, however, he says small businesses need to be made aware of the new opportunities that exist. “Getting the message out there is as important as getting it signed,” Murray says. “Unless companies know about it, they won’t get the benefits.”


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