Lyons MHR Eric Hutchinson was honoured to be present during the address from the Japanese Prime Minister, His Excellency Mr Shinzo Abe today at Parliament House in Canberra.
Prime Minister Abe and Prime Minister Abbott have today signed the Japan-Australia Economic Partnership Agreement, an agreement to liberalise trade between Australia and Japan and the first free trade agreement that Japan has made with a major developed economy and agricultural exporter.
When fully implemented in excess of 97% of Australian exports will be able to enter Japan either duty free or with preferential access when compared to our major competitors. In addition to agricultural products, other services where Australia has an enviable reputation are also supported by this agreement.
Legal firms will be able to set up corporations under Japanese law.
Financial service providers will be able to offer investment advice and portfolio management services.
Australian education providers will have access to the Japanese higher education services market including vocational and technical education.
Australian suppliers will be able to tender for Japanese Government procurement contracts as a result of this agreement.
Japan is Australia’s second-largest agricultural market, worth around $4 billion in 2013. It is Australia’s largest market for beef, cheese and animal feed and an important destination for seafood and horticulture.
The Japan-Australia Economic Partnership Agreement (JAEPA) will deliver significant benefits and opportunities to Australian farmers and agricultural producers in a highly valuable but protected market.
From Tasmania’s perspective JAEPA will give Australia immediate tariff cuts on beef that will grow and protect this important market. This includes:
• For fresh beef, the tariff facing Australia will fall from 38.5% to 32.5% on day one, giving an immediate competitive advantage, and then phase to 23.5% over 15 years.
• Australia (unlike any other country) will never again be subjected to the automatic 50% ‘global snapback’ tariff.
• The starting triggers are set well above current trade levels (14.5% above 2013 exports for frozen beef and 12% above 2013 exports for fresh beef) and rise each year for ten years before being reviewed.
• A review will be triggered immediately if Japan provides one of our competitors a better deal on beef, aimed at providing Australia equivalent treatment.
Japan is Australia’s most important dairy market, and Australia is Japan’s largest supplier. Australian dairy exports to Japan were valued at $452 million in 2013, including $372 million of cheese which tariffs up to 29.8%. JAEPA outcomes include:
• Immediate Australia-only duty-free quotas for:
o Natural cheese for processing (Australia’s largest dairy export) growing from 4,000 tonnes to 20,000 tonnes over 20 years (Australia will also continue to have access to Japan’s global quota for cheese under which around 30% of Australia’s cheese already enters duty-free);
• Immediate elimination of tariffs of up to 8.5% on casein, lactose, albumen and milk protein concentrates with trade with $53 million in 2013.
Australia’s seafood exports to Japan were worth an estimated $200 million in 2013. JAEPA outcomes include:
• Immediate elimination of tariffs up to 9.6% on lobsters, shrimps and prawns, abalone (fresh or preserved), oysters, crabs, fresh sea urchins, fish oils and some fish; and
• Tariffs on tuna, fresh or chilled swordfish, fresh marlin, and Atlantic salmon will be eliminated over ten years.
The JAEPA will provide a very liberalising outcome across horticulture resulting in quick tariff elimination in the vast majority of Australian exports. Outcomes include:
• Immediate elimination of tariffs on asparagus (our largest vegetable export worth $13.5 million in 2013, carrots, potatoes, truffles and many other vegetables.
• Immediate elimination of tariffs on mangoes, dried grapes and a range of berries.
• Elimination of tariffs up to 10% for grapefruit, pears, apricots, peaches and plums over five years and elimination of the 17.5% tariff on apples over ten years.
Australian wine exports to Japan currently faces a tariff of 15% or for some products fixed tariffs of up to 182 yen per litre. Beer already enters Japan duty-free. JAEPA outcomes include:
• Tariffs on Australian bottled and sparkling wine will be eliminated over seven years.
• Tariffs on fortified wine, cider, Perry and mead will be eliminated over five years.
‘Genuine passion and commitment that the Japanese have for Australia was evident in Prime Minister Abe’s speech,’ Mr Hutchinson said.
Mr Hutchinson believes that the JAPEA presents a real opportunity, reinvigorating a long standing relationship where great things can be achieved between two countries shat share the same values of trade, rule of law and peace in the region.
Lyons MHR Eric Hutchinson
