Significant Australia-Japan trade deal soon to enter into force
17 December 2014
Agriculture Minister, Barnaby Joyce, has commended the pending early entry into force of the Japan-Australia Economic Partnership Agreement (JAEPA). This follows the exchange of diplomatic notes yesterday enabling commencement of the agreement between Australia and Japan from 15 January 2015.
Minister Joyce said a sustained and effective focus on opening up trade and new market opportunities was a trademark of the current government.
“Japan is our second largest agricultural export market, worth around $4 billion per annum. This agreement is one of three significant trade deals we’ve negotiated recently that will benefit agricultural producers,” Minister Joyce said.
“The Japan – Australia Economic Partnership Agreement (JAEPA) will eliminate or reduce tariff rates on many key agricultural products destined for Japan - including beef, sheep meat, livestock, dairy, seafood, wine and horticulture. This will translate into higher returns at the farmgate for Australia’s agricultural exporters.“
Minister Joyce acknowledged that certain industries had been disappointed at the outcomes on some products, but pointed out that on balance Australian agriculture would gain considerable improved market access from the agreement. Minister Joyce also noted however that a review clause in the agreement provides for further agricultural market access within five years or sooner if one of our competitors gets better access.
A notable benefit of this deal was the improved access for Australia’s largest export to Japan of frozen and chilled beef, worth $1.4 billion in 2013-14, which currently faced a tariff of 38.5 per cent. This would reduce to 19.5 per cent and 23.5 per cent respectively over 18 and 15 years—and with larger tariff cuts on entry into force, will provide the beef industry with an early advantage against key competitors such as the US.
Australia’s exports of feed barley, worth $236 million in 2013-14, would benefit from the elimination of the 39yen/kg out-of-quota tariff from the agreement’s entry into force.
Tariffs of up to nearly 10 per cent on many seafood products would be eliminated on entry into force (including abalone and rock lobster), with Japan a major market for Australian seafood exports, worth $219 million in 2013-14.
Tariffs on a range of key horticulture exports to Japan would also be eliminated from the start of the agreement, including for asparagus, mangoes, macadamia and other nuts. Tariffs on most wine exports, valued at $42 million in 2013-14, will also be eliminated over seven years, providing improved competitiveness against other major wine exporters such as the EU, US and Chile.
“Reduced tariff rates will save our exporters import costs and will give them an advantage over international competitors,” Minister Joyce said.
“Exporters will receive two tariff cuts in quick succession – the first on entry into force on 15 January, and a second on 1 April 2015 – accelerating our competitive position in the market.”
The agreement includes quota arrangements* for some products that will be managed by the Australian Government including bovine offal, pork, honey, poultry, apple and orange juice, and two types of preserved meats.
For more information, please see: agriculture.gov.au/market-access-trade/fta.
*Note: Exporters of eligible quota products can find more information and apply at agriculture.gov.au/japanquotas.