On April 8 2014, after seven years of negotiations, Tony Abbott and his counterpart in Japan, Shinzo Abe, agree the major points of a free trade agreement between the two countries.
"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," Abbott noted at the time.
Abe added that Australia is a "strategic partner" that shares "universal values" with Japan. "In today's meeting, I have confirmed with Mr Abbott that we will elevate this strong bilateral relationship between our two countries to a new special relationship, so that we can work on forging an even stronger partnership together.”
The Japan Australia Economic Partnership Agreement (JAEPA) came into force on January 15 2015, and has been welcomed by the Australian Food and Grocery Council (AFGC). Read its synopsis here: JAEPA: AUSTRALIAN GOVERNMENT FAQS
AFGC chief executive officer, Gary Dawson, said that this agreement with Japan, and similar agreements with Korea and China, are vital steps in cementing Australia’s position as a premium food exporter.
Australia's three leading North Asian trade partners, China, Japan and Korea, account for more than 50% of our exports.
“This deal is a great example of Australia playing to its strengths in international trade to secure maximum value for high value-add exports as well as commodities,” Dawson commented.
"It will accelerate the growth of Australian food and grocery exports into Japan to meet unprecedented demand from Japanese consumers who value Australia's high quality production. Valued at 3.1 billion in 2012-13, Japan has been Australia's largest export market for processed food and beverage products and improved market access into the region is vital for the continued growth of Australia's food and grocery sector. This agreement will support Australia’s continued food exports to Japan as consumer preferences change, particularly given the aging population.”
“Japan is Australia’s third largest investor, with an investor stock of $126.4 billion, and recently this investment has extended to sectors including food and agribusiness,” Dawson added.
The Australian government also commented, “JAEPA sends a clear message to Japanese investors that Australia is an attractive investment destination. It will promote further growth and diversification in the flow of Japanese investment into Australia by raising the screening threshold, at which private Japanese investment in non-sensitive sectors is considered by the Foreign Investment Review Board, from $248 million to $1,078 million.”
“Australia’s global competitiveness will be greatly enhanced if this FTA leads to an acceleration of investment in strategic sectors such as food and agribusiness,” Dawson stated.
JAEPA provides two quick tariff reductions for Australian products exported to Japan: the first cut occurring on January 15, and a second round of cuts on 1 April 2015.
“The combination of reducing tariffs and a lower exchange rate should encourage current and new exporters to closely examine the commercial opportunities in Japan,” Dawson concluded.
