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Tony Abbott with his Japanese counterpart Shinzo Abe
Tony Abbott with his Japanese counterpart Shinzo Abe. Photograph: Reuters Photograph: Reuters
Tony Abbott with his Japanese counterpart Shinzo Abe. Photograph: Reuters Photograph: Reuters

Tony Abbott: free trade deal reflects shared values of Japan and Australia

This article is more than 9 years old

Prime minister says agreement's economic benefits cement shared commitment to 'democracy, freedom and the rule of law'

Tony Abbott has hailed the completion of a new free trade deal with Japan as “a marvellous and historic day” that will deliver specific economic benefits and closer diplomatic relations between two nations with shared values.

In a press conference on Monday night in Tokyo to mark the conclusion of seven years of bilateral trade negotiations, the Australian prime minister declared this was the first time Japan had “negotiated a comprehensive economic partnership agreement or free trade agreement with a major economy, particularly a major economy with a strong agricultural sector”.

The agreement finalised over the past 48 hours will reduce the tariffs on Australian beef imports to Japan from the current 38.5% to 19.5% (for frozen meat) and 23.5% (fresh meat).

The reduction is a concession from the Japanese, who are fierce protectors of their agricultural sector, but the tariff cut for fresh meat is due to take effect over a very long time frame – 15 years.

Going into the final stretch of the talks, Australian farm groups, such as the National Farmers Federation (NFF), warned they wanted to see the punitive Japanese beef tariff reduced to zero. The NFF on Monday urged the government to cut a good deal or walk away. Australian beef exports to Japan were worth $1.4bn in 2013.

Trade minister Andrew Robb said the new pact would also deliver beneficial quotas for Australian dairy and cheese. In a statement released on Monday night the government said the deal would provide “significant new duty-free access” for Australian dairy products.

The statement said immediate tariff reductions would also apply to Australian horticultural products. “The tariffs on canned products such as tomatoes, peaches and pears, as well as fruit and vegetable juices, will also be eliminated,” the statement said.

The agreement also raises the screening threshold at which private Japanese investment in non-sensitive sectors is considered by Australia's Foreign Investment Review Board from $248m to $1.078bn.

"Australia has reserved policy space to screen proposals for investment in agricultural land and agribusinesses at lower levels," the FTA document says.

Australia for its part will remove the 5% tariff on Japanese cars and manufactured items, improving market access for Japanese goods and making them cheaper for Australian consumers.

Abbott made much on Monday night of the history of trade ties between Australia and Japan, and of the shared values between the two countries.

“We have a deep, shared commitment to the universal aspirations of democracy, freedom and the rule of law,” the prime minister said at the Tokyo press conference.

“And the relationship between Australia and Japan is about much more than economics and trade and growing wealthy together. It’s about respect, it’s about values. I hope that 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,” he said.

Abbott had made an election pledge to achieve free trade deals with key regional partners within 12 months of taking office. John Howard first kicked off the negotiations with Tokyo in 2007 – his final year in office.

The talks have been painstakingly slow, largely because Japan is such an implacable protector of its agricultural sector. Before the planned withdrawal of Australia’s remaining car manufacturers, Holden and Toyota, who will quit Australia in 2017 – a development that followed the election of the Abbott government last year – Australian governments had also been conscious of the need to provide some protection for local manufacturing.

Labor welcomed the conclusion of the agreement, but said it would be scrutinising the details closely.

The opposition said it would be concerned if the deal contained “investor state dispute settlement provisions” – provisions that potentially allow Japanese firms to take the Australian government to court, and which are controversial with free trade opponents.

Labor's trade and investment spokeswoman, Penny Wong, said on Monday night Australian beef and dairy were already strong exports to Japan and improvements in market access would be an important boost for agricultural industries.

“However, Labor notes reports that the Abbott government has agreed to tariffs which appear less beneficial than those secured for Australian beef in the recent free trade agreement with Korea,” she said.

Wong said a critical issue would be the extent to which the FTA document tackled the non-tariff barriers applying to Australian exports to Japan – such as quotas, statutory import licensing and marketing arrangements and subsidies.

“A genuinely comprehensive trade agreement needs to go beyond the focus on cows and cars by covering a wide range of goods and services as well as trade rules and mechanisms,” Wong said.

More on this story

More on this story

  • How Tony Abbott can improve his relationship with the rest of the world

  • Australian free trade agreement with Japan will end tariffs on car imports

  • Australia-Japan free trade deal is 'within our grasp', Tony Abbott says

  • Free-trade deal with Japan not a certainty, says Tony Abbott

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