Preferential access and reduced – or eliminated
– tariffs are the key element of the new Japan-Australia
Economic Partnership Agreement.
Japan is Australia's second largest trading partner. In 2013
Australia's two-way goods and services trade with Japan
totalled $70.8 billion ($66.5 billion trade in goods and $4.3
billion trade in services).
On 8 July 2014 the Prime Ministers of Japan and Australia signed
the Japan-Australia Economic Partnership Agreement (JAEPA) and its
implementing agreement. The intention behind JAEPA is to facilitate
improved access to the Japanese market for Australian enterprise
through a range of preferential access outcomes and the elimination
or reduction of certain tariffs and duties. The JAEPA will also
remove all remaining Australian tariffs on Japanese imports.
What does this mean for Australian exporters?
The finalisation of the JAEPA offers substantial benefits to
Australian exporters with current supply chains into the Japanese
market, or those looking to establish trade with Japanese
It's estimated that, upon full implementation of JAEPA, up
to 97 percent of Australia's exports to Japan will enter
duty-free or will receive preferential access.
A snapshot of key outcomes of JAEPA that benefit Australian
exporters upon its entry into force are set out below.
Significant Tariff reductions for beef;
Elimination of the 15 percent tariff on bottled
wine over seven years, and the immediate elimination of
the tariff on bulk wine;
Duty-free quotas for Australian cheese;
Tariff elimination on the vast majority of Australia's
nuts and juice as well as
lobsters, crustaceans and
10-year phase-out plan for exports of Tuna and Atlantic
Duty-free and quota-free access for wheat for
feed and barley for
feed supplemented by streamlined export
arrangements for some Australian wheat varieties;
Tariff elimination and reduced levies for high polarity
(international standard) raw sugar.
Resource and manufacturing exporters
Elimination of tariffs on entry into force for coke and
semi coke of coal, non-crude petroleum
oils, aluminium hydroxide and titanium
Elimination of tariffs for unwrought nickel and
Australian service providers
Guaranteed cross-border access to Japan for Australian
financial service providers when providing
investment advice and portfolio management services.
Improved access to the Japanese legal services market for
Australian law firms.
Guaranteed market access for Australian education
providers to Japan's higher education services market,
including vocational and technical education.
Commitments on non-discriminatory treatment, regulatory
transparency, competitive safeguards and fair and reasonable access
to telecommunications networks and services.
High levels of intellectual property
protection in Japan broadly equivalent to protections provided in
What does this mean for importers of Japanese goods?
Australian importers of Japanese goods will benefit from JAEPA.
Upon implementation, Australian tariffs on Japanese imports
including for Japanese motor vehicles, electronics and white goods
will be eliminated.
JAEPA also aims to promote growth in Japanese in-bound
investment by amending the threshold at which private Japanese
investment in non-sensitive sectors can be made before such
investment has to be considered by the Foreign Investment Review
To become operational, JAEPA will need domestic approval in both
Australia and Japan.
Australia and Japan are aiming to complete their domestic treaty
processes this year. Once this occurs, both countries will exchange
Diplomatic Notes to certify they are ready for the entry into force
of the Agreement. JAEPA will enter into force 30 days after the
exchange of notes.
Australian businesses should consider the impact of the JAEPA in
their industry and how they can benefit from the improved
reciprocal market access it seeks to achieve.
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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