Most Read Contributor in Australia, September 2016
After lengthy governmental negotiations concluded last year, the
Japan-Australia Economic Partnership Agreement
(JAEPA) was signed-off by Japanese Prime Minister
Shinzo Abe and has now come into force. This Partnership is set to
eliminate or reduce tariff rates on many of our key agricultural
products destined for Japan, with the first round running from 12
January 2015 until 31 March 2015, and further tariff cuts set to
take place annually on 1 April.
Similar to the back-to-back tariff cuts provided by the
Korea-Australia Free Trade Agreement, the JAEPA is expected to
deliver immediate benefits for exporters and significantly enhance
their competitive position in the Japanese market –
particularly against the US, whose farmers will continue to face
higher tariff rates.
With Japan being the world's third-largest economy and
Australia's second-largest trading partner, accounting for 11%
of our total trade and 16% of our exports, a wide range of
agribusinesses are set to benefit from the JAEPA.
Minister for Agriculture, Barnaby Joyce said "tariffs are
notably reduced or eliminated on beef, livestock, dairy, seafood,
wine and horticulture". Under the Agreement, beef tariffs will
be halved and lamb tariffs will be bound at zero, alongside
commodities such as tuna and rock lobster.
Significant improvements will also be seen in market access,
giving preference to pork and seafood, as well as through a number
of new Australia-only quotas with lower tariffs such as dairy
products and honey. The opportunities will then be expected to
expand across a range of industries, including agriculture and
processed foods, resources, manufacturing and services.
With exports to Japan worth $1.4 billion last year, Australian
beef will be a major beneficiary of the JAEPA. Through heavy
front-end loading, beef exporters have seen an immediate drop from
38.5% to 30.5% on the frozen beef tariff, which will be followed by
a further 2% cut annually on 1 April over the next 15 years.
For chilled and fresh Australian beef exports into Japan, the
tariff rate has dropped from 38% to 32.5%, which will also be
followed by another 1% cut annually on 1 April right through until
For the beef industry alone, the JAEPA will allow for a
reduction in tariffs of over $19 million between now and 31 March
The JAEPA sends a clear message to Japanese investors that
Australia is an attractive investment destination. NAB general
manager, Japan, Kohei Tsushima said that he "expects more
Japanese companies to invest in upstream agribusiness in
Australia" as a result of the JAEPA.
Australian businesses will be able to build strong relationships
with Japanese investors and maintain a consistent strategy. This
partnership also paves the way for greater trade reform with Japan
via the Trans-Pacific Partnership and Regional Comprehensive
Economic Partnership negotiations.
JAEPA is the second of 3 trade agreements concluded by the
Australian Government in the past year, suggesting that the
Government is committed to providing Australian agriculture with
increased trade opportunities.
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The TPP could have a significant positive impact on the investment and financial services of Australia and Singapore.
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