The AFR is reporting today that the Abbott Government has taken a hard line in free trade agreement (FTA) negotiations with Japan, refusing to sign a deal unless there are significant concessions on agriculture, specifically in the areas of beef and dairy (rice has already been excluded from any deal):
With Japan still holding out on Australian access to beef and dairy, Mr Robb said Australia would not sign up to any free trade deal unless there were material concessions from Tokyo…
Presently, Japan imposes a 38.5 per cent tariff on Australian beef. Australia wants that tariff halved to below 20 per cent… The Japanese have so far offered a level between 25 per cent and 30 per cent.
Dairy products, predominantly cheese, are one of Australia’s biggest agricultural exports to Japan.
But Japan’s industry is heavily regulated, with a complex web of domestic laws and quotas.
Outside very limited concessions, Japan has effectively excluded dairy from its trade deals…
[Robb] stressed the government was not going to sign up to anything that doesn’t deliver “some very material gains”.
It is good to see the Government taking a firmer approach, given earlier reports suggested that it could accept a sub-standard deal, as happened with the Australia-US FTA.
Even so, with substantive carve-outs of agriculture still likely, along with other costs typically associated with bilateral FTAs, any Australia-Japan FTA is likely to offer at best only modest trade benefits to Australia, and looks to be mainly political in nature rather than economic.
