The prospects seem promising considering Japan has served as Australia’s largest trade partner for the past four decades, and the third largest foreign investor in Australia.The Japan-Australia Economic Partnership Agreement (JAEPA) won’t ensure free trade, but will secure the significant decline in tariffs on Australian exports.
Business Council of Australia President Catherine Livingstone (pictured) says the agreement will work to strengthen the existing bilateral relationship between the countries.“Japan has long been a significant source of the capital and markets needed to develop key Australian export industries, including coal, iron ore and LNG, and the highly complementary nature of our economic relationship should provide significant gains for both sides.”
Australian agribusiness will be the key beneficiary of JAEPA, a boon for Queensland, as tariffs on beef and dairy exports will drop to make Australia the first major agricultural exporter to conclude such an agreement with Japan.According to a Government media release yesterday, Australian beef is the biggest agricultural export to Japan at $1.4 billion.
The market is set to grow as the tariff on frozen beef is incrementally halved from 38.5 per cent to 19.5 per cent, beginning this year.In addition to this, JAEPA will advantage service providers and investors, and Australian consumers facing the prospect of cheaper cars, household goods and electronic products following a significant decline and potentially ultimate removal on tariffs for most of these items.
Meanwhile, the agreement will provide the Japanese with greater investment opportunities in Australia, and greater food and energy security.Livingstone says government and business must swiftly go ahead with its implementation to ensure industries and consumers benefit from the market swelling the agreement brings.
“The sooner the deal comes into force, the quicker the benefits will flow to consumers, businesses and the broader community, and the earlier the agreement will support higher levels of job creation.”Australian Industry Group Chief Executive Innes Wilcox says while agribusiness will benefit significantly from JAEPA, the agreement may have adverse impacts for businesses supplying domestic markets due to removing tariffs on Japanese imports.
Where Livingstone says a swift implementation is required, Wilcox says a careful implementation of the agreement on the Government’s behalf is also necessary.“The capacity of these businesses to adapt will depend on the Government’s approach to policies aimed at improving Australia’s innovation efforts, building business capabilities and developing workforce skills.”
Trade Minister Andrew Robb sealed the agreement over the weekend, which Prime Minister Tony Abbott has named the biggest event in Japan-Australia relations since the 1957 economic partnership between the two countries.JAEPA has been a long time coming, with the Howard government getting the ball rolling in 2007 and Labor continuing its pursuit thereafter.
Despite being a milestone, Livingstone says the government should remain forward-thinking and now turn its focus to attaining a similar agreement with China.China was labelled as the key target market for Australian businesses over the next two years in Australia’s International Business Survey 2014, the most comprehensive snapshot of Australian exporters in the past decade.
“We urge the government to show the same level of commitment to concluding a balanced and comprehensive agreement with China, as has been done with both Japan and Korea [which will be formally signed in Seoul today].”
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