January start for Aust-Japan trade deal

THE much anticipated  Japan-Australia Economic Partnership Agreement (JAEPA) will enter into force on January 15, 2015, opening up two rounds of tariff cuts for Australian exporters to benefit from in the first half of the year.

Australian beef – with exports to Japan last year worth $1.4 billion – is expected to be a major beneficiary with the 38.5 percent tariff to be halved over 15 years, with heavy front-end loading, including an eight percent cut in the first year. This will give Australian exporters a major advantage over the United States – the major competitor.

Australia and Japan exchanged notes in Canberra on December 16, confirming that both countries have completed their domestic processes and are ready to bring JAEPA into force.

“JAEPA will deliver substantial benefits for the Australian economy, and the deal means that our exporters will benefit from an immediate round of tariff cuts by Japan on January 15, followed by a further round of cuts on the April 1, 2015,” Federal Trade and Investment Minister Andrew Robb said.

“Like the back-to-back tariff cuts provided by the Korea-Australia Free Trade Agreement, this will deliver immediate benefits for exporters and significantly enhance their competitive position in the Japanese market.”

Mr Robb said more than 97 percent of Australia’s goods exports to Japan would receive preferential access, or enter duty-free, once the Agreement is fully implemented.

“JAEPA will expand opportunities with our second largest trading partner across a wide range of industries, including agriculture and processed foods, resources, manufacturing and services,” Mr Robb said.

 “This is the most ambitious Free Trade Agreement Japan has concluded with anyone, let alone a major agricultural economy. The Agreement will also support growth in investment from Japan – already our third largest investor – by raising the foreign investment screening threshold for private Japanese investment into Australia,” Mr Robb said.

JAEPA will be the second of three historic trade agreements concluded by the current Federal Government  to enter into force following Korea.

The recently concluded China-Australia Free Trade Agreement (ChAFTA) forms the third in a powerful trifecta of agreements with the major economies of North Asia, Mr Robb said.

He said he hoped ChAFTA would enter into force in the second half of 2015 following completion of domestic legal and parliamentary processes in both countries.

“These three agreements will be transformative for the Australian economy, supporting economic growth, job creation, greater prosperity and higher living standards for Australians,” Mr Robb said.

JAEPA was signed in Canberra on July 8, 2014, during Japanese Prime Minister Abe’s visit to Australia.

http://www.dfat.gov.au/fta/jaepa/

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