Thank you ladies and gentlemen, it is a great pleasure to be here with you.
It is an especially great pleasure to be here in Tokyo during the 60th anniversary year of the Agreement on Commerce struck between our two countries in 1957.
It really would be difficult to overstate the role this agreement has played in the economic development of both our countries.
You will all of course be familiar with the story of Japan’s economic miracle – her rapid industrialisation in the post war years, realised in part of course by that historic decision to open up trade with Australia.
Perhaps less known here in Japan, is just how important it was for Australia, then a very young country, to find new markets for our exports in our own post-war economic transformation.
Sixty years ago, almost a third of our trade was still with the United Kingdom.
We were a heavily agriculturally based economy, protected by high tariffs and constrained by rigid and regulated markets for labour and capital.
Today, Australia is an innovative, diverse and highly open economy deeply integrated into the dynamic growth markets of Asia.
The Commerce Agreement came at a time when Australia was starting down a road of more trade openness and diversification – with an emphasis on trading within Asia - that has culminated in our current 26-year run of unbroken annual economic growth.
Indeed, the Agreement we signed in 1957 was a progressive, politically challenging and highly liberalising trade deal for its time.
To coincide with the 60th anniversary, the Australian Trade and Investment Commission has commenced a major study entitled, Japanese Investment in Australia: A Trusted Partnership.
The report will demonstrate how Japanese investors have set a high standard for productive investment in Australia - facilitating job creation, regional development, access to global value chains, innovation, and the development of new industries through the introduction of cutting-edge technologies.
Recent investments in the services sector, notably with the Japan Post acquisition of the Toll Group for $6.1 billion in 2015, demonstrate the continuing diversity of Japanese investment into Australia.
The project is also forward-looking: it aims to identify new opportunities for Japan to invest or re-invest in Australia and for us to partner with Japan in global value chains. The project will complement outcomes in the Japan-Australia Economic Partnership Agreement.
I am delighted at the support we have received from the Japanese Government for this important work, and I look forward to launching the study over coming months.
The core attributes of our relationship today - trust, mutual respect, compatibility and economic complementarity – are a strong foundation for the future.
Like Japan, Australia remains committed to open markets and a strong, rules-based global trading system.
We remain committed because we’ve seen positive effects of the liberalising actions we’ve taken, for ourselves and our trading partners.
It was in this very same spirit of optimism and shared values that we approached the negotiation of the Japan Australia Economic Partnership – JAEPA, a worthy successor to the 1957 Commerce Agreement.
JAEPA has eliminated tariffs on more than 3,400 Australian product lines since it entered into force, boosting trade with Japan, our second biggest trading partner.
We remain the only major agricultural producer to have an FTA with Japan, and I’m thrilled to see that two-way business is booming under this landmark agreement.
I am also delighted with the feedback we’re getting from Japanese consumers experiencing our world-class agricultural products thanks to JAEPA.
Australia’s table grapes, carrots, chilled beef and honey are experiencing huge increases in demand from Japanese consumers. Exports of beautiful Australian grapes to Japanese tables have increased by 50 fold since the JAEPA’s inception. Our honey exports have doubled. Our beefs exports have increased almost 25 per cent to almost $1.1 billion.
And what better to accompany a high quality steak than a bold Australian wine: exports of our bottled wine have increased by 13 per cent to over $35 million.
In the other direction, JAEPA has also delivered significant gains for Japanese exporters.
We have seen the value of Japanese passenger motor vehicle exports to Australia increase by more than 17 per cent. Likewise, Japan's exports of engineering equipment and optical goods are up by more than 40 per cent.
JAEPA sets up our economic relationship for a great degree of success in the future, for both our countries.
Not just in the traditional areas in which our cooperation thrives as I’ve just outlined.
We’ll also see significant benefits from the Asia Region Funds Passport, a mechanism to facilitate cross border distribution of managed fund products across the region.
Once operational, this will permit Australian-domiciled investment funds to be sold directly to retail investors in Japan and vice versa.
Essentially, the Asia Region Funds Passport is an FTA for fund managers. It will overcome existing differences in licencing, regulating and operating the trading of managed funds.
The scheme will help unlock the growing pool of savings available in the region and provide investors with a more diverse range of investment opportunities. This in turn will deepen the region’s capital market to attract finance for economic development and growth.
Just as our economic cooperation flourished as Japan became a technological powerhouse, our complementary strengths position us well for future cooperation.
Blockchain, the complex trust network that underpins the bitcoin currency – holds immense promise in all sorts of future applications and it’s a great example of what our partnership can achieve with energy and creative thinking.
Australia is pioneering the development of international standards on blockchain and distributed ledger technologies, while the recent recognition of cryptocurrencies as legal tender also puts Japan at the forefront of innovation in this field.
Several major Japanese banks, for example, are investing in bitFlyer, the country’s largest bitcoin exchange.
As leaders in this space, blockchain forms a natural cooperation point between us.
Trust is king, as you all know, in the brave new world of digital commerce.
This Japanese-Australian cooperation – right at the cutting edge of technological advances – can set us up for the next evolution of financial and banking services globally.
It’s also very relevant to other industries such as agriculture. Australian start-up, AgriDigitial, for example, has developed the world’s first blockchain-enabled commodity management platform. This real-time settlement platform provides secure payment on delivery enabling producers to maintain cash flow and allowing them to further invest in their businesses.
Agriculture, specifically ag-tech, is another great field of joint endeavour.
There is a definite synergy between the agricultural aspirations of our two countries.
Japan is looking to use its supply chain capability, skills and technology to access the growing middle class markets of Asia.
Australia, for its part is looking to develop its sparsely populated north, a region that offers great potential for new agrifood production in a pristine environment, close to those growth markets.
In my mind, this represents an extraordinary opportunity to take our relationship into new and profitable areas.
On that point, I will be hosting the next Northern Australia Investment Forum in Cairns in November this year.
It will provide an opportunity for Japanese businesses to engage with project owners, proponents and experts on the opportunities and challenges of developing agriculture in Australia’s north.
We’re already long-standing trading partners in food and agriculture, and both countries possess a rich pool of industry-focused research organisations and a reputation as early adopters.
So we’re natural partners for innovative ways that can increase productivity and quality.
Hitachi, for example, recently announced a $1.25 billion investment in its Australian Social Innovation business, to bring government, corporations and the community together to collaborate on technical solutions that improve societies.
For example, a number of power utilities are using Hitachi’s “Visualization Suite” to monitor and report on the condition and safety of power poles across Australia’s vast electricity network.
Hitachi is also testing the use of advanced global positioning systems for trials of a robotic tractor in NSW and Queensland.
Featuring what is known as the Quasi- Zenith Satellite System, this work is being conducted with a number of Australian and Japanese partners.
In Tasmania, Mitsui & Co is working with farmers to create a counter-seasonal supply for a new super onion with high levels of antioxidants, improving longevity and supporting heart health, endurance, and the immune system.
JA Biei, an entrepreneurial agriculture cooperative in Hokkaido is also collaborating with Tasmania’s Technical and Further Education institute to deliver short-course education programs for young Japanese farmers in Tasmania.
As part of this, trial projects will help Tasmanian and Japanese farmers establish a horticultural production platform to export counter-seasonal produce to Japan or elsewhere.
There is also great potential for us to do more in emerging life sciences, and in providing high quality care to our ageing populations.
Globally, the market for medtech – biopharma and medical devices is booming – and Australian firms are right at the cutting edge.
They’re making a global impact with niche products such as 3D-customised titanium implants, bio-scaffolds for cardiovascular repairs, implantable hearing solutions and adaptive diagnostic platforms for molecular diagnostics and cancer detection – to name just to name a few.
Japan’s interest and expertise in this area is also well known and we’d like to encourage more joint work.
A bilateral memorandum of understanding on regenerative medicine, for example, signed in 2015, is providing a platform for greater business engagement in this field.
For my part, I have challenged Austrade and DFAT to think differently, to think more widely, to embrace new ideas and chase new opportunities.
The Turnbull Government is committed to pursuing an ambitious trade agenda and creating new export opportunities for Australian businesses.
As we all know, more exports means more jobs – and openness to the international trade and investment drivers that deliver jobs growth is central to Australia’s prosperity.
I know that Japan shares the same view that trade and investment are critical to its prosperity.
Groups like this very chamber are at the forefront of bringing these ideas together.
But I would lay that same challenge out to you.
I see so much potential for us to do more together – building upon JAEPA.
Australia’s commitment to open markets, active membership of the WTO, APEC and G20, and network of existing FTAs, as well as those under negotiation, all contribute to its position as a leading trading nation and partner for Japan.
I look forward to working with Japan in these forums to strengthen the global rules-based system, to combat protectionism, and to making progress in trade deals that will be central to creating future jobs and growth in both our countries.
Japanese investment has been crucial to the development of new sectors in Australia over many decades and the efforts of Japan’s corporations to diversify their investments are a strong signal of their confidence in the Australian economy.
Australia will continue to welcome Japanese investment across the economy, to build prosperity for future generations.
At a time when some are calling into question the benefits of international trade, demonstrating the benefits of opening access to new markets through agreements like JAEPA is more important than ever.
Ladies and gentlemen I want to thank you for the opportunity to be here with you today.
I am immensely proud of the strong trading relationship our countries have built over 60 years – and I’m truly excited by the potential for us to do much more in the years ahead.
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