THOSE highly critical of the Japan Australia Economic Partnership Agreement for not delivering all things to all people are very harsh judges indeed.
JAEPA by far represents the highest quality trade deal that Japan has ever concluded with anybody. It will see 97 per cent of Australia’s current trade with Japan receive preferential access over our competitors or enter duty free when fully implemented.
No, it is not 100 per cent liberating, but we drove a hard bargain and have secured major concessions that many thought were simply not possible. It affords Australian agriculture a major competitive advantage across beef, grain, sugar, dairy, horticulture, seafood and wine.
Beef is our biggest agricultural export to Japan, currently worth $1.4 billion and the deal we secured is most significant. The 38.5 per cent tariff on frozen beef will be halved over 15 years with heavy front-end loading, including an eight per cent cut in the first year. This will give us a huge advantage over the U.S., our major competitor and will give our industry an estimated annual boost of $300-400 million.
Australian beef will also never again be subjected to the dreaded, 50 per cent global ‘snapback’ tariff faced by our competitors when there is a rapid rise in beef imports.
Outside very limited concessions to Switzerland on cheese and on ice cream to Thailand and Philippines, Japan has effectively excluded dairy products from all trade deals until now.
Under JAEPA we will receive a new duty free, Australia-only quota for natural cheddar cheese, growing to 20,000 tonnes. Cheese is by far Australia’s biggest dairy export to Japan, worth $372 million last year.
We will also benefit from the halving of the 40 per cent tariff on processed cheese over 10 years and immediate tariff cuts on grated and powdered cheese as well as a 20 per cent tariff cut on cheese such as blue-veined, with no volume restrictions.
New duty free access has also been secured for milk products; protein concentrates, lactose and casein. And the agreement also opens up new growth opportunities for our ice cream and yoghurt with a halving of tariffs of up to 30 per cent with growing quotas over 10 years.
We have been afforded preferential access for high quality raw sugar with a significant, effective tariff reduction of 38 per centage points compared to our competitors who will continue to face prohibitive tariff levels.
Across horticulture there is new scope for strong export growth with tariffs to be eliminated across a wide variety of fruit, vegetables and nuts. Tariffs will also go on fruit juices, vegetable juices and canned fruit.
Tariffs will be eliminated immediately on asparagus, our biggest vegetable export to Japan; on carrots, potatoes, leeks, garlic, tomatoes, broccoli, cabbage, spinach, capsicum, pumpkins and the list goes on. Tariffs will also go on mangoes, raspberries, blueberries, cranberries, strawberries, cherries, grapefruit, pears, apricots, peaches, plums and so on.
Australian wine producers will benefit from the phased elimination of a 15 per cent tariff on bottled wine in a growing market where our wines have an excellent reputation.
We have also managed some hard fought concessions on a variety grains, including wheat, barley, malt and oats, milled corn, sorghum, buckwheat as well as pulses, lentils and chickpeas. In addition there are wins for honey, chocolate, confectionary, cakes biscuits and breakfast cereals.
There is no reason why areas with modest or even non-existent exports on account of prohibitive restrictions cannot grow into substantial markets worth hundreds-of-millions of dollars over the coming years off the back of this agreement.
It follows the conclusion of our Free Trade Agreement with Korea and with a deal looming with China these advances with our biggest trading partners will help take Australian agriculture to a new level.
- Trade Minister's Office: (02) 6277 7420
- DFAT Media Liaison: (02) 6261 1555