ROSS GREENWOOD: The free trade agreement with Japan is historic. The very first time a major developed country has signed a free trade agreement with Japan. Of course it follows on from the agreement that Australia has signed with South Korea and also, even negotiations that are now underway with China itself. Let's go to the Trade Minister of Australia, the man who's helped put this together, Andrew Robb, is on the line. Many thanks for your time, Andrew.
ANDREW ROBB: My pleasure, Ross.
ROSS GREENWOOD: Look, a lot of people will be sitting there in two minds about this. All of the positives are coming out. A lot of businesses in Australia might be sitting there and saying, well okay, if all these Japanese manufactured goods coming to Australia are potentially going to be cheaper, does that put Australia's manufacturing sector under even more pressure in the future?
ANDREW ROBB: Well, look, the thing is that today, nearly 50 per cent of everything that's produced goes into the global supply chain. In other words, they're a part of some other product. And for many Australian manufacturers, they actually import Japanese components for whatever they make here. A lot of those will be cheaper.
So, this will be a significant benefit for many, many manufacturers.
It's not the finished product that's so much the problem for many of them, it's getting the cheaper components. So, on that front, that'll help our manufacturers for a range of things such as cars will be cheaper because something like $1500 worth of tariff comes off all the Japanese vehicles. For a lot of electronics which we buy from Japan now, they will be cheaper because of the removal of tariffs and a lot of white goods so there will be a real price advantage for many things including the input into many activities in manufacturing.
ROSS GREENWOOD: We heard earlier that Barnaby Joyce has indicated that he thought you were playing a fairly slight hand I think he called it. He said that most of the - and many of the tariffs had already disappeared in the past and so he thought the achievement was all the greater that you didn't have an awful lot of play with.
ANDREW ROBB: Well, that's very true. We are a very open economy and when you're trying to strike a deal, I'll give you this if you'll give me that, we didn't have too many tariffs in our back pocket to trade with but the Japanese I think have become aware that they've been in the doldrums for 20 years and one of the main reasons is because much of their industry is becoming increasingly uncompetitive and unless they reduce their barriers, things weren't going to work for them. The other thing is we've made it easier for them to invest here so, that was one - it's very attractive at the moment to invest in Australia and we need those dollars from overseas so, we have that to deal with and as it turned out the Japanese were prepared to bargain.
ROSS GREENWOOD: And Shinzo Abe, the Prime Minister, not only made mention of the fact that Australia would be vital for its supply chain in the future, in other words its raw materials and also its agricultural goods are - but this also - one of the key elements of this is the beef industry with Australia having really created a deal that has not been bettered even by the giant US exporters of beef.
ANDREW ROBB: No, that's correct. The beef is a very sweet deal in particular because it - in the first year eight per cent comes off and the second year another two per cent and I know the cattle industry in the United States and they won't be happy because it'll be giving our beef producers a very significant advantage from day one. But secondly, there are wonderful opportunities both ways.
We get access to government procurement in their market we get guaranteed visa access arrangements. A lot of our education providers will be able to set up in Japan, our legal, our financial, our environmental services, so it's not just the agriculture which has done very well out of this, but there's so many parts of our service industry which also will be able to establish in Japan where they couldn't before and make income from other parts of the world.
ROSS GREENWOOD: Is this all the big end of town? Is this all the big companies that will benefit from this free trade agreement or do you think that small- and medium-sized businesses can also at least have a crack and try and see whether there're opportunities for them.
ANDREW ROBB: No, there'll be ample opportunities for small- and medium-sized businesses for certain. In fact in many respects it may be easier for smaller players to find a niche in the Japanese market and build that organically. So, I do think it does create enormous opportunities for our small and medium enterprises, many of which are very world-competitive and this way they can take a step and grow their business, not just here but also create some balance and some ballast in case things move in one market and don't in another. So, it does really open up a new world for us and it is also I think not just what's in the agreement but you can see from the last 24 hours with Prime Minister Abe here, it does lead to just a better relationship, better trust and so much of business and so much of life is based on trust and that has been enhanced I think enormously which will feed in all sorts of ways into relationships and future deals.
ROSS GREENWOOD: And in a geo-political sense, does a strong relationship between Australia and Japan necessarily mean that our relationship with China is in any way diminished?
ANDREW ROBB:Well, this is the point people need to understand. We see a lot of commentary saying if you're better friends with one, you've got to be worse friends with someone else. That’s not true in life and it's not true between countries. And Australia is now so deeply economically tied to China and Japan and Korea, that our interests dictate closer security ties with all three countries. And that's what's happening. I mean we're engaging in I think naval exercises with China in the next few months. We're talking closer security arrangement with Japan. We need to be close to all three countries. They're 50 per cent of our exports now and we need peace in the region.
ROSS GREENWOOD:Andrew Robb, our Trade Minister, negotiating that free trade agreement with Japan signed today by the Prime Ministers of Japan and Australia. We appreciate your time.
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