JOINT PRESS RELEASE

THE HON. TONY ABBOTT MP, PRIME MINISTER THE HON. ANDREW ROBB AO MP, MINISTER FOR TRADE AND INVESTMENT HISTORIC FREE TRADE AGREEMENT CONCLUDED WITH JAPAN
Australia has concluded negotiations on an historic Economic Partnership Agreement with Japan, our second biggest trading partner. This historic agreement is good for the Australian economy, good for jobs, good for farmers and good for consumers. The breakthrough follows the successful conclusion of a Free Trade Agreement with Korea, which will be formally signed tomorrow in Seoul. Australia has broken new ground as the first major agricultural exporting economy to conclude such a liberalising agreement with Japan. The Japan-Australia Economic Partnership Agreement (JAEPA) will deliver a significant boost to Australian farmers and other agricultural producers, resource exporters, service providers and consumers. Better access for key agriculture products including beef, cheese, horticulture and wine will give Australia a head start over our competitors in this market. JAEPA represents a major windfall for Australian beef our biggest agricultural export to Japan, currently worth $1.4 billion. This includes a halving of the tariff on frozen beef from 38.5 per cent to 19.5 per cent, with deep cuts in the first year. Cheese, by far Australias largest dairy export to Japan at $372 million, will gain significant new duty-free access. Australian horticultural producers will gain from immediate tariff eliminations across a wide array of fruit, vegetables and nuts. The tariffs on canned products such as tomatoes, peaches and pears, as well as fruit and vegetable juices, will also be eliminated. Australian consumers will also be major beneficiaries of this Agreement, with tariffs eliminated on imported cars from Japan, as well as on household appliances and electronics. Australian services providers will also gain significant new access to the Japanese market across areas such as financial, education, telecommunications and legal services. JAEPA sends a strong message to Japanese investors that Australia is open for business.

7 April 2014
www.pm.gov.au

JAPAN AUSTRALIA ECONOMIC PARTNERSHIP AGREEMENT (JAEPA) KEY OUTCOMES

Overview of the Australia-Japan Trade Relationship: Japan and Australia are natural partners with highly complementary economies. JAEPA will deepen Australias engagement with Japan, the worlds third-largest economy with a population of over 127 million people. Japan is Australias second-largest export market and our second-largest trading partner. Total two-way trade reached $69.3 billion in 2012-13 11 per cent of Australia's total trade. In 2012-13, Australian exports to Japan were valued at $48.6 billion, accounting for over 16 per cent of all Australian exports. Total goods exports were valued at $46.5 billion. Japan is Australias largest market for LNG and coal (both around $14.0 billion). Total services exports were valued at $2.1 billion, comprising mostly recreational travel services ($828 million) and transport services ($596 million). Australia imported $20.6 billion from Japan in 2012-13. Of this, goods imports accounted for $18.3 billion. Services imports were valued at $2.3 billion, including transport services of $1.0 billion. JAEPA Overview: JAEPA is an historic development in Australias economic relationship with Japan. The agreement will deliver significant benefits to Australian agricultural producers, resource exporters, service providers and consumers. JAEPA will give many Australian producers and exporters a significant competitive advantage. Australia is the first major agricultural exporter to unlock Japans high import barriers. Japan is the second largest market for Australian agricultural products. More than 97 per cent of Australias exports to Japan will receive preferential access or enter duty-free when JAEPA is fully implemented. For Australian consumers JAEPA will deliver benefits through lower priced cars and household and electronic consumer goods. JAEPA sends a clear message to Japanese investors that Australia is an attractive investment destination. It will promote further growth and diversification in the flow of Japanese investment into Australia by raising the screening threshold. JAEPA also provides enhanced protections and certainty for bilateral investments.

www.pm.gov.au
1

Agricultural goods: Agricultural tariffs of up to 219 per cent will be eliminated or significantly reduced on many Australian agricultural exports. Exporters of beef, sugar, horticulture, wine, and seafood will benefit from preferential access to the Japanese market and tariffs will be bound at zero for wool, cotton, lamb and beer. Australias beef exporters will be big winners from JAEPA. As the first significant beef exporter to secure preferential access to Japan, Australia will have an immediate advantage over its major competitors. Australian beef exports to Japan, worth $1.4 billion in 2013, will benefit from a halving of the tariff, with a deep cut immediately on entry into force. Cheese, Australias largest dairy export to Japan, will gain significant new duty-free access. Australia exported $226 million of sugar to Japan in 2013, accounting for a third of Japans sugar imports. Australian sugar exporters will benefit from tariff elimination and reduced levies for international standard raw sugar. JAEPA will provide a very liberalising outcome for fruit, vegetables, nuts and juice, resulting in quick tariff elimination on the vast majority of Australian horticulture exports to Japan. The tariffs on canned products such as tomatoes, peaches and pears will also be eliminated. Other outcomes for agriculture include:

Bottled, sparkling and bulk wine will gain from tariff elimination over seven years. Barley exporters will have increased duty-free access. Exporters of canola and other vegetable oils will receive tariff elimination. Tariffs on shrimps and prawns, rock lobsters, abalone (fresh or preserved), oysters, crabs, yellowfin tuna, toothfish, sea urchins and fish oils and southern bluefin tuna will be eliminated. Australian honey producers will receive an Australia-specific quota that will rise over time, with the tariff eliminated over ten years. Australia will have preferential access for a large volume of pork and pork products.

Industrials, energy and minerals: On entry into force, 99.7 per cent of Japans industrials imports by value from Australia will enter Japan duty-free, with 99.9 per cent eliminated within 10 years. On full implementation of the agreement, 100 per cent of Australias industrials exports will benefit from duty-free entry into Japan. Energy and mineral resources Energy and mineral products account for almost 89 per cent of the value of Japans merchandise imports from Australia. Under JAEPA, all tariffs on energy and mineral products will be eliminated within ten years, most on entry into force of the agreement. Although many of Australias major resource exports, such as coal, iron ore and liquefied natural gas, enter Japan duty-free already, Japan will eliminate tariffs for all remaining resources products over 10 years, including unalloyed nickel and ferro-manganese.

www.pm.gov.au
2

There will be immediate tariff elimination on entry into force for:

coke and semi coke of coal petroleum oils aluminium hydroxide titanium dioxide

Manufactured products Japan currently applies tariffs of up to 30 per cent on some manufactured products. Under JAEPA, tariffs on $243 million worth of Australian manufactured exports to Japan will be eliminated immediately on entry into force of the agreement. Japans tariffs on vehicles, automotive parts and most pharmaceuticals are already set at zero. Services: JAEPA guarantees Australian services suppliers access to the significant and well-developed Japanese market in key areas of commercial interest including financial, education, telecommunications and legal services. The Agreement provides Australia with outcomes equal to or better than, the best commitments Japan has made in any of its other trade agreements. Australian financial services providers will benefit from commitments made by Japan for the first time, guaranteeing cross-border access for Australian funds managers providing investment advice and portfolio management services. Australia and Japan have also agreed to an ongoing legal services cooperation agenda including for greater movement and recognition of each others lawyers and strengthening cooperation on provision of transnational legal services in third countries through discussion between the Law Council of Australia and the Japan Federation of Bar Associations. Investment, intellectual property and government procurement: JAEPA sends a clear message to Japanese investors that Australia is an attractive investment destination. It will promote further growth and diversification in the flow of Japanese investment into Australia by raising the screening threshold, at which private Japanese investment in non-sensitive sectors is considered by the Foreign Investment Review Board, from $248 to $1,078 million. Australia has reserved policy space to screen proposals for investment in agricultural land and agribusinesses at lower levels. JAEPA also provides enhanced protections and certainty for bilateral investments. The agreement also includes commitments on intellectual property, which will ensure that Australian innovators and Australian creative industries enjoy high levels of protection in Japan broadly equivalent to protections provided in Australia. JAEPA guarantees Australian suppliers access to the Japanese government procurement market and contains commitments that will ensure transparency and facilitate participation in procurement processes. Australian and Japanese procuring entities have committed to provide national treatment for the goods, services and suppliers of the other Party for procurements above agreed value thresholds.

www.pm.gov.au
3