Japan, Australia reach agreement on free-trade deal

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Japan and Australia on Monday said they had reached “substantive agreement” on a long-awaited free-trade deal, in a rare opening of Japan’s protected markets, even as talks to ink a huge Asia-Pacific agreement run into trouble.

The deal was announced as Japanese Prime Minister Shinzo Abe and visiting Australian Prime Minister Tony Abbott held a briefing in Tokyo Monday evening.

It “will create significant new trade and investment opportunities for the two countries”, a press statement said, adding that a final deal would be signed “as early as possible”.

Speaking to reporters, Abbott said the deal marked “truly an historic occasion for both of our countries”, with the pair also agreeing to boost cooperation in security, including joint development of defence equipment.

On Tuesday, Canberra is set to sign a free trade pact with Seoul after four years of negotiations. Abbott will head to China after South Korea as part of an East Asian tour.

Under Abe, Tokyo has entered into talks on the massive Trans-Pacific Partnership (TPP), a proposed free-trade deal that would encompass 12 nations including the United States and Japan.

But there are major sticking points among various nations, including the opening of protected domestic markets such as agriculture and automobiles.

Japan has long been accused of protecting its domestic industries — including the politically powerful agricultural sector — with high trade and other non-tariff barriers, while many of its own exports, including vehicles and electronics, enjoy big sales overseas.

The US has expressed frustration with Japan over its stance on keeping certain sectors out of the TPP, as talks continue.

Tokyo is also in separate free-trade negotiations with the European Union.

Australia would become the first major exporter of farm produce, including beef, to conclude a free-trade accord with Japan, Kyodo news agency said, with a deal expected to give Australian exports a significant competitive edge over US rivals.

There were few details about the trade deal announced Monday.

Japanese media have reported that Australia would drop its five percent duty on small and mid-sized Japanese cars while Tokyo was ready to lower its tariff on Australian beef, currently sitting at 38.5 per cent.

The agreement to boost security cooperation come as Japan last week loosened a self-imposed ban on weapons exports to boost Tokyo’s global role in a move which unnerved neighbouring China.

“We decided to start talks towards an agreement on a co-operative framework in the areas of defence equipment and technology,” Abe said Monday evening.

The Australian premier attended a national security council meeting in Tokyo earlier in the day, a first for a foreign leader, as he called for peace in the region.

“This will be the Asian century,” Abbott said.

“I think that’s true: The better Asia is, the better the world will be,” he added.

Regional tensions have soared as China and Japan lock horns over the ownership of a string of islands in the East China Sea, while Beijing is also embroiled in a dispute with several nations over territory in the South China Sea, which it claims almost in its entirety.

An unpredictable North Korea hangs over the regional power balance.

Abbott’s visit came as Tokyo said last week it would cancel its annual Antarctic whaling hunt for the first time in more than 25 years to abide by a UN court ruling that the scheme was a commercial activity disguised as science.

Australia, backed by New Zealand, hauled Japan before the International Court of Justice in 2010 in a bid to end the annual Southern Ocean hunt — a thorny diplomatic spat that threatened to damage the trade talks.

The deal with South Korea, meanwhile, calls for Canberra and Seoul to remove almost all tariffs on traded goods within 10 years of the agreement going into effect.

Australia will abolish a five per cent import tariff on most South Korean-made cars while a five per cent tariff on other South Korean exports such as TVs, refrigerators and machinery would also be eliminated immediately.

Tariffs will also go on resources, energy and manufactured goods, while the deal will open the door to new opportunities for Australian firms in South Korea’s education and telecommunications markets.

 

 

 

 

Source : Channel News Asia | April 7, 2014

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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