Red meat industry welcomes start for Japan trade agreement

Jon Condon, 14/01/2015

THE Australian red meat industry has welcomed the news that the Japan-Australia Economic Partnership Agreement (JAEPA) will enter into force tomorrow, 15 January.

japan-beef-retail-aussieChairman of the beef industry’s JAEPA Taskforce, Lachie Hart, said Japan had been a critically important partner for the Australian beef industry and was Australia’s most valuable export market over many years, so the deal provided a useful advantage to the sector.

Under the agreement, tariffs on frozen Australian beef entering Japan will drop from 38.5 percent to 19.5pc over 18 years, and chilled beef tariffs will fall from 38.5pc to 23.5pc over 15 years. The distinction between the two reflects Japan’s view that frozen (mostly manufacturing) imported Australian beef represents a lesser risk to Japan’s own domestic beef industry than chilled beef does.

Entry into Force tomorrow will deliver the first tariff cuts (8pc on frozen beef and 6pc on chilled) with the second tariff cuts (2pc frozen and 1pc chilled) due on April 1 – the commencement of the new Japanese fiscal year. For sheepmeat, the JAEPA tariff will remain at 0pc.

“As a result of the JAEPA, sales of Australian beef to Japan are expected to rise by around $5.5 billion over the term of the agreement, boosting the annual gross value of Australian beef production by up to 7,” Mr Hart said.

In 2014, Australia shipped 294,000 tonnes of beef to Japan, 2pc higher than 2013 and 23pc of total beef exports during the year, underpinned by improved demand for Australian chilled beef products.

Mr Hart thanked the Prime Minister, Minister for Trade and Investment, DFAT officials in Canberra and the Australian Embassy in Tokyo for their combined efforts in achieving entry into force of the JAEPA prior to the end of the Japanese fiscal year, enabling two tariff cuts within several months.

“We congratulate the Australian Government on negotiating the best result that could be achieved for the beef industry, and hope to see further trade reform efforts with Japan via the Trans-Pacific Partnership and Regional Comprehensive Economic Partnership negotiations,” he said.

Cattle Council of Australia said the start of the JAEPA agreement tomorrow was welcome news for Australian beef producers.

CCA president Howard Smith said that in finalising JAEPA, Australia was ahead of competitors in securing better market access in Japan for beef.

“Japan continues to be an integral market for the Australian beef industry and CCA sees opportunities to grow Japanese demand for Australian beef through the implementation of JAEPA,” he said.

“The flow-through benefits of reducing burden from the supply chain, through the implementation of JAEPA, should provide an opportunity for greater farm-gate prices, with modelling suggesting a boost in the annual gross value of Australian beef production by up to 7pc.”

The implementation of JAEPA was also important because it paved the way for greater trade reform with Japan via the Trans-Pacific Partnership and Regional Comprehensive Economic Partnership negotiations.

“The work of the Government, in relation to securing yet another opportunity for Australian beef, must be commended,” Mr Smith said.

National Australia Bank’s general manager, Japan, Kohei Tsushima, said Australian agribusinesses, financial services, health and education sectors were the most likely to benefit from the agreement.

With Japan still Australia’s second largest trading partner and one of Australia’s largest export markets, Mr Tsushima said the commencement of JAEPA was exciting for Australian business.

“More markets open for Australian business means more jobs in Australia,” he said.

“JAEPA sends a clear message to Japanese investors that Australia is an attractive investment destination. For Australian businesses, the key is to success in Japan is to build strong relationships and have a consistent strategy. It might take time to build a relationship, but once that relationship is in place, Japanese companies work very hard to ensure that both parties benefit.”

Within the beef sector, Australian frozen beef exporters would now have a competitive advantage as compared to US farmers who will continue to face higher tariffs, Mr Tsushima said.

“NAB also expects more Japanese companies to invest in upstream agribusiness in Australia. We’ve already seen the likes of Ito En, Kagome and Saizeriya invest in agribusinesses in Australia, and we expect to see more of these types of investments from large Japanese companies over time.”

“In the past, investment by Australian companies into Japan has been relatively low. However, with the JAEPA, there are now new opportunities for Australian businesses to move into Japan.”

  • JAEPA enters into force tomorrow, following an exchange of notes by Australia and Japan on 16 December, certifying that both Parties have completed their domestic processes.



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