Australia-Japan Trade Talks Push for April Finish

Ministerial-level meetings this week to advance negotiations for a Canberra-Tokyo trade pact continued to struggle over automobile and agriculture tariffs, despite hopes that the two sides would be able to announce significant progress ahead of Australian Prime Minister Tony Abbott’s visit to Japan next month.

Negotiators are trying to finish the seven-year talks during Abbott’s high-profile Asia trip, in time for the two sides to sign a deal during Japanese Prime Minister Shinzo Abe’s own visit to Canberra in July.

The push to close the deal quickly is part of a broader effort that Australia is making to strengthen ties with its Asian partners, with the Australian Prime Minister confirming last October that he hoped to conclude the ongoing trade talks with Japan, China, and South Korea within the subsequent 12 months.

Some of the main issues that have arisen in the Australia-Japan talks were also seen in Canberra’s negotiations with Seoul, which were completed this past December. Like South Korea, Japan is asking for Australia’s automobile import tariffs to be slashed from their current levels of five percent in return for improved market access to Japan’s agricultural sector.

The agriculture component of the Japan deal has proven particularly controversial, with the Australian National Farmers Federation (NFF) concerned over possible “carve-outs” that would protect the Japanese “big five” agricultural commodities - namely rice, sugar, beef, dairy, and grain. The farm group says it was disappointed that rice was an exception to the Seoul deal and is reportedly pressuring Canberra not to make similar concessions to Tokyo.

Japanese tariffs on imported beef - Australia’s largest export to the Asian island economy - are another major sticking point. While these tariffs currently stand at 38.5 percent, Australia is reportedly asking that this be reduced to under 19 percent, while Tokyo has suggested 30.

Japan’s reluctance to liberalise its agricultural sector has proven similarly contentious in the 12-country Trans-Pacific Partnership talks, of which Australia is also a part. The US has been one of the most vocal advocates for greater agricultural market access in these areas, and many trade observers say this issue is the biggest hurdle for concluding the negotiations.