Brakes on Aussie-Japanese Trade Deal Over Auto and Agro Tariffs

Australia’s bid to reach a trade deal with Japan during Prime Minister Tony Abbott’s North Asia visit next week is being jeopardized by a disagreement over agricultural and car tariffs, Trade Minister Andrew Robb said.

The free-trade talks are stuck on the issue of Japanese tariffs on beef and dairy imports, and Australian duties on car imports, Robb said in a phone interview from Melbourne today. Failure to sign an initial deal when Abbott meets with Prime Minister Shinzo Abe April 7 would be “unfortunate,” he said.

Japan is Australia’s second-largest trading partner with two-way trade of items including coal, iron ore, copper and beef worth A$69.2 billion ($63.9 billion) in 2012-13, according to government figures. Abbott, whose Liberal-National coalition won office in September, will sign a trade agreement with South Korea during his trip and attempt to progress negotiations with China, Australia’s biggest trading partner.

China Deal

The talks with China are more technical than those with Japan and South Korea as there are 11,000 tariff lines that need to be agreed upon. Sticking points include China’s concerns over investment and labor mobility, while Australia is keen for progress on agricultural and services issues, he said.

Australia, which will cease making automobiles by 2017 as Toyota Motor Corp., Ford Motor Co. and General Motors Co. shutter plants, wants to protect its 700 car-component makers, Robb said. Japan’s exports of passenger motor vehicles to Australia totaled A$6.8 billion in the 12 months to the end of last June, according to government figures.