Australia’s historic free trade deal with Japan

cattleAustralia’s agriculture industry is set to benefit from a recently signed history free trade deal with Japan.

The deal itself will see significant tariff cuts across the exportation of various agricultural goods from dairy to beef and seafood. This also marks the first ever free trade deal Japan has made with another major exporting nation.

As it currently stands, Japan is the biggest export market for Australian beef and dairy products. Overall, the country stands as Australia’s second-largest trading partner.

What the deal covers

The free trade agreement seeks to reduce the current barriers for Australia’s exportation of goods to Japan. Over the next 18 years, the tariff associated with the exportation of frozen Australian beef products will be halved from 38.5% to 19.5%. An immediate tariff cut of up to 8% will be enacted in the first year of the agreement.

Other notable changes include:

  • Reduction to chilled beef tariffs – although slightly less than that of frozen beef tariffs, there will be a first-year tariff cut of up to 6%
  • The amount of duty-free cheese that can be exported to Japan per year will increase by 20,000 tonnes (the current duty free allowance is 27,000 tonnes and worth $372 million/year)
  • The Australian government notes the sugar industry will ‘benefit from tariff elimination and reduced levies for international standard raw sugar’
  • The agreement will also bind tariffs related to wool, cotton, lamb and beer at zero
  • Tariffs on bottled, sparkling and bulk wine will be eliminated over the next seven years
  • Tariffs will be reduced or outright eliminated for the following: fruits, vegetables, nuts, juice, canned tomatoes, canned peaches, and canned pears
  • The following seafood exports will see their associated tariffs eliminated: shrimp and prawns, rock lobsters, fresh and preserved abalone, oysters, crab, both yellowfin and southern bluefin tuna, toothfish and sea urchins, and fish oils
  • Tariff reductions will occur for vegetable and canola oils
  • There will be increased tariff-free access to Japan for barley and honey exporters
  • Preferential access to Japan for large volume exports of pork and pork products will also occur

In other words, a lot of big changes.

The benefit for the agricultural industry

The benefit of such an agreement and how it applies to the agricultural industry isn’t that hard to see. With a freer, more open trading agreement between Australia and Japan, that means more farmers and those involved the agriculture industry will now have more avenues in which to sell and supply their goods. Not only that, but exporting goods to Japan will become far cheaper, meaning less expenses and red tape.

For the beef industry alone, the changes will be worth approximately $5.5 billion over the next 20 years. While the remaining tariffs related to certain products may be seen as somewhat disappointing, the reduction in tariff cost is still a big win. A deal such as this will help better secure the future livelihood of the agricultural industry, as well as promote greater financial well being for Australian farmers.


What do you think of the free trade deal made between Australia and Japan? Share your thoughts in the comments below.