Japan-Australia agreement will offer opportunities to businesses

The Japan-Australia Economic Partnership Agreement will offer opportunities to Australian businesses, individuals and companies. I want to use my time to start with to congratulate the Minister for Trade and Investment, Andrew Robb. He has done a huge job that should not be underestimated—three major free trade agreements in a year. The weight of work that has gone on behind the scenes is huge. I know that the minister has applied himself and all of the resources at his disposal to get this done. These are truly landmark free trade agreements for Australia and they will see benefits almost ad infinitum in this country.

Australian companies and businesses have been given an opportunity. That is one of the best things we as a government can do—give them an opportunity. That is what these free trade agreements do. We know that Japan is a vital, longstanding and highly complementary economic partner for Australia. We will also see through this free trade agreement and partnership with Japan a strengthening of our bilateral relationship, something that we on this side of the House certainly do not underestimate.

In 2013 two-way goods and services trade with Japan reached $70.8 billion, making Japan Australia’s second largest trading partner, with a surplus to Australia of $28.3 billion. The latest merchandise trade figures show Japan was Australia’s second largest goods export destination and third largest source of imports in 2013. At the end of 2013, Japanese investment in Australia was valued at $131 billion and Australian investment in Japan was valued at $50.2 billion.

Despite the strong and mutually beneficial trade and investment relationship between Japan and Australia over a sustained period, we have seen the absence of a bilateral trade agreement. That has constrained Australian producers and exporters and their ability to further build trade in the context of high tariffs. It has maintained inefficient barriers to Australia’s trade, which has also limited profitability. It certainly has not provided protection for Australia’s exporters against preferential agreements that Japan has concluded or is negotiating with key competitors. It maintained higher costs for Australian consumers and businesses for key Japanese imports and maintained barriers to investment in trade and services. We heard that in Australia services are 70 per cent of our economy and only 17 per cent of our exports. So there is a great opportunity for growth in that sector in all of the free trade agreements.

The Japan-Australia Economic Partnership Agreement also provides an opportunity to take this bilateral relationship to the next level and further build the framework underpinning a key economic partnership for Australia. As we know, Australian exporters have faced very high tariffs into Japan, with customs duties levied on 6.5 per cent of Australian goods exported to that country. These are particularly high in agriculture, a vital area of trade for Australia, with an average tariff of 16.6 per cent. As Japan is Australia’s second largest agricultural market, with an estimated total value of $4 billion in 2013, it is Australia’s largest market for beef, cheese, animal feed and offal and an important destination for sugar, vegetable oil, seafood, fruit and nuts. Of course, Japan historically has imposed high tariffs on a range of agricultural goods, particularly on those key products of interest for Australia, including beef, dairy, wheat, sugar, barley, vegetable oils, tuna and rice.

Any agreement and any change in this certainly provides opportunities for businesses, for individuals and for companies—the opening of the door. Of course, many agricultural exports also confronted complex or opaque regulatory frameworks that included things from tariff rate quotas, state trading and special safeguard and emergency tariffs. So, in the absence of an EPA with Japan, Australian producers—agricultural producers—would continue to face these very high tariffs and complex barriers on major products. It is not just agricultural products; Japan is also Australia’s second largest market for non-agricultural goods, with exports worth over $42 billion. It is Australia’s largest destination for coal and liquefied natural gas, second-largest destination for iron ore and a major market for petroleum and aluminium.

In keeping my remarks similar to the ones that I have made, I really wanted to focus on the fact that the opening of the doors—the strengthening of the bilateral arrangement—is a key deliverable from this agreement. Once again, I will finish where I started. I know, as every member on our side does, the power of work that has been done by the minister to deliver these three critical free trade agreements. It has been an outstanding effort. In my speech today I want to recognise his efforts and all of those who have been working on this through the department—through DFAT. I think the job they have done has been absolutely outstanding. I have no doubt that the general economy as well as individual companies, individual businesses and individual industries are those that will benefit from the work that has been completed.