While the Trans-Pacific Partnership is on hold partly due to Japanese intransigence--more on this later--two TPP negotiators have nevertheless concluded a bilateral deal. The Japanese get improved market access for manufactured goods to Australia including those old standbys consumer electronics and automobiles. In exchange, the Australians will gain improved (selective) agricultural market access. Yes, rice is off the table--this is Japan after all--as are certain varieties of beef sacred to Japanese farmers. However, less sensitive agricultural product categories in Japan have been opened to Australian exports. The
headlines make it sound like a (sorry) cars-for-cows deal:
Japanese media reported Australia would drop its five percent duty on small and mid-sized Japanese cars, while Tokyo had agreed to cut its steep tariff of 38.5 percent on Australian beef by up to half for some varieties.
For some reason, most news coverage is emanating from Australia and very little from Japan. Still, sentiment in Oz is
fairly positive towards the FTA:
News Corp Australia revealed this morning that the price of an average imported Japanese car in Australia will drop by up to $1500 with the existing five per cent tariffs on imported cars axed. A similar FTA recently secured with Korea was estimated to be worth savings of $700 a year for the average Australian family....
Australian agriculture will also be allowed unprecedented access to Japanese markets with tariffs eliminated on the majority of horticultural products. Cheese and wine makers and sea food producers will also be given greater access to sell products into Japan with tariffs cut on some while others will benefit from a lifting in quotas. As expected, rice was excluded from the deal.
From my point of view, it's simply the Japanese strategically making agricultural concessions to keep up with the
Koreans who inked a soon-to-be-implemented deal with Australia and feared being left at a competitive disadvantage down under. It's largely to maintain competitive parity since the tariff reductions will largely duplicate those given to the Koreans:
Australia will abolish a five-percent import tariff on most South Korea-made cars while a five percent tariff on other South Korean exports such as TVs, refrigerators and machinery would also be eliminated immediately. Tariffs will also go on resources, energy and manufactured goods, while the deal will open the door to new market opportunities for Australian services in education and telecommunications.
