Japan-Australia Free Trade Deal Starts After 7 Year Negotiation

A free trade agreement between Japan and Australia took effect Thursday, with Australia becoming the first major agricultural exporter to reach an FTA with Japan, where the farm sector has traditionally been protected.

Under the agreement, Australian exporters now have greater access to the Japanese beef market, while the deal will also benefit Japanese automakers with the abolition of 5 percent Australian tariffs on imports of Japanese automobiles.

The entry into force of the deal “represents an historic development in economic relations” between the two countries and “lays the foundation for the next phase of bilateral economic relations,” Japanese Prime Minister Shinzo Abe and Australian Prime Minister Tony Abbott said in a joint statement.

Australia is the largest trade partner among countries with which Tokyo has concluded free trade deals. Abbott and Abe announced a broad agreement last April after seven years of negotiations.

Japan will lower its tariffs on Australian beef by up to half incrementally from the current 38.5 percent. Duties on frozen beef, mainly used for processed food for restaurants, will be cut to 19.5 percent over 18 years and those for chilled beef, sold in supermarkets, to 23.5 percent over 15 years, up to certain amounts.

For the first year, tariffs have been set at 30.5 percent for frozen beef and 32.5 percent for chilled beef, the Japanese farm ministry said.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza