Australia is close to securing a free trade deal with its second largest trading partner, Japan.
As The Australian Financial Review (AFR) reports, progress on access to Japan’s tightly protected agricultural sector has meant that a deal is now close to completion.
Originally, Australia had pushed to abolish all tariffs but a compromise has meant that Japan will be able to retain tariffs on rice but reduce tariffs on other agricultural goods such as beef and dairy products.
On the other side, Australia is aiming to retain its five percent tariff on Japanese cars which currently raises $940 million a year.
The Department of Foreign Affairs and Trade said on Wednesday that the text of the FTA is close to completion. However, some issues around final market access and investment have yet to be resolved.
“The government is working hard to conclude an FTA . . . as soon as possible and negotiations are at an advanced stage,’’ a spokesperson told the AFR.
Australia's two-way trade with Japan is worth up to $71 billion a year. A feasibility study which was completed before negotiations between the two countries estimated a deal would add $39 billion to Australia’s gross domestic product over 20 years.
Australia has been aiming to complete the deal before Japan formally joins the US-led Trans-Pacific Partnership. This trade bloc includes 11 countries and more than 700 million people. It would be worth $US20 trillion.