Dairy loses but grocery and beef gains in Australia-Japan free trade deal

The Australian Dairy Industry Council has criticised the proposed Australia-Japan free trade agreement, stating the agreement has fallen well below industry expectations.  

ADIC deputy chairman, Robert Poole said that the agreement (which was announced by prime minister Tony Abbott last night) provided ‘no meaningful benefit’ to the Australian dairy industry.

“We are extremely disappointed with the deal announced this evening by the Prime Minister,” said Poole .

“We were hopeful Government had heeded the industry’s message in regards to freeing up market access in Japan, however it now appears our words fell upon deaf ears."

According to the ADIC, the industry would only stand to gain $4.7m in the first year of the deal’s implementation, which would then rise to an estimated $11.6m by 2031, The Weekly Times reports.

“There has been no movement in this agreement on fresh cheese – the number one objective for Australian dairy, with tariffs to remain at 29.8 per cent. A successful outcome on this tariff line would have delivered approximately $60 million in tariff savings – instead we have received nothing and the tariff stays in place.

“While Most Favoured Nation status has been put in place for cheese in Trans Pacific Partnership agreements, the exclusion of all other product lines leaves us vulnerable to one of our competitors reaching a more wide-ranging deal with Japan, that could leave the Australian dairy industry worse off.

“This has been an agreement over six years in the making and sadly from the dairy industry’s perspective, will end up providing no meaningful benefit."

In contrast to the dairy industry, both the Australian beef industry and the Australian Food and Grocery Council (AFGC) have welcomed the deal, with AFGC CEO, Gary Dawson stating that the agreement will provide a valuable boost for Australia’s food and grocery exports.

"Australia is the first developed nation to secure an FTA with Japan so instead of playing catch-up with our competitors we are leading the way," said Dawson.

"It has been a difficult negotiation because of Japan's resistance to opening its market in key agricultural products. Any gain in these sensitive areas is hard fought."

Dawson acknowledged that not every Australian commodity (ie dairy) has achieved what they had hoped to achieve from the negations.

"No party ever gets everything they want from trade negotiations and this FTA is no different, with modest gains for some of Australia's key commodities,” he said.

"However, failure to finalise a deal would mean Australia faced losing market share to competitor countries in a key market.

“Japan is Australia’s third largest investor, with an investor stock of $126.4 billion, and recently this investment has extended to sectors including food and agribusiness. Australia’s global competitiveness will be greatly enhanced if this FTA leads to an acceleration of investment in strategic sectors such as food and agribusiness."



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