[A2k] FT on implications of Australia-Japan FTA: Japan-Australia trade deal is dismissed by the US

Thiru Balasubramaniam thiru at keionline.org
Tue Apr 8 03:47:00 PDT 2014


Last updated: April 7, 2014 6:03 pm

Japan-Australia trade deal is dismissed by the US

Shawn Donnan in London, Jamie Smyth in Sydney and Ben McLannahan in Tokyo

Australia and Japan sealed a bilateral trade deal giving Australian farmers
much greater access to one of Asia's biggest markets on Monday but quickly
found themselves drawing US scorn over what it meant for a bigger Pacific
Rim pact.


But its bigger strategic impact may be in what it means for the far
larger Trans-Pacific
being negotiated by the US, Japan, Australia and nine other countries.

Tokyo quickly seized on its deal with Australia as an example of how to
unlock a stalemate<http://www.ft.com/cms/s/0/224c052a-9df8-11e3-95fe-00144feab7de.html>
the US over agricultural products holding up the broader TPP talks. The US,
however, was downright dismissive, declaring it "significantly less
ambitious than what leaders agreed to seek in the TPP".


While Mr Abe declared his intention to take on agricultural interests at
home by joining the TPP negotiations last year, he has also pledged to
protect five "sacred" agricultural areas, including beef and rice from
foreign competition. That, together with heavy pressure from influential
farm and auto lobbies in the US, has caused the current deadlock in the TPP.


But lobbyists in Washington, which has been pushing for the wholesale
elimination of tariffs within the TPP, are unlikely to be so welcoming. A
deal on beef in particular will displease US negotiators and the US
industry as it would reduce tariffs only slowly and even then leave
significant barriers in place to imports after that.

More importantly, the Australian deal looks very much like the sort of
compromise Japan has been pushing for in the TPP talks.

Under the agreement with Canberra, Japan's 38.5 per cent tariff on beef
imports will be only slowly reduced. The tariff on frozen beef imports will
be cut to 19.5 per cent on implementation of the deal. But the tariff on
fresh beef imports will only be cut to 23.5 per cent over 15 years.

n an interview with Australian TV, Andrew Robb, the trade minister,
insisted the deal would give the country's "beef industry the jump on every
other beef exporter in the world". He also said Australian negotiators
"have delivered I think more than what was expected in a whole range of
other agricultural areas".

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