08.04.2014 Market Access News

Australia signs Free Trade Agreement with Japan

Australia signs Free Trade Agreement with Japan

Australia concluded an historic free trade agreement with Japan yesterday. The agreement has been under negotiation for more than 7 years and was announced with enthusiasm by Prime Minister’s Abe and Abbott in Tokyo.
The FTA is a ‘mixed bag’ for agriculture with some useful gains for some sectors but notably there is no access for Australian rice and the benefits for the grain sector are very modest.
The outcomes for grains are as follows:
Wheat
• Australian Prime White and Australian Hard wheat to be traded through the simultaneous buy and sell system.
• Removal of tariff on wheat for animal feed.
• Market access for wheat (for food) and wheat gluten will be automatically reviewed five years after entry into force, with a view to improving access; and if Japan provides another country a better deal, a review will be automatically triggered with the aim of providing Australia equivalent treatment.

Barley and Malt
• Removal of tariff on barley for animal feed
• duty free Australia-only quota for unroasted malt of 86,000 tonnes (equivalent to our total 2013 trade).
• Market access for barley (for food) will be automatically reviewed five years after entry into force, with a view to improving access; and if Japan provides another country a better deal, a review will be automatically triggered with the aim of providing Australia the equivalent treatment.

Corn – tariffs up to 21.3% on milled corn products eliminated over periods between 5 and 10 years.

Sorghum – 3% tariff eliminated immediately on entry into force.

Oats – 12% tariff eliminated over 7 years.

Buckwheat – 9% tariff eliminated over 10 years.

Pulses – immediately, on entry into force, elimination of 8.5% tariffs on lentils and chickpeas.

Rice – Japan has excluded rice.

Oilseeds and Vegetable Oil

Note, oilseeds currently enter Japan duty-free.

• Canola Oil – 13.2 yen/kg tariff eliminated over 10 years
• Cottonseed Oil – 8.5 yen/kg tariff eliminated over 10 years
• Olive Oil – tariff will be bound at zero
• Mixtures of Oils – 13.2 yen/kg tariff eliminated over 10 years
• Safflower Oil – 8.5 yen/kg tariff eliminated over 5 years.
• Sunflower and Sesame Oils – 10.4 yen/kg and 8.5 yen/kg tariffs eliminated over 7 years
• Linseed Oil – 8.5 yen/kg tariff eliminated over 10 years
• Coconut oil (4.5%), Palm Kernel oil (4%), Palm Oil (3.5%), Castor oil (4.5%) – tariffs will be eliminated immediately on entry into force.
Overall comment: good for sorghum and vegetable oils – not much advantage in any other area, and no movement for our most important products: Noodle Wheat and Malting barley. Very positive that we have the renegotiation clause in after 5 years and equivalent terms if Japan does a better deal with other country after this deal done.