Australia and Japan today agreed to sign a free trade agreement, following seven years of negotiation.
The landmark deal means Australia is the first major agricultural exporting economy to reach a liberalising agreement with Japan.
At a press conference in Tokyo this evening, Prime Minister Tony Abbott described the deal as historic and momentous, releasing a joint statement with Trade and Investment Minister Andrew Robb detailing a range of benefits for the agriculture sector, especially beef, cheese, horticulture and wine.
We already know the tariff on imported cars will go, saving Australians up to $1500.
Tariffs on household appliances and electronics are gone. The PM says Australian financial, education, telecommunications and legal services providers will gain new access to the Japanese market.
Tariffs on wool, cotton, lamb and beer will be bound at zero.
But Japan will continue to protect its rice farmers from Australia, which exports up to 80% of its crop.
The $1.4 billion beef export industry – Australia’s largest agricultural export to Japan – seems to be the biggest winner, with tariffs on frozen beef, nearly halved over the next 18 years (2032), from 38.5% to 19.5%. There’s an 8% cut in first year, then 2% the second year and 1% in the third.
The tariff on fresh beef will drop to 23.5% over 15 years (2029). The tariff will be cut by 6% in the first year, followed by two annual 1% cuts.
Mr Robb says it has the potential to add $2.8 billion to industry.
Australia will have a huge advantage over other exporting nations.
Tariffs on canned products such as tomatoes, peaches and pears, plus fruit and vegetable juices, are gone.
The tariff on cheese, a $372 million export, remains, but the quota on duty-free cheese rises to 20,000 tonnes.
Australia’s $226 million sugar export industry will see the tariff on premium sugars eliminated and the levies reduced for standard raw sugar.
- Tariffs on bottled, sparkling and bulk wine will be eliminated over seven years.
- Barley exporters will have increased duty-free access.
- Tariffs on canola and other vegetable oils will go.
- Tariffs on shrimps and prawns, rock lobsters, abalone (fresh or preserved), oysters, crabs, yellowfin tuna, toothfish, sea urchins and fish oils and southernbluefin tuna will be eliminated.
- Around 95 per cent of Australia’s chocolate exports will enter Japan duty-free or at a reduced tariff rate.
- Australian honey producers will receive an Australia-specific quota that will rise over time, with the tariff eliminated over 10 years.
- Australia will have preferential access for a large volume of pork and pork products.
- Iron ore, coal and LNG are already imported into Japan duty-free. All remaining tariffs on energy and mineral products will be eliminated within ten years, this will include which coking coal, petroleum oils, aluminium hydroxide and titanium dioxide.
- The threshold at which Australia’s Foreign Investment Review Board will screen Japanese investments will also be raised from $248 million to $1.078 billion for non-sensitive sectors. Australia has reserved the right to review agricultural land and agribusinesses investments at lower levels.
Tomorrow, Prime Minister Tony Abbott moves on to South Korea to sign a Free Trade Agreement with that nation in Seoul.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.