Business, rice farmers beg to differ on Japan FTA

09 April, 2014

Tony Abbott announced this week (Monday, April 7) Australia had finally struck a historic trade deal with Japan, a move that will allow a number of local industries – most significantly agriculture – to add billions to Australia's economic growth.

Locally the deal will see trade barriers slashed for food exports, and also allow for potentially stronger trade in resources and services. In return, Australia will reduce the price consumers pay for Japanese car and automobile components, whitegoods, and electronics – a majority of which will be free of tariffs within the time-span of the deal being sanctioned.

The Business Council of Australia (BCA) have joined the coalition who have embraced the deal, with BCA President Catherine Livingstone labelling it "a major milestone for one of Australia's most important bilateral agreements", according to a statement released on Tuesday.

"The Japan–Australia Free Trade Agreement will reinvigorate and strengthen an already critical bilateral relationship by providing a modern commercial framework for increased trade and investment," Livingstone said.

"As Australia's largest trade partner for much of the last four decades, and the third largest foreign investor in Australia, Japan has long been a significant source of the capital and markets needed to develop key Australian export industries, including coal, iron ore and LNG.

"An effort now needs to be made to push ahead with implementation, which is a task for both government and business.

"The highly complementary nature of our economic relationship should provide significant gains for both sides.

"For Australia this means more access for agri-producers, services providers and investors to the large, affluent Japanese market, and Japan will benefit from greater food and energy security and greater access to investment opportunities in Australia."

'Extremely disappointing' for some

Despite the general chorus of approval from most corners of industry, there was one group who felt short-changed by the outcome.

Having been excluded from deal, the Ricegrowers' Association of Australia (RGA) said they were "extremely disappointed" with the announcement, according to a statement.

This was despite, according to RGA President Les Gordon, the rice industry working closely with the government to develop a range of options for inclusion deal which would have delivered "commercial benefits" to industry.

"The Australian government seems unable or unwilling to even acknowledge rice in any statements about the agreement," Gordon said. 

"Australian rice growers are recognised as the most efficient in the world. 

"This announcement punishes Australian growers by preventing expansion into this important market for our high quality specialty rices and our value added rice food products.

"We have strongly supported the Australian government's efforts to finalise these trade agreements but only if they are comprehensive, and do not exclude any agricultural products.

"Given that rice has been excluded in the Korea FTA and the Japan Trade Agreement our industry is calling on the Australian government to ensure that we have access to China. 

"The same cultural sensitivities do not apply in China and they already import more than 6 million tonnes of rice annually.

"Australian rice technically already has access to the Chinese market under World Trade Organisation rules but we have been waiting for protocols to be finalised for more than six years to actually gain access. This should now be completed as a matter of urgency."

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