Australia, Japan Strike Free Trade Deal
April 11, 2014

It was reported this week in international news that after seven years of negotiations a free trade agreement (FTA) was struck between Australia and Japan.

Under the terms of the FTA, the 38.5 percent Japanese tariff currently levied on Australian beef will be halved to 19.5 percent over 18 years. The tariff currently applies to frozen beef. A tariff on chilled beef will be cut to 23.5 percent from 38.5 percent over 15 years.

In separate press releases issued by the National Cattlemen's Beef Association (NCBA) and the National Pork Producers Council (NPPC), concerns about the impact this bilateral agreement between Japan and Australia will have on the Trans-Pacific Partnership (TPP) trade talks were expressed.

"NCBA is deeply concerned that the Bilateral Trade Agreement between Japan and Australia does not call for full tariff elimination," said Bob McCan, NCBA president. "This bilateral agreement undermines the long-standing goals and principles that are the base of the TPP. This development only pushes the high-standing ideals of TPP further out of reach for all countries involved, and it is not a move that U.S. beef producers can support."

"The Japanese need to eliminate tariffs on pork and other U.S. farm products," said NPPC President Howard Hill, DVM. "Japan is asking for special treatment in the form of exempting myriad tariff lines from tariff elimination, yet tariff elimination is the heart of an FTA. We support the efforts of U.S. Trade Representative Michael Froman and our trade team to get the same result from Japan that we have gotten from every other U.S. FTA partner: elimination of virtually all tariffs."

In its FTA deal with Japan, Australia did not get tariff elimination on a number of important products, but a clause in the agreement requires the Japanese to provide the same access to Australia that it provides to other nations. Should the United States get better access to Japan in the TPP negotiations, Australia would get that same access.

The TPP is a regional negotiation that includes the United States, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, which account for nearly 40 percent of global gross domestic product.