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Japan Free Trade Agreement Boosts Sales of Australian Beef

09 April 2014
Meat & Livestock Australia

AUSTRALIA - The Australian beef industry will benefit significantly from tariff reductions under the Australia / Japan Free Trade Agreement (AJFTA) announced by Prime Minister, Tony Abbott.

Over the next 20 years sales of Australian beef to Japan are expected to rise by $5.5 billion as a result of the AJFTA.

Over the life of this agreement this boost in sales will increase the annual gross value of Australian beef production by up to seven per cent.

“Under the AJFTA over a period of 18 years, tariffs on frozen Australian beef entering Japan will drop from 38.5 per cent to 19.5 per cent, and for chilled beef, drop from 38.5 per cent to 23.5 per cent over 15 years,” Chairman of the Beef Industry’s AJFTA Taskforce Lachie Hart observed.

“This will create opportunities for increased Australian beef sales into Japan and improve the affordability of beef to Japanese consumers.

“Pleasingly the tariff reductions on both frozen and chilled Australian beef have been ‘front loaded’ meaning that major reductions will occur in the first few years of the agreement. Significantly, tariffs on Australian frozen beef will drop by eight per cent in the first year and for chilled will drop by six per cent.

"This represents a major change in the trading environment to Japan in the first year of the AJFTA,” Mr Hart said.

Mr Hart thanked the Prime Minister, the Minister for Trade and his negotiating team for their efforts in what had been difficult negotiations.

“The Australian beef industry stands to benefit substantially from trade agreements entered into with Korea and, now, Japan under this Government,” Mr Hart said.

“Almost 70 per cent of all Australian beef produced is exported, so positive outcomes on trade negotiations are enormously beneficial for the industry.

“We wish to congratulate the new Government for the outcomes being achieved on freer trade,” Mr Hart said.

Mr Hart expressed the hope that the AJFTA would accelerate the process of agricultural reform in Japan.

“Hopefully the successful completion of an AJFTA will be the harbinger of further liberalisation of the beef market into Japan, with tariffs being eventually eliminated and other impediments on the trade removed.

“We understand that the Australian Government achieved the best result it could for the Australian beef industry given this is the first deal Japan has done with a major agricultural exporter – and we are pleased with the progress made.
"However, we hope that this outcome represents a first step, with the industry seeking further gains through future trade reform efforts with Japan via the Trans-Pacific Partnership and Regional Comprehensive Economic Partnership negotiations.

“We wish the Minister further success in these future negotiations,” Mr Hart said.
Australia’s red meat industry employs approximately 200,000 people in the farming, processing and retail sectors and contributes A$17 billion to Australia's economy each year.

Japan is Australia's largest beef export customer in volume and value terms, taking 26 per cent (288,795 tonnes) of all beef exported in 2013 worth $1.4 billion in export returns.

By volume and value, beef is Australia’s largest export to Japan that is subject to significant trade impediments.

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