Sydney Morning Herald
Australia, Japan agree FTA study details
September 21, 2005
Australia and Japan have finalised the details of a planned free-trade feasibility study, Trade Minister Mark Vaile has said.
But despite the breakthrough, Mr Vaile cautioned that any deal on a free trade agreement (FTA) was still a long way off and faced political hurdles.
Australia and Japan agreed earlier this year to conduct a feasibility study.
"Both countries have now agreed on detailed terms of reference to examine the feasibility of a comprehensive FTA covering a number of issues including trade in goods and services, investment and intellectual property rights," Mr Vaile said in a statement.
"I am confident the study will highlight the benefits an FTA would bring to both our economies, and further cement the special nature of our relationship with Japan.
"An FTA would mean clear benefits to Australian business."
Japan is Australia’s largest trading partner, with two-way trade between the countries worth almost $40 billion.
Mr Vaile said economic modelling suggested a free trade agreement would boost Australia’s economy by $39 billion over the next 20 years, and $27 billion for Japan.
But there are serious concerns that Japan would refuse to open its heavily protected agricultural markets, which would deliver the greatest benefits to Australia.
Mr Vaile conceded a final agreement might be a long way off.
"If the study concludes that Australia and Japan should proceed to negotiate an FTA, we need to be realistic that any negotiation will require a firm political commitment on both sides," he said.