The Australian | April 19, 2013
Cars and cattle clash on Japan free trade agreement
BY: RICK WALLACE AND ANDREW FRASER
AUSTRALIA’s meat exporters believe they are being sacrificed for the benefit of the car industry as negotiations for the Australia-Japan free trade agreement draw closer to conclusion.
A cars-versus-cattle row has broken out in the final stages of the FTA negotiations, with the beef industry saying it is being disadvantaged by Australia’s insistence on keeping the 5 per cent tariff on vehicles imported from Japan.
The beef export industry believes this is driving Tokyo to play hard ball on reducing the 38.5 per cent tariff that applies to the $3 billion a year worth of products it exports to Japan each year. Japan is Australia’s largest export market for beef, accounting for one-third of all export sales last year.
Lachie Hart, the chairman of the industry’s Japan Market Taskforce, said: "We are just concerned that we are not going to get the best deal for beef under these arrangements.
"The Australian beef industry has rejected the offer that’s been provided to us (by Japan). They have offered reductions in tariffs for a limited volume of beef products over a limited period of time."
The industry believes that the Australian government will not reduce the 5 per cent vehicle tariffs — as sought by Japan — during an election year in which the car industry is staggering under the impact of the high Australian dollar.
Those involved in the beef industry expect a tough battle to ensure they can gain competitive access to Japan’s markets.
Karwee feedlot manager Brad Robinson said about 11,000 head of cattle go through the facility in Queensland’s Darling Downs, all headed for the overseas market.
"Japan’s still one of our major markets but we’re going to have to fight hard to make sure it stays as one," Mr Robinson said.
Australia imported $10bn worth of cars from Japan in 2010, netting the commonwealth about $500 million in revenue. The total value of commonwealth revenue from vehicle imports each year is about $1bn. "Obviously with a Labor government, the car industry is a very politically sensitive for the current minister," Mr Hart said.
"Recently General Motors’ decision to offload some staff has certainly made it more sensitive. I understand that totally, but the beef industry is enormously important to the Australian economy and it provides jobs in remote and regional Australia.
"What we are asking is for the Australian government to continue to fight for us."
The Australian and Japanese governments have spent six years negotiating the FTA and are hoping to finalise the deal in coming months, before attention turns to the multilateral Trans-Pacific Partnership trade bloc negotiations aimed at creating an Asia-Pacific free trade zone.
While the proposed FTA is far broader than simply agriculture and vehicles, these are the remaining sticking points, with Australian producers pushing for reductions in high tariffs on dairy, sugar and wheat exports as well as beef.
Mr Hart said he would not go into the details of the Japanese offer on the FTA, but The Australian understands it involves taking the current tariff from 38.5 to 30.5 per cent over 10 years for a limited quota of imports — well short of what the meat industry wants.
The chairman of the Red Meat Advisory Council, Ross Keane, said: "Any proposal that allows Japan to retain high tariffs on imports of Australian beef will be vigorously opposed by Australian cattle producers and meat processors."
The Federal Chamber of Automotive Industries avoided commenting on the tariff issue yesterday.
Trade Minister Craig Emerson said the government "won’t be conducting a running commentary on negotiations with Japan". A spokesman for Japan’s Ministry of Foreign Affairs also declined to comment on the specifics of the negotiations for the FTA.