AAP | 8 July 2014
FTA opens up Japan’s $5 trillion market
The financial services industry appears to be a winner under the landmark free trade agreement negotiated between the Abbott government and Japan.
While Australia’s financial sector is under a bit of a cloud from the scandal surrounding Commonwealth Bank financial advisers and the government’s row in trying to make adjustments to financial advice laws, it has scored in the deal with Japan.
Business Council of Australia chief executive Jennifer Westacott believes the overall agreement signed by Prime Minister Tony Abbott and Japanese Prime Shinzo Abe on Tuesday in Canberra will give Australian exporters better access to Japan’s huge $5 trillion market.
She said Japan has provided better outcome to Australia than any of its other trade agreements and was particularly encouraged by its commitment to Australia’s financial services, a first in any such deal.
"With one in five Australian jobs related to trade, the benefits from important agreements like this reach far into the community," Ms Westacott said in a statement.
Financial Services Council chief executive John Brogden said Japan has guaranteed Australia cross-border access for Australian fund managers to provide investment advice, portfolio management services and trade in wholesale securities transactions.
"Japan has an ageing population and one of the world’s largest financial services markets. It is a significant trading nation for Australia," Mr Brogden said.
The Australian Mines and Metals Association said the FTA was perfectly timed with Australia emerging as a "global powerhouse" of liquefied natural gas production and Japanese energy demand likely to increase exponentially.
"It is vital that after a record decade of resource project investment that Australia positions itself to be a primary supplier of energy to the major economic power of the Asia Pacific region," it said in a statement.
Australian Industry Group chief executive Innes Willox said signing the FTA with Japan now was significant when Australia’s competitors - New Zealand, the European Union, the US and Canada - yet to finalise their trade negotiations.
However, he said for manufacturing, the removal of Australia’s remaining tariffs on imports from Japan will be of mixed benefit.
On one hand, it will lower costs for producers who use Japanese components as part of their supply chain.
"On the other hand, manufacturers will face increasing pricing competition from cheaper Japanese goods," Mr Willox said.