logo logo

Japan keeps rice out of free trade proposals

The Age, Melbourne

Japan keeps rice out of free trade proposals

By Tim Colebatch, Cairns

7 July 2007

Japan’s trade supremo Akira Amari has ruled out opening up the country’s rice market in a free trade agreement with Australia, saying Japan’s aim is to secure a deal that covers "90 per cent" of trade between the two countries.

The Economy, Trade and Industry Minister said while it was "an historic, epoch-making undertaking" for Japan to negotiate for free trade with Australia, one of the world’s biggest agricultural exporters, it would not lead to free trade in all products.

"There is a general principle that sensitive issues for the parties to an agreement be respected, but more than 90 per cent of trading volume should be liberalised," he said.

"That applies to Australia too. We will respect that principle, and try to make efforts to liberalise 90 per cent of our trade.

"The areas that have to be protected will be protected."

Mr Amari declined to draw a direct parallel with the exclusion of sugar from Australia’s FTA with the United States, but it was only after the Howard Government backed down on sugar that Japan changed its mind about negotiating with Australia.

The future of the Australian rice industry has become clouded anyway as water supplies shrink and water reforms have adopted the principle of charging market prices to irrigators.

Mr Amari’s remarks came after a meeting in Cairns of trade ministers of the Asia-Pacific Economic Co-operation forum, including himself, floated the idea of linking up the bilateral and plurilateral trade agreements between APEC nations, possibly merging them into one.

US Trade Representative Susan Schwab, who pushed for APEC to negotiate its own FTA as the Doha Round negotiations head into the night, said while ministers agreed an APEC FTA would be "a viable long-term prospect", in the short term there could be smaller steps towards that goal.

These could include:

■Negotiating a "pathfinder" FTA between the states keen to do so.

■Harmonising the separate agreements by applying common standards to key components such as rules of origin.

A pathfinder agreement, which New Zealand Trade Minster Phil Goff advocated this week, would provide a way to satisfy the conflicting wishes of the free traders with those of nations concerned to shield their industries.

NZ has pioneered such an idea through the P4 partnership linking FTAs between Brunei, Singapore, NZ and Chile. The US, Australia and Mexico, all avid negotiators of FTAs, are obvious candidates for a larger model.

Australia has FTAs with NZ, Singapore, Thailand and the US, and is negotiating or contemplating deals with China, Japan, the 10-member Association of South-East Asian Nations, Malaysia, Indonesia, Korea and Chile, as well as Saudi Arabia and the smaller oil sheikdoms and emirates of the Persian Gulf.

Australia’s Trade Minister Warren Truss, who chaired the Cairns meeting, said ministers were unanimous that their priority was to secure the successful completion of the Doha Round. But he said they did not discuss the gaps dividing the World Trade Organisation’s 150 member states.

The WTO announced that the chairmen of its committees on agriculture and manufactured goods would table their compromise proposals in mid-July. Members will meet briefly in late July to respond, then return in September for negotiations.