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Japan on verge of signing FTA

The Australian

Japan on verge of signing FTA

Nigel Wilson

May 04, 2006

AUSTRALIA is preparing to move ahead with a free-trade agreement next year with its most important trading partner, Japan, on the 50th anniversary of the ground-breaking treaty of commerce between the two countries.

Australia’s ambassador in Tokyo, Murray McLean, said yesterday that rapid progress had been made on a year-long joint study into the practicalities of the agreement.

Speaking at a Perth business breakfast, Mr McLean warned that Australia should not ignore Japan’s continuing economic and strategic significance in the enthusiasm for developing economic relations with China and India.

Agricultural exports to Japan such as rice and meat were no longer as contentious as they once were, while Japan saw benefits in Australia liberalising rules concerning Japan’s manufactured exports and capital investment controls, he said.

The ambassador said he believed it possible for an FTA to be completed in the year marking the 50th anniversary of Australia’s original trade agreement with Japan, signed by trade minister John McEwen in 1957.

Mr McLean said it was unlikely China would surpass Japan as Australia’s most important trading partner for at least a decade.

Last year, Australian exports of goods and services to Japan were worth about $32 billion, which amounted to roughly 18 per cent of Australia’s exports.

"This is 80 per cent higher than our exports to China and 2 1/2 times greater than we send to the US," the ambassador said.

"The proposition that Japan has been taken over by China is just nonsense."

Mr McLean said that with 3per cent economic growth in the year to the end of March and growth of a similar size forecast for this financial year, Japan was clearly emerging from 15 years of lacklustre performance.

"There is a palpable sense of confidence in Japan now, almost for the first time in a decade," hesaid. "It is exciting to be living there."

Mr McLean said much of Japan’s recovery had to do with the spirit of competition it was having with China for influence in the region.

The probability of a free-trade agreement, referred to in Japan as an economic partnership agreement, would focus Australia’s attention back on Tokyo, he said.

 source: The Australian