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Japan wants resources clause in FTA deal

The Age, Melbourne

Japan wants resources clause in FTA deal

6 July 2007

(AAP) Japan may try to have a specific clause to safeguard its imports of coal and iron ore inserted into any free trade deal with Australia.

Japan is Australia’s biggest export market and the two countries have celebrated the 50th anniversary of the signing of a trade agreement which heralded the start of the profitable relationship.

This year the two countries began negotiations towards a free trade deal, which Australia hopes will give its farmers greater access to Japanese markets, where agriculture is a highly sensitive political issue.

Japan has a strong appetite for Australian commodities like iron ore and coal and hopes a trade deal will help ensure the security of its supply.

"The highest priority on the Japanese agenda ... is the continued stable supply of resources from Australia to Japan, as Australia has been able to do so and is doing so," Japan’s Trade Minister Akira Amari told Australian reporters through an interpreter.

Speaking after the conclusion of a meeting of Asia Pacific trade ministers in Cairns, Mr Amari made it clear that his country’s decision to move forward with the talks and consider agriculture in the deal was highly unusual.

"In the past, Japan, our position has been we will never negotiate any agreement that would allow a lot of imports of farm products into Japan," he said.

"It’s because of the long-standing friendly relationship between our two countries and also because ... we have been getting very good, stable supply of (commodities) from Australia ... (that) the decision has been made in a very bold way (to do this)."

The federal government insists it has no control over the deals mining giants like BHP Billiton and Rio Tinto enter into with Japan for the supply of commodities.

Mr Amari insists Japan isn’t seeking any type of government guarantee.

"We are not seeking guarantees from the government while other countries are paying a higher price and Japan is only paying a low price," he said.

But he said there were precedents for specific clauses dealing with resources in the trade deals Japan had struck with other countries, namely Brunei.

"There is precedence for this and we are negotiating to include it ... in (our deal) with Indonesia," Mr Amari said.

"So we are not seeking a guarantee for business deals but I hope support will be rendered from the Australian government so that some preference will be given to the supplying of resources and food to Japan."

The next round of negotiations is expected in Tokyo later this month.

Mr Amari acknowledged agriculture would be a very sensitive domestic issue for his government.

"Japan certainly has sensitive issues in the agriculture area but on the other hand Japan has a very strong interest in its relationship with Australia," he said.

"Australia is perhaps the most important trading partner for Japan in terms of stable supply of energy and other resources.

"Against this backdrop, Prime Minister (Shinzo) Abe made a decision that (the deal) should be pursued."

Mr Amari was firm that rice would not be part of any agreement but there could be room to move on beef.

"Rice is an extremely sensitive issue for Japan and we will not be able to make a concession on that issue but with respect to beef ... efforts will be made to ensure that there will be expanded imports of Australian beef into Japanese markets," he said.

"In the agriculture area, certainly areas that have to be protected will be protected during the course of FTA negotiations but when we think we can make a concession we will certainly do so."