It’s a deal

8 April 2014

Japan has taken the first step towards addressing its own food security issues by striking a new trade deal with Australia, an ANU expert says.

The new deal allows for a previously immovable 38.5 per cent Japanese import tariff on frozen beef to be halved to 19.5 per cent over 18 years, with deep cuts in the first year.

At the same time Australia will scrap five per cent tariffs on Japanese electronic and household goods.

It doesn't matter that the tariff hasn't been completely removed - Japan has taken the first step towards securing its own food security, ANU College of Asia and the Pacific trade specialist Dr Andrew Stoeckel says.

The economist, who is based in the College's Crawford School, believes Japan - a "very inefficient" producer of agriculture products -should also lower trade barriers with other countries, to enable it to make all round gains.

"If they lower their barriers for food imports, the cost of food becomes less, and then that gives Japanese consumers more money to spend on other things in the Japanese economy," he said.

"And that stimulates activity in other areas where they have a relative advantage.

"Then they will become richer and better able to service their debts so they can restore their economy to full health."

The deal comes after seven years of negotiations between Japan and Australia.

Aside from beef, it presents significant advantages for other Australian agricultural products including fruit and vegetables, seafood, sugar and wine.

The duty-free quota for cheese - Australia's single largest dairy export to Japan - will be boosted form 27,000 tonnes per year to 47,000 tonnes annually.

Japanese food security issues stem back to the end of the Second World War, when people were reduced to eating bark from trees, Stoeckel points out.

"They import much more food than they produce themselves," he said.

"And so, they have got to be assured of a reliable food supplier as well."

It was a concern that Australia stopped importing live beef to Indonesia over animal welfare concerns in 2011.

"People use food as a weapon, and that forces these countries to worry about food security,"said Stoeckel.

"We've got to be a reliable supplier."

Australia's mutual dependence on Japan would help address any concerns, given the Australian car manufacturing sector had become almost non-existent.

"It doesn't matter if we do not make our own motor cars here, if we rely on the Japanese, because they are reliant on us for food," Stoeckel said.

Story by Belinda Cranston.