JAEPA Entered into Force on January 15

Japanese Prime Minister Shinzo Abe and Australian Prime Minister Tony Abbott warmly welcomed the entry into force of the Japan-Australia Economic Partnership Agreement (JAEPA) on 15 January 2015. JAEPA is described by the two prime ministers as a historic development in economic relations between Japan and Australia and the most significant bilateral economic agreement since the 1957 Agreement on Commerce.

Prime Minister Shinzo Abe and Prime Minister Tony Abbott signed the agreement during an official ceremony at Parliament House in Canberra, Australia on 8 July 2014. “JAEPA lays the foundation for the next phase of bilateral economic relations, and will strengthen “the special strategic partnership” between Japan and Australia,” the two ministers said in a joint statement.

JAEPA is the most liberalising bilateral trade agreement that Japan has ever concluded, providing Australian exporters, importers, investors and producers a significant advantage over their international competitors. It will significantly improve access to the world’s third-largest economy for Australian business.

JAEPA is expected to deliver significant economic benefits to both countries, through increased trade in high-quality goods and services, an easing of bilateral investment restrictions and promoting economic growth.

With the commencement of the Free Trade Agreement, Minister for Trade and Investment Andrew Robb is encouraging businesses to explore potential export opportunities with Japan. “From January 15 high tariffs on our beef exports have been immediately cut by around one fifth – with further cuts to come on 1 April – while a range of Australian agricultural exports will enter Japan duty free, including prawns, lobsters, asparagus, cherries, grapes, macadamia nuts and almonds. Duty free quotas on cheese are also in place.” Mr Robb said.

JAEPA also guarantees access to the Japanese market for a range of Australian service suppliers, including financial, legal, education and telecommunications services.

Along with export opportunities, Mr Robb said JAEPA presents benefits for consumers, with cheaper import prices on a range of goods, including cars, white goods and electronics. “We’ve already begun to see the benefits to Australian consumers of cheaper Japanese cars, with three manufactures reducing the cost of ‘family’ sized cars by up to $2600, with savings of up to $7600 for higher-end models,” Mr Robb said.

Australian businesses are encouraged to use a step-by-step guide to accessing preferential tariffs on exports to Japan. The guide is available at: www.dfat.gov.au/fta/jaepa/fact-sheets/guide-to-using-jaepa-to-export-and-import-goods.html

Two-way trade between Japan and Australia stood at $70.8 billion in 2013, more than 10 per cent of Australia’s total trade. Japan is a vital, long-standing and highly complementary trading partner for Australia. Japan is the third-largest investor in Australia, with investment stocks worth over $130 billion in 2013. Japan is Australia’s sixth-largest investment destination.

Resource companies such as Woodside, Mitsui and Co, MMG, Centennial Coal, and Newmont Mining have shown strong support for the agreement, highlighting the enormous potential for increased investment. The two agreements ensure that tariffs on Australian coal and iron ore exports to Japan are locked in at zero.

JAEPA benefits at a glance

• More than 97 per cent of Australia’s exports to Japan will enter duty-free or will receive preferential access when JAEPA is fully implemented.

• JAEPA will slash prohibitive agricultural tariffs on a wide range of products to Australia’s second-largest agricultural export market, including rapid tariff reductions for beef, Australia’s largest agricultural export to Japan.

• JAEPA eliminates tariffs on all of Australia’s current minerals, energy and manufacturing exports.

 • JAEPA guarantees Australian service providers outcomes equal to or better than the best commitments Japan has made in any of its other trade agreements

 • Under JAEPA, both governments will support work towards enhanced mutual recognition of professional qualifications.

• JAEPA will promote Japanese investment in Australia by raising the screening threshold at which private Japanese investment in non-sensitive sectors is considered by the Foreign Investment Review Board.

• Australian innovators will enjoy levels of protection for their intellectual property in Japan broadly equivalent to protections provided in Australia.