The Prime minister has released an official update concerning the recently signed Japan-Australia Economic Partnership Agreement (JAEPA). This new Free Trade Agreement for Australia is set to cause a major increase in trade between both countries and have a large impact on domestic importing, exporting and the Australian economy. Japan is already Australia’s second largest export and trading partner, accounting for 11% of Australia’s total trade last year equating $69.3 billion.
This figure is set to rise; exporting tariffs on domestic products such as beef, dairy, and wine coupled with reductions to Japanese import tariffs (automotive and electronic goods) will lower market barriers to trade and open opportunities for both countries.
Which products and services does the Japan-Australia Free Trade Agreement apply to
Australia’s lucrative free trade agreement with Japan is historic for our domestic trade industry as it recognises Australia as the first major exporter to unlock Japan’s high import barriers. The importing and exporting tariff reductions will apply to many of Australia’s biggest industries, including
- Agriculture Exporters of beef, seafood, horticulture, sugar, dairy and other related products will not only have taxes reduced but have preferential, duty-free access to the Japanese market
- Industrials 99.7% of these Australian exports to Japan will enter duty-free from the start of the Free Trade Agreements implementation, with the goal of all industrials to become duty-free exports within 10 years
- Energy and Minerals Accounting for 89% of Japan’s total imports from Australia, all duties and taxes on these products will be eliminated upon the Free Trade Agreements full implementation
- Manufactured Products Australia’s $243 million manufactured exports industry to Japan will have their duties and taxes immediately removed upon entry into force
- Services Including financial, educational, legal and telecommunication services will be guaranteed the lowering of export barriers and priority access to the Japanese market
- Investment, IP and Government procurement The Japan-Australia Free Trade Agreement will also incur stronger levels of protection between borders for Intellectual Property, lift barriers to trade for investors in each country and provide services to help Government procurement
Are you not sure whether your products fall under the Japan-Australian Free Trade Agreement? Contact us for individual Customs advice on your goods and services.
What are the effects of the Japan-Australia Free Trade Agreement on Australian importers
Australian consumers will be a big winner with this Free Trade Agreement, with outlines to cut duties and taxes on Japanese automobiles, household and electronic goods. During the 2012-13 period Australia imported $20.6 billion from Japan, with the overwhelming majority ($18.3 billion) being claimed as consumer goods. Lowering of cross-border service trade barriers such as fund management, investment advice and portfolio construction should see an increase of Japanese ventures.
What are the effects of the Japan-Australia Free Trade Agreement on Australian exporters
Within the next ten years over 97% of Australian exports to Japan will gain preferential access and enter duty-free under JAEPA. Once this Free Trade Agreement is introduced, Australian producers and exporters will have little to no import barriers in Japan and a head-start on the competition. This provides domestic exporters with a strong competitive advantage in a wealthy market, supported through last year’s exports to Japan accounting for $48.6 billion (16% of Australia’s overall exports).
Opportunities for Australian industries
For Australia, Japan is a very attractive trade market. Its population of over 127 million makes it the third largest economy in the world and one that already has strong ties with our country. Australia’s new Free Trade Agreement with Japan will strengthen our economy, stimulate jobs, help our farmers, benefit consumers and have major impacts on the supply chain of companies.
JAEPA sends a strong message to Japanese investors that Australia is open for business.
More details on the Agreement are available from BCR or on the Prime Ministers’ website at http://www.pm.gov.au/
How do you think the 2014 Japan-Australia Economic Partnership Agreement will affect your industry?
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For more than a century, 3PL and Freight forwarding service provider, BCR has continued to help small, medium and large businesses achieve an optimum logistics solution with warehousing and transportation, including air freight and sea freight services to and from the major ports including Brisbane, Sydney, Melbourne, Adelaide and Fremantle (Perth).