Janelle Saffin (Page, Australian Labor Party) Share this | Hansard source

On behalf of the Joint Standing Committee on Foreign Affairs, Defence and Trade I present the trade subcommittee's report, entitled Australia's trade and investment relationship with Japan and the Republic of Korea. The committee welcomed the opportunity to examine Australia's relationship with two of our most important trading partners. I will first turn to Japan.

The importance of the Australia-Japan relationship should not be obscured by the rise of other countries. Japan was Australia's number one trading partner for over 40 years, and today remains second only to China. In that time Japan has made a significant contribution to Australia's prosperity, originating with its investment in the resources and energy sector in the 1960s.

Today Japan is Australia's third-largest source of foreign investment, totalling $123.4 billion in 2011. It is also Australia's second-largest market for food and agricultural products, with safe, high-quality food and reliable supply from Australia making a significant contribution to Japan's food security. On the other side of the ledger Japan is Australia's third-largest source of imports, with products such as cars and manufactured goods in high demand by Australian consumers.

Today Japan is moving toward trade liberalisation and agricultural reform, including negotiating a free-trade agreement with Australia. This agreement is a significant milestone: Japan's first with one of its top six trading partners, and first with a major developed economy.

The committee strongly supports the FTA, or free-trade agreement, negotiations. The services sector is one area expected to benefit from the FTA. Education and tourism are two of Australia's most important services exports. The committee supports efforts to attract more visitors and international students to Australia. The committee heard that Australia's particular expertise in financial services is being increasingly recognised in Japan, a country with the world's second-largest pool of investable wealth. Both countries' expertise is also being capitalised upon in investment projects, and in particular through joint ventures in third countries.

The committee has recommended that the government showcase the marketing of Meat and Livestock Australia in its export facilitation activities. In the committee's view, approaches like that of MLA's 'Aussie Beef' promotion can reduce competition between individual Australian brands, improve customer awareness and tap into Japanese perceptions of Australian food as safe, high-quality products.

I turn now to the Republic of Korea. Korea is Australia's fourth-largest trading partner, and a country with which Australia shares a longstanding and complementary relationship. After the Korean War, Australian exports of raw materials supported Korea's industrial development from the 1960s onwards. Indeed, energy, minerals and metals exports continue to be the bedrock of the ongoing relationship.

The committee heard about significant growth in Korean investment to secure Korea's ongoing energy needs. Korean companies are taking increasingly large stakes in a number of Australian resources projects. With 70 per cent of its food needs met from imports, Australia also has an important role to play in Korea's food security—providing safe, high-quality food to our fifth-largest agricultural export market. In turn, Australia continues to demand Korea's consumer products, including cars, electronics and refined fuels.

Korea's active free-trade agreement schedule, including negotiations with Australia, occupied a central role in our inquiry. With Korea's FTAs in force with the United States and European Union, the committee was concerned about the implications of ongoing delays in concluding our own agreement. Considerable attention has been given to the implications for Australia's beef exports to Korea, our third-largest beef export market, as well as other outstanding issues, such as investor-state dispute settlement. I thank the trade subcommittee, and particularly my deputy chair, the honourable member for Maranoa—can I get an extension, Speaker?

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