Paul Neville (Hinkler, National Party) Share this | Link to this | Hansard source

My question is addressed to the Deputy Prime Minister and Minister for Trade. Would the Deputy Prime Minister inform the House on how Australia’s economic relationship with Japan is improving our exports, creating jobs and keeping our economy strong?

Mark Vaile (Lyne, National Party, Minister for Trade) Share this | Link to this | Hansard source

I thank the honourable member for Hinkler for his question. He represents an electorate on the coast of Queensland and would recognise the significant importance of the close relationship between Australia and Japan, given that the services sector is our largest export earner and that inbound tourism from Japan is a very important component of the earnings in the electorate of Hinkler.

Japan is the largest economy in Asia and our largest trading partner, and in 2005 that trading relationship was worth a record $50.7 billion. It is the most significant trading relationship we have. Exports to Japan alone rose by 24 per cent in 2005, to stand at $31.5 billion. Some of the more important sectors in that export effort were minerals and fuels, for example, which set a record in 2005 of $15.6 billion. A lot of those exports were obviously from Western Australia, but they are very important in the overall structure of our economic relationship with Japan.

In recent years the beef industry has been the single largest recipient of benefit from our relationship with Japan. Last Friday I was in Rockhampton for the Beef Australia Expo 2006—I am sure the member for Capricornia, if she is here, also supported the expo—and had the opportunity to talk with many beef producers and processors there about what has happened in the global beef market. We are reaching for an export figure of $5 billion in toto for the beef industry. I am sure that when the member for Hotham was there he was apprised of how well the beef industry is going in exports.

Peter McGauran (Gippsland, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

Mr McGauran interjecting

Mark Vaile (Lyne, National Party, Minister for Trade) Share this | Link to this | Hansard source

Yes, he should be the shadow agriculture minister. Beef exports to Japan stood at $2.4 billion in 2005. In value terms, almost half of the beef that we export goes to Japan. Those industry leaders who were in Rockhampton last week made mention of this to my colleagues the Minister for Agriculture, Fisheries and Forestry and the Minister for Transport and Regional Services. They want the government to maintain its agenda and ensure that we keep these markets open and that these industries remain competitive on the world stage.

Japan is also our largest market for liquefied natural gas. LNG exports to Japan are now worth a record $3.8 billion. LNG is a huge opportunity for export growth in the future for Australia, and Japan will be one of our key markets for those exports. LNG export volumes are set to double to around 20 million tonnes per annum by 2011. Members would be aware that in coming weeks the first shipment of LNG in the $25 billion contract with China will leave the North West Shelf to travel to China, adding to the exports of this valuable resource that we are already achieving to Japan and Korea. By 2020 Australia will be one of the world’s largest LNG producers and exporters, with exports worth hundreds of billions of dollars.

The government is not prepared to take the relationship with Japan for granted. We are not prepared to just pocket it and expect that it will always be there. We need to continue to nourish and develop it to try to make it grow. That is why, after the Prime Minister’s visit to Japan last year, we launched a feasibility study into a free trade agreement with Japan. We have now agreed with Japan to expedite the completion of that feasibility study so that it will be concluded this year. That will give us an opportunity to launch FTA  negotiations with Japan, our largest trading partner, by the end of this year or early next year. It is important that we do not rest on our laurels and that we do not put all our eggs into one basket in this policy area. It is important that we focus on developing new markets and on strengthening the existing markets we have had for many decades.