David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

I present the Joint Standing Committee on Treaties report No. 144 and I seek leave to have the report incorporated in Hansard.

Leave granted.

The report read as follows—

Treaty tabled on 14 July 2014

Agreement between Australia and Japan for an Economic Partnership (Canberra, 8 July 2014)

Mr President, today I present the Joint Standing Committee on Treaties' Report 144, containing the Committee's views on the Agreement between Australia and Japan for an Economic Partnership.

The Japan-Australia Economic Partnership Agreement (JAEPA) was tabled in Parliament on Monday 14 July 2014. Mr President, Australia and Japan enjoy a strong, long-standing bilateral relationship based on common values: democracy, human rights, the rule of law. During his visit to Australia in July 2014, the Prime Minister of Japan, Mr Shinzo Abe, spoke of the evolving nature of the 'special relationship' between our two countries, as it expanded to take in closer security bonds and broader trade ties.

Mr President, that relationship has been reinforced by a steadily developing complementary bilateral economic relationship. Since the middle of the twentieth century, Australia's resources have supported Japan's prosperity and Japan's manufactured goods have contributed to Australian's modern, affluent standard of living. Today, Japan is our second-largest trading partner with two-way trade, in 2013, standing at $70.8 billion.

JAEPA will further enhance that economic relationship. It is the first such agreement that Japan has signed with a major agricultural exporting country. It is seen as the most liberalising trade agreement that Japan has ever concluded.

Mr President, this Agreement places Australia in an enviable position. Tariffs will be reduced in a range of areas. Modelling predicts that beef exports will benefit by around $5.5 billion over 20 years and deliver an increase of up to seven per cent in the annual gross value of Australian beef production. There will be duty-free quotas for Australian cheese, immediate duty-free access for the growing trade in milk protein concentrates and new opportunities for ice-cream and frozen yoghurt.

Importantly, Mr President, Australia will gain a first-mover advantage. Australian exporters will have the opportunity to beat their competitors into the Japanese market and establish a presence with consumers before other countries have the chance.

As with all the free trade agreements that Australia has negotiated to date, Mr President, JAEPA did not deliver on all the outcomes we would have liked. However, as one witness pointed out to the Committee, the Agreement represents a 'seismic shift' in Japan's traditional thinking on trade. As another witness told the Committee, JAEPA will 'refocus' attention, both in Japan and Australia, on the relationship between the two countries. It will open up opportunities for further trade liberalisation and the flow on effects will go far beyond tariff reductions.

The Committee found, Mr President, that increasing the non-screening investment level to $1 078 million is expected to significantly increase Japanese investment in Australia. In 2013 it stood at $131 billion. The revised provisions will make it simpler for Japanese investors to do business in Australia making it an attractive option in an increasingly competitive market.

Mr President, minerals and energy resources make up the bulk of Australia ' s export trade with Japan, worth over $24 billion and accounting for over 80 per cent of total merchandise exports in 2013. Australia is facing major competition in this area from global competitors but the Economic Agreement will offer Japan reassurance concerning energy and resource security from Australia, providing suppliers with a boost.

Overall, Mr President, we are satisfied that JAEPA has the potential to provide Australian business and industry with a range of profitable opportunities and to be a net benefit to the Australian economy

Mr President, on behalf of the Committee, I commend the Report to the Senate.