Japan-Aus free trade deal in effect from today

The Japan-Australia Economic Partnership Agreement (JAEPA), the
free trade deal between the two nations comes into effect today.

Japanese Prime Minister Shinzo Abe and Australian Prime
Minister Tony Abbott welcomed the agreement in a joint statement.

“JAEPA represents an historic development in economic
relations between Japan and Australia and is the most significant bilateral
economic agreement since the 1957 Agreement on Commerce,” said the two leaders.

As AAP reports, the main Australian beneficiaries of the
deal will be from the agricultural sector.

According to Trade Minister Andrew Robb, the tariffs on beef
exports from Australia to Japan will drop by about 20 per cent and other primary
products such as prawns, lobsters, asparagus, cherries, grapes, macadamia nuts
and almonds will no longer be subject to duty.

The deal holds no appeal to Australian manufacturers, though
Japanese car makers and manufacturers of electronics and white goods will benefit
from the JAEPA. Conversely, Australian consumers will pay lower prices for
these products.

As the Japan Times reports, from today Australia will remove
tariffs on Japanese cars with engine displacements of 1,500 cc to 3,000 cc. And,
over the next three years, tariffs on larger vehicles will also be abolished.

Motor vehicles currently account for 45 percent of Japan’s
overall exports to Australian on a value basis.

Of course, all three Australian car makers will cease
production by 2017, so this will have no long-term impact on local industry.