Trade deal with Japan is a winner despite whinging
TYPICALLY, self-interested Australians have again conjured a gigantic whinge.
On April 7 a "substantive" trade deal between Australia and Japan followed seven years of hard negotiation.
It has improved on the seminal deal forged in 1957 by Bob Menzies and the current Japanese PM's grandfather, which saw both economies prosper economically as bitter memories of the Second World War faded.
The new deal is tipped to be potentially worth tens of millions over 20 years.
The Melbourne Age described it as the "best deal ever granted by the giant Japanese economy to another nation".
And giant it is, having just recently lost its mantle as the second biggest economy in the world to the mercurial Chinese.
Although concrete details have not yet emerged, what the agreement will mean generally is that Japanese cars, cameras, televisions and other high-tech goods will be cheaper in Australia.
For example the 5% tariff Australia imposes on Japanese small to medium-sized cars will go, resulting in the delivery of a price cut of up to $1500.
On the other side, our beef, seafood, wine and horticultural producers will reap substantial benefits.
For example, the current 38.5% tariff on beef imports will be cut in the first year by 8% for frozen product and 6% for chilled product, then gradually ease down over 18 years.
The importance of this relief alone will be significant to Australia.
Sixty four percent of Japan's beef imports are Australian, 26% American. Our market share is sure to increase as prices fall in protein gorging Japan.
In fact, estimates are an extra $5.5 billion in beef export earnings over 20 years.
Enter the National Farmers Federation. Their whinge? Sugar, rice, grains, dairy and pork producers largely miss out - according to them anyway.
Fresh cheese for example currently faces a 29.8% tariff in Japan, which apparently hasn't been dropped.
Regular readers of my column will know that the reasons are both historical and socio-political.
But is the whinge over the top? Apparently Japan will double its dairy quota for example.
So why did Japan come to the table, especially considering their recent censure over whaling in the Great Southern Ocean the result of international court action initiated by Australia.
The answer is two words. South Korea.
Australia and South Korea are to sign a free trade agreement under which Australia will abolish 5% tariffs on cars, TVs, fridges and so forth.
In return, the Koreans will drop tariffs on resources, energy and manufactured goods, and open their markets to Australian educational programs and telecommunications.
South Korea has been eating into Japanese exports here for years. The Japanese simply had to act.