Japan Australia Economic Partnership Agreement

Australia-Japan Free Trade Agreement‚ Twelfth Negotiating Round

Newsletter Update 12

6 April 2011

Overview

The twelfth round of negotiations on the Australia-Japan Free Trade Agreement (FTA) was held in Tokyo from 7-10 February 2011.

This was the first FTA round held since Japan announced its new trade policy on FTAs (the Basic Policy on Comprehensive Economic Partnerships) in November 2010, with the stated goal of opening up to the world through trade and investment liberalisation — including through concluding the FTA with Australia.

The round saw renewed enthusiasm from Japan. Progress was made across most areas of the negotiations, although a number of areas of difficultly remain.

Australia and Japan both committed to a comprehensive, high quality FTA and Australia will continue to work hard with Japan to resolve outstanding issues.

The next round was scheduled to be held in Canberra from 11-15 April 2011. However, due to the recent disaster, resources within the Japanese bureaucracy have understandably been preoccupied with tsunami-related disaster response and recovery operations and therefore the round has been postponed. At this stage a date for the 13th round of negotiations has yet to be set. DFAT will be talking to our Japanese counterparts to reschedule the round in due course.

Goods (Agricultural and Non Agricultural)

In the goods market access session, both sides continued to explore respective goods requests and offers. 

On agricultural market access, Australia noted that free trade in agricultural products should be the goal of the FTA. Australia also presented a list of priority products it would like Japan to pay particular attention to in terms of improved market access. Japan provided an explanation of its FTA policy change and the accompanying development of a new policy on agricultural reform (due in June 2011). Japan also acknowledged that liberalisation of its agriculture sector would be necessary to conclude an FTA with Australia.

On market access for industrial products and resources, Japan reiterated its request for further improvements in Australia's offer, while Australia outlined areas in which it considered Japan could improve its offer.

Discussions on the energy and mineral resources chapter made solid progress, while discussions on food supply highlighted Japanese concerns regarding a possible fall in Australian exports of food to Japan following the recent floods and cyclone Yasi.

Sound progress was also made on the chapters on rules of origin, customs procedures, and technical barriers to trade.

Services and Investment

Discussions on services and investment chapter texts were productive. In particular, solid progress was made on the telecommunications and financial services chapters, where both sides were able to agree on a significant amount of unresolved text.

Minor progress was made on the almost-complete trade in services chapter. Progress on the investment chapter was slower, as key areas of difference remain, including Japan's priority request to include an Investor-State Dispute Settlement mechanism.

Australia expressed disappointment at the lack of progress on the issue of increased market access for services and investment and reiterated the importance of a strong outcome.

Legal, Institutional and Other Issues

The dispute settlement chapter is coming together, with progress made towards agreeing on structures for panel composition, panel procedures and suspension of concessions.

Positive progress was also made on the chapter for institutional and framework provisions — in particular on taxation and security exceptions — and on the government procurement text.

We welcome input on issues of relevance to the Australia-Japan FTA negotiations. For further information, please email JapanFTA@dfat.gov.au.

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