Japan Australia Economic Partnership Agreement

Newsletter Update 6

Australia-Japan Free Trade Agreement – Sixth Negotiating Round

The sixth round of negotiations on the Australia-Japan Free Trade Agreement (FTA) was held in Tokyo from 28 July to 1 August 2008.

Overall, we have continued to make progress on the various chapter texts and, have now also discussed initial offers on services and investment.

Following the formal exchange of initial services and investment offers at the last (5th) round in Canberra, the two sides commenced the initial stage of requests. Each side sought further details about the other side’s offer and requested clarification of particular provisions. Australia reiterated our particular interest in sectors including education and training, financial services, professional services and telecommunications.

We continue to welcome any further input on any matters of commercial concern in relation to services and investment issues with Japan.

On trade in services, we discussed covering mode 3 (i.e. commercial presence) in both the services and investment chapters. Elsewhere, useful discussions on particular provisions that will apply to all Australian service suppliers in the Japanese market continued. On telecommunications, Australia continues to seek strengthened disciplines on competition and regulatory outcomes. On movement of natural persons (which covers the temporary entry of businesspeople into Australia or Japan for work purposes), both sides advanced understanding of policy approaches, while highlighting challenges in areas of sensitivity.

In investment, some key issues – including the approach to investor-state dispute settlement and the coverage of performance requirements – remain subject to further discussion. Nevertheless, we are narrowing divergences across the text, and each side approached the sessions constructively.

On the goods areas of the negotiations, we continued the discussion conducted over the previous two rounds on Australia and Japan’s initial requests and offers on trade in goods. Japan continues to seek many exclusions in agriculture, including on items of interest to Australia. For this reason, we continued the discussion of Australia’s market access interests, as we will do at the next round.

The session on the trade in goods chapter was brief, we are waiting until market access negotiations are further advanced before discussing certain areas, however we are aiming to have more substantial discussions at the next round.

We made incremental progress in the session on the rules of origin chapter, with the discussion focusing on Australia’s preferred approach to certification of origin. As previously noted, Australia will be seeking to make change of tariff classification the main method for determining whether a good should receive preferential tariff treatment, consistent with our recent FTAs.

The discussion on the chapter on customs procedures was productive, with a good deal of the text of this chapter now agreed. However, more work is still required to resolve some remaining issues, including our request that traders have access to advance rulings on, for example, tariff classifications. We have agreed to consider Japan’s approach in this area at the next round.

As noted in previous newsletters, Japan has requested that Australia consider a chapter on energy and mineral resources. At this round, Australia provided initial responses to some of Japan’s specific proposals. We have not covered energy and mineral resources as a discrete subject in our FTAs before, and we have told Japan that we will need to consider its proposals carefully. Japan has reinforced the importance of including provisions on this subject in the FTA. We have agreed to consider its proposals constructively, and to discuss them further at the next round.

Japan also made specific proposals on food security at this round. Japan’s proposals are ambitious and, again, are new to Australia in the context of FTA negotiations. It will take some time to work through the implications of the proposals. We agreed that Australia would provide an initial reaction to Japan’s proposals at the next round.

We continued to work on the texts of the technical barriers to trade and e-commerce chapters, beginning to narrow our differences in these areas. In our discussion of sanitary and phytosanitary cooperation (which had not been on the agenda at the fifth round) we continued to exchange views based on the elements paper provided by Australia prior to the fourth round.

We made some progress in the session on government procurement on drafting agreed text. As these discussions proceed over the next few rounds, we will continue to work to ensure the text of the chapter reflects our procurement system. Once the text has been agreed, we will begin market access negotiations with the aim of securing guaranteed access for Australian suppliers to Japan’s government procurement markets.

Good progress was made in the intellectual property chapter negotiations. Discussions focussed on the consolidated draft negotiating text and proposals made by Australia and Japan. The parties agreed on further intersessional work to move forward on various technical and substantive issues.

Australia and Japan had a productive session on institutional and framework provisions. Discussions centred on the transparency-related articles in the General Provisions chapter.

The competition policy session looked at possible elements of cooperation in competition-related matters. Constructive progress was also made on the proposed chapter text.

The two sides also met for an additional two and half days’ intensive discussion on dispute settlement and related provisions. The discussions covered all aspects of the consolidated text, clarifying key areas on commonality and difference, as well as identifying possible pathways to resolve those differences and move forward.

Looking ahead, the next round of negotiations is scheduled for late October, in Canberra. In addition to continued exchanges on text, we expect to further advance our discussions on issues relating to market access. We welcome input on issues of relevance to the Australia-Japan FTA negotiations. For further information, please email JapanFTA@dfat.gov.au.

Japan FTA Taskforce, Department of Foreign Affairs and Trade