Australian industry benefits from Asian trade deals
Australian businesses have new opportunities to boost exports and break into key Asian markets with the implementation of landmark free trade agreements with Japan and South Korea. Australian consumers will also benefit from better priced manufactured goods including cheaper cars and electrical appliances.
The Japan–Australia Closer Economic Partnership Agreement (JAEPA) comes into force today on the heels of the Korea–Australia Free Trade Agreement (KAFTA), which took effect on 12 December 2014.
Industry and Science Minister Ian Macfarlane said Australian businesses and investors now have a competitive edge in a market with a combined population of more than 177 million people and a combined GDP of more than $6 trillion.
“This is a huge opportunity as Japan is our second largest trading partner and Korea our fourth largest, with combined two-way goods and services trade worth more than $100 billion,” Mr Macfarlane said.
“These trade agreements will deliver new jobs and expansion opportunities across the Australian economy with major openings for the Australian resource, pharmaceutical and food processing sectors.
“While there are challenges facing manufacturers across the globe as the economy continues to transition, businesses here are innovating, adapting and grasping new opportunities in the global market.”
Resource companies such as Woodside, Mitsui and Co, MMG, Centennial Coal, and Newmont Mining have shown strong support for the agreements, highlighting the enormous potential for increased investment.
The two agreements ensure that tariffs on Australian coal and iron ore exports to Japan and Korea, worth over $37 billion in 2013, are locked in at zero.
Pharmaceutical and vitamin companies such as CSL, Blackmores and Swisse have welcomed improved access to Korea and food manufacturers will also benefit strongly from better access to both markets.
Brisbane-based Capilano Honey and Gourmet Garden from the Sunshine Coast which exports packaged herbs will benefit from JAEPA, while South Australia’s beverage producer Bickford’s Australia has welcomed better access to the Korean market.
Australian manufacturers of dairy products will also enjoy greater access to the Korean market, with Bega Cheese, Devondale Murray Goulburn and Warrnambool Cheese and Butter all supporting KAFTA.
Beef is a major export to Japan and Korea and Australian beef processing companies Teys Australia, JBS Australia and NH Foods have all welcomed the tariff reductions negotiated in these agreements.
Conversely, Australian businesses will benefit from cheaper imports, including dump trucks and large goods vehicles that are vital to the mining and construction industry.
Similarly, cheaper manufactured goods from Japan and Korea, including electrical appliances, electronics and motor vehicles will make a larger range of goods available and more affordable for Australians.
“These agreements are a result of the Government’s determined international efforts to strengthen the Australian economy and benefit Australian industry over the long term,” Mr Macfarlane said.
“It complements our linking of industry with the science and research community as part of the Industry Innovation and Competitiveness Agenda and particularly its central plank, the Industry Growth Centres Initiative which will assist a wide range of industries to innovate and increase their export focus.”
Media contacts: Minister's office 02 6277 7070