Japan to Slash Tariffs in Trade Deal
After intense negotiations Japan has granted Australian producers unprecedented access to its beef and dairy markets by agreeing to slash tariffs. Beef and dairy were the two sectors remaining that were blocking a deal that would remove tariffs on 97% of Australia’s exports to Japan. The 38.5% tariffs on frozen beef will be reduced to 19.5% over 15 years with the tariff being cut by 11% in the first three years. The 38.5% tariff on fresh and chilled beef will drop to 23.5% over 15 years and will be cut by 8% in the first three years. The beef industry estimates that the value of the industry would grow by $2.8 billion over the next 20 years with the extra exports worth $5.4 billion. Duty-free cheddar exports are expected to increase by 9,000 tons in the first year of the agreement. Wine, sugar, horticulture, and seafood have all also received large deductions or elimination of tariffs. The trade deal with Japan comes close behind a significant trade deal completed between Australia and South Korea. Japan will receive the same deal on foreign investment as South Korea – the threshold for review by the Foreign Investment Review Board for an investment by a private Japanese entity will increase from $248 million to $1.08 billion. For investments by state-owned entities the threshold will remain at zero, and for the purchase of agricultural land or an agribusiness the threshold will be $15 million.
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