Tuesday, 8th April 2014

COWS VS CARS

The Abbott government secured a much-needed win yesterday with the signing of the Japan free trade deal.

After several weeks spent squandering political capital on issues such as the racial discrimination act changes and the knights and dames fiasco, the Japan agreement is a valuable opportunity for the Coalition to find direction.

Deals like this are never as straightforward as governments like to portray. As with all such agreements, there are strings attached – there’s a reason this one has been in the works since 2007. The ‘free’ in free trade is always strictly relative.

But Abbott and his team will gladly take credit for completing the deal because it heralds significant reductions in trade barriers between the two economies, covering almost every Australian export to Japan. It will undoubtedly boost bilateral trade.

For Australia, the main gains are for agricultural exporters, especially the beef and dairy industries. The 38.5 per cent tariff on frozen beef, for example, will fall to 19.5 per cent over 15 years.

In return, Australia will remove the 5% tariff on Japanese electronic and household goods and on most Japanese cars being sold in Australia – making them cheaper for Australian consumers.

Now, Abbott is on to South Korea and then China, where he will hope to make similar gains for Australia. But he shouldn’t expect such amenable negotiations as occurred in Japan.

Nick Feik
Politicoz Editor

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