August 2, 2006

Japan likely to establish FTA with Australia

An expert on trade policy said the prospects for a free trade agreement (FTA) between Australia and Japan are looking good.

Prospects of a free trade agreement between Australia and Japan were heightened yesterday as Australia's Foreign Minister Alexander Downer discussed a possible FTA with the Japanese Prime Minister in Tokyo Monday (Jul 31).

Both countries are now completing a feasibility study. Japan was opposed to the agreement in 2002.

Although Japan is Australia's most important trading partner, quotas and high tariffs have restricted exports of beef, dairy, pork, and other agricultural produce.

Dr Ann Capling from Melbourne University said increasingly, Japan would have to allow more agricultural products as a growing China competes with it for food and raw materials.