July 2, 2013

Australia's drought-stricken cattle industry may benefit from a strong financial outcome through improved beef exportations to Japan.

Based on department briefing notes addressed to Australia's Agriculture Minister, John McVeigh, Japan is taking its first steps towards entering a free trade deal which could lead to decreased beef tariffs of almost 40%.

Queensland is already the largest source of the highly prized Wagyu beef. In addition, the nuclear contamination in Japan from the Fukashima disaster led to a "loss of key genetics'' in Japan's domestic stock.

Mcveigh said Japan's beef tariffs might be scrapped as a compromise deal, while protection could remain in place for rice, sugar and milk.

"The potential benefit to Queensland's beef sector, of any reduction or removal of the tariff on beef to Japan, could be in the order of hundreds of millions of dollars,'' the document stated.

However, it said progress would not be soon due to Japan's political culture of protectionism. Australian rice faces a 778% tariff, sugar at 328%, and milk powder at 218%.