Wyatt Roy (Longman, Liberal Party) Share this | Hansard source

Is always a pleasure to follow the member for Higgins. On behalf of the Joint Standing Committee on Treaties, I present the committee's report 144, entitled Treaty tabled on 14 July 2014.

Report made a parliamentary paper in accordance with standing order 39(e).

by leave—Today I present the Joint Standing Committee on Treaties report 144, containing the committee's views on the agreement between Australia and Japan for an economic partnership.

The Japan-Australia Economic Partnership Agreement (JAEPA) was tabled in parliament on Monday, 14 July 2014. Australia and Japan enjoy a strong, longstanding bilateral relationship based on common values: democracy, human rights and the rule of law. During his visit to Australia the Prime Minister of Japan, Mr Shinzo Abe, spoke of the evolving nature of the 'special relationship' between our two countries, as it expanded to take in closer security bonds and broader trade ties.

That relationship has been reinforced by a steadily developing complementary bilateral economic relationship. Since the middle of the 20th century, Australian resources have supported Japan's prosperity and Japan's manufactured goods have contributed to Australia's modern living standards. Today, Japan is our second-largest trading partner with two-way trade, in 2013, standing at $70.8 billion.

JAEPA will further enhance this important economic relationship. It is the first agreement that Japan has signed with a major agriculture-exporting country. It is seen as the most liberalising trade agreement that Japan has ever concluded. This agreement places Australia at the front of the pack. Tariffs will be reduced in a range of areas. Modelling predicts that beef exports will benefit by around $5.5 billion over 20 years and deliver an increase of up to seven per cent in the annual gross value of Australian beef production.

There will be duty-free quotas for Australian cheese, immediate duty-free access for the growing trade in milk protein concentrates and new opportunities for ice cream and frozen yoghurt. Importantly, Australia will gain a first mover advantage. Australian exporters will have the opportunity to beat their competitors into the Japanese market and establish a presence with consumers before other countries have that chance.

As with all negotiated free trade agreements, JAEPA did not deliver on all the outcomes that we would have liked. However, as one witness pointed out to the committee, the agreement represents a 'seismic shift' in Japan's traditional thinking on trade. As another witness told the committee, JAEPA will refocus attention in both Japan and Australia on the relationship between the two countries. It will open up opportunities for further trade liberalisation and the flow-on effects will go far beyond tariff reductions.

The committee found that increasing the non-screening investment level to $1,078 million is expected to significantly increase Japanese investment in Australia. In 2013 it stood at $131 billion. The revised provisions will make it simpler for Japanese investors to do business in Australia, making it an attractive option in an increasingly competitive market.

Minerals and energy resources make up the bulk of Australia's export trade with Japan, worth over $24 billion and accounting for over 80 per cent of total merchandise exports in 2013. Australia is facing significant competition in this area from global competitors, but the economic agreement will offer Japan reassurance concerning energy and resource security from Australia, providing suppliers with a boost. Overall, we are satisfied that JAEPA has the potential to provide Australian business and industry with a range of profitable opportunities and to be a net benefit to the Australian economy.

I would like to take this opportunity to thank fellow members of the committee for their cooperation. You, Mr Deputy Speaker Whiteley, are of course a member of that committee and I thank you, as well as the deputy chair, who is in the chamber here today, and all members of the committee for their cooperation on this, and particularly the committee secretariat for their work in putting this report together. On behalf of the committee, I commend the report to the House.

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