The Economic Partnership Agreement (EPA) negotiated with Japan is an important step towards trade liberalisation. Though it is not a 'free trade agreement' — and was never going to be — real benefits will flow across a range of Australian agricultural exports, including dairy products and beef.
At the same time, predictions of instant windfalls should be treated with caution. The tariff reductions on beef, for instance, will not be fully implemented for between 15 and 18 years, by which time the new tariff rates of 19.5 per cent (for frozen beef used in processed food) and 23.5 per cent (for chilled beef sold at supermarkets) will be about the same as China's average tariff on agricultural imports today.
Following years of discussions, progress towards a deal accelerated after Japan's change of government 16 months ago. A key element of Prime Minister Shinzo Abe's revitalisation plan for the Japanese economy is deregulation, and pressure has been building for him to deliver something concrete to consumers who have just been hit by a rise in the consumption tax rate.
Japanese officials are hoping the EPA with Australia — Japan's first with a major agricultural exporting nation — will help clear the roadblock holding up a Trans-Pacific Partnership (TPP) agreement. As Tony and Shinzo (they addressed each other by their first names) were shaking on the deal, a short distance away in Tokyo Japanese and American officials met for another inconclusive round of TPP negotiations.
While there was no repetition of the 'best friends' reference in Abbott's public comments, the two leaders made much of their nations' long history of commercial engagement and shared commitment to 'democracy, freedom and rule of law'. The relationship, said Abbott, was not just based on commerce: 'It's about respect; it's about values'. For his part, Abe talked about forging a 'special relationship' with Australia. Their ideological handshake can hardly be seen other than as an expression of what separates them from non-believers (read 'China').
Indeed, while trade dominated the headlines, another important theme of the visit was strategic cooperation. Abbott was afforded the privilege of being the first foreign leader to sit in on a meeting of Japan's new National Security Council. The two leaders reportedly discussed possible exchange of defence technology and joint weapons development. Recently Abe announced the easing of a long-standing ban on weapons exports, which might now directly benefit Australia.
Abbott also indicated his approval for the Abe government's reinterpretation