Wine to benefit from Australia-Japan deal

7th April, 2014 by Rupert Millar

A major new trade agreement between Australia and Japan could help open up a new avenue in Asia for Australian wine.

Japan Australia

The Australian and Japanese prime ministers, Tony Abbott (l) and Shinzo Abe

The deal – which was seven years in the making – was struck today, Monday 7 April, between the two Pacific powers and will see Japan eliminate tariffs for Australian wool, cotton, lamb and beer and give “preferential treatment” to beef, wine, cheese and seafood among other products.

Australia will remove tariffs on Japanese cars, electronics and household appliances in return.

According to the Financial Times, the deal will give Australian farmers, “vast new access to one of Asia’s biggest markets”.

It will be welcome news to Australian winemakers who have seen sales in China, previously heralded as a powerhouse market, fall flat.

One winemaker recently told the drinks business that China had not proved to be the “El Dorado” so many had hoped for.

Business Insider Australia reported that tariffs on bottled, sparkling and bulk wines would be “eliminated” over the next seven years.

Australian prime minister, Tony Abbott, is now en route to South Korea to sign a free trade agreement in Seoul, which is broadly similar to that just struck with Japan.

The FT continued that the deal comes as the US is struggling to “break the stalemate” over a similar deal between the two countries.

As Japanese prime minister, Shinzo Abe, has previously said he would protect five “sacred” agricultural areas from foreign competition – including beef and rice – the concession to Australian beef imports will “raise eyebrows” in Washington.

Nonetheless, the deal could be an important step in the negotiations for the wider “Trans Pacific Partnership”, a trade pact which incorporates the US, Singapore, New Zealand, Australia and Japan.

The new deal also includes the possibility of new talks on the sharing of military technology.

Not widely reported in the mainstream media in the UK, tensions between China and Japan have been rising of late because of a dispute over territorial rights in the East China Sea, centred on a string of small islands known as the Senkaku islands in Japan and Diaoyu islands in China.

Abbott told the Japanese Chamber of Commerce that: “The best response to those who fear that North Asia is doomed to a cold peace or worse is that more trade means more understanding and more understanding means less tension.”

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