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Japan and Australia fail to agree on tariffs in FTA talks

Kyodo

Japan and Australia failed to reach an agreement over cutting tariffs on farm products during ministerial talks Wednesday in Tokyo and could only confirm they will continue the negotiations.

After meeting with agriculture minister Yoshimasa Hayashi, his Australian counterpart Andrew Robb told reporters that they had good talks but that more discussions are needed.

Hayashi also told reporters they had a “very good discussion” and “exchanged honest opinions,” but he did not elaborate.

The main sticking points are how to deal with tariffs on Australian beef and Japanese cars. The two countries are striving to reach an agreement by April, when a summit between Prime Ministers Tony Abbott and Shinzo Abe is planned.

Robb also met with Akira Amari, minister in charge of the Trans-Pacific Partnership free trade talks, and was to meet with Foreign Minister Fumio Kishida and trade minister Toshimitsu Motegi later in the day.

Momentum in the negotiations for a bilateral deal has picked up recently, especially after Robb expressed hope of striking a deal in April when he met with a Liberal Democratic Party Diet member in February on the sidelines of a TPP ministerial meeting in Singapore.

Earlier this month, Koya Nishikawa, a Lower House member from the LDP, visited Canberra at the behest of the party and met with Abbott over the free trade agreement.

Expectations are now growing the talks will conclude when Abbott visits Tokyo in early April to meet with Abe, and that they will sign an accord in July when Abe is slated to visit Canberra.

If a deal is reached, Australia will become the first major agriculture exporting nation to agree on an FTA with Japan, which has been reluctant to open up its agricultural market to shield the domestic industry from inexpensive foreign imports.

However, Japanese tariffs on beef remain a crucial issue that needs to be resolved. Japan has proposed reducing tariffs on beef from the current 38.5 percent to around 30 percent, but Canberra is pushing for 19 percent, according to Australian media reports.

Japan is the biggest importer of Australian beef. In 2012, around 60 percent of Japanese beef imports came from Australia in value terms, followed by about 30 percent from the U.S.