Japan’s demand for special consideration in liberalizing its farm sector was shot down Thursday by visiting Australian Prime Minister John Howard.

“We must agree to disagree,” Howard told a breakfast meeting of the Japan-Australia Diet Members League on the last of his three-day visit to Japan.

Howard was responding to a call by former foreign and trade minister Kabun Muto that Japan should be treated differently because it is somehow “unique.”

“We will make efforts for trade liberalization of the farm sector,” Muto said, “but Japan’s uniqueness should be understood.”

Japanese farmers are less competitive than those in other countries because they cultivate small farms of their own, according to Muto.

But Howard responded that Japan’s protection of the agricultural sector will hurt the economies of developing countries that rely on agriculture.

“I think it is important that we understand the impact of heavily subsidized agriculture on the developing countries in the world,” Howard said.

Global trade liberalization talks under the World Trade Organization have been stalled partly due to differences between farm-product importers, such as Japan and the European Union, and exporters, including Australia and the United States.

Japan and the EU are forming a joint front calling for only moderate cuts in tariffs and subsidies. A group of nations led by Australia and the U.S. is meanwhile demanding major cuts.

Howard also addressed bilateral ties between Japan and Australia.

“The character of the relationship has expanded” to include security issues, but this does not mean the “economic and trading relationship is any less important,” he said.

On Wednesday, Howard met with Prime Minister Junichiro Koizumi for talks on a variety of topics, including North Korea’s nuclear arms program, antiterrorism measures and economic partnership.

Howard reiterated his support for Japan’s efforts to get five-way talks on the North’s nuclear program started and to resolve the abductions of Japanese nationals.

Execs laud progress

Japanese and Australian business circles welcomed on Thursday the signing of a new economic framework pact between the two countries.

The business leaders expect the agreement to lead eventually to the conclusion of a bilateral free-trade accord.

The framework agreement was signed by Prime Minister Junichiro Koizumi and Prime Minister John Howard after their summit in Tokyo on Wednesday.

Under the agreement, a government-level work program will be launched to “examine the costs and benefits” of the liberalization of trade in goods and services, as well as investment between the two countries.

In a joint statement, the Japan-Australia Business Cooperation Committee and its Australian counterpart said the accord is a “major milestone for closer economic relations between the two countries.”

The accord did not refer specifically to a free-trade agreement, despite vociferous calls from the private sectors of the two countries.

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