Australian vegetable exporters to Japan are reaping early gains since the Japan-Australia Economic Partnership Agreement (JAEPA) entered into force on 15 January 2015.
JAEPA eliminates or reduces barriers to trade in goods between Japan and Australia, including tariff eliminations or reductions that have been a key impediment until now.
Recognised as the most liberalising trade agreement Japan has ever concluded, JAEPA is delivering substantial benefits for the Australian economy and enhancing business with Japan – Australia’s second largest trading partner.
The second round of tariff reductions under JAEPA, in force since 1 April 2015, is providing significant business opportunities for Australian exporters to Japan.
Catherine Taylor, Austrade’s Senior Trade Commissioner based in Osaka, said most of the key vegetables Australia exports to Japan have immediate tariff reductions under JAEPA.
‘Early indications are that the majority of Japanese importers are claiming reduced import duties, which helps make trade with Australia more attractive and our products more competitive,’ said Taylor.
‘For those vegetable exporters not yet accessing the preferential tariffs, keep in mind that preferential JAEPA tariffs are not applied automatically and you need to submit the correct certification of origin to start the process. Also, have a conversation with your importer and make sure they are doing their part to claim the reduced tariff at their end,’ she added.
In addition to the reduced tariffs, Taylor said the agreement with Japan has created a new momentum that is turning the focus back on Australian food exports.
‘There is a renewed sense of opportunity in Japan around fresh food exports from Australia and now is the time to tap into it,’ she said.
‘Apart from understanding how to access the preferential tariffs, it is equally important to understand the market opportunity and make sure your export strategy aligns with it. That is where Austrade, and in particular our team in Japan, can assist.’
According to Euromonitor data, Japanese people eat about 96 kilograms of vegetables and 34 kilograms of fruits per person per year. The cut vegetables and fruits market has been one of the significant booms in Japan, worth around US$750 million, due to the growing number of single-person households and ageing population, as well as strong demand for convenience foods.
Self-sufficiency of food production in Japan also remains relatively low. The rate on a calorific basis in 2014 was 39 per cent – the same rate since 2010, whereas the rate in Australia exceeds 200 per cent.
These factors, according to Taylor, underline why Japan will always be one of the world’s largest net importers of food, and therefore a key market for Australia.
‘JAEPA is Australia’s chance to develop new business for vegetable exports – don’t miss out of the benefits simply because of paperwork.
‘Use it as an opportunity to have a conversation with your importer about not just claiming the reduced tariffs but about expanding business in this important export market. I am keen to see all Australian vegetable exports coming into Japan over the next few months utilise the JAEPA preferential tariffs where they apply,’ said Taylor.