Prime Minster Tony Abbott is hopeful of finalising an historic free-trade agreement with Japan today that could improve the value of more than 350,000 Japanese vehicles sold in Australia every year.
Reaching the end of a week-long delegation in Japan, Abbott last night told ABC News the negotiation process had been “difficult”, but said he was “optimistic” of reaching an agreement.
“We are hopeful not just of getting more Australian produce sold in Japan, more Japanese products sold in Australia, but we want to have more investment, more two-way investment and more opportunities for Australian companies to flourish here in Japan,” the Prime Minister said.
“There are still some final matters to be resolved and while we do want a swift conclusion, we want a satisfactory conclusion as well.”
The establishment of an FTA between Australia and Japan would lead to the removal of the five per cent tariff currently applied to new vehicles imported from the Asian automotive hub.
Almost one third of all new cars sold in Australia are built in Japan, including popular models from Toyota, Mazda, Nissan, Mitsubishi, Subaru, Honda, Suzuki, and luxury manufacturers Lexus and Infiniti.
The removal of the tariff could potentially save Australians up to $1000 on a $20K car or $2000 on a $40K model, though car makers may also look to add features and increase value rather than cut prices of their cars.
The two countries have been involved in FTA negotiations for seven years. Australians would also likely benefit from reductions in the prices of other household products, such as televisions and whitegoods, while Japan would reduce the tariffs on Australian beef and allow more Australian dairy to be sold on its shores in a massive boon for local farmers.
Australia will sign an FTA with South Korea tomorrow that promises to deliver improved value for new vehicles imported from the country, which is the next-largest vehicle exporter to Australia after Japan.