JAEPA provides tariff-free entry for Australia’s key resources, energy and manufactured exports.
Since entry into force on 15 January 2015, more than 99.7 per cent of Japan’s imports of these products from Australia by value (in 2013) enter Japan duty-free, with most remaining tariffs eliminated by 2024. On full implementation of JAEPA all of Australia’s current resources, energy and manufacturing exports, worth more than $31 billion in 2016 will benefit from tariff-free entry into Japan.
Resources and energy products
Australia’s exports of resources and energy products to Japan were worth an estimated $30 billion in 2016 and accounted for more than 76 per cent of Australia’s total exports to Japan. Many of Australia’s major resource exports, such as coal, iron ore and liquefied natural gas already entered duty-free before JAEPA, but tariffs of up to 11.7 per cent were charged on a range of transformed energy and resource products. Under JAEPA, all tariffs on energy and mineral products will be eliminated by 2024, with most cuts having occurred on 15 January 2015 when JAEPA entered into force.
Key outcomes included:
- High tariffs of 11.7 per cent on unwrought nickel (unalloyed) are being phased out by 2021. Australia is Japan’s third largest supplier of unalloyed nickel, with imports worth $60 million in 2016.
- Immediate elimination of the 3.2 per cent tariff on coke and semi coke of coal (used for steel making). Australia is Japan’s second largest supplier, with 2016 exports worth $19 million.
- Immediate elimination of tariffs up to 7.9 per cent on non-crude petroleum oils. Australia’s exports to Japan were worth $97 million in 2016. Additionally, tariffs already set at zero for certain petroleum oil products will be locked-in at that rate, providing greater certainty to Australian exporters.
- Immediate elimination of the 3.3 per cent tariff on aluminium hydroxide. Australia’s 2016 exports of aluminium hydroxide to Japan were worth $95 million.
- Tariffs of 6.3 per cent on ferro-manganese are being phased out by 2021. Australia is Japan’s largest supplier, with Japan importing $31 million of ferro-manganese from Australia in 2016.
- Immediate elimination of the 3.2 per cent tariff on titanium dioxide. Australia’s exports to Japan were worth $21 million in 2016. This outcome will help improve Australian titanium dioxide exporters’ competiveness against other foreign suppliers.
Japan applies high general tariffs of up to 30 per cent on some manufactured products including: textiles, clothing and footwear; hides and skins; wood products; plastics and shaving products; and deodorants.
Under JAEPA these tariffs are being eliminated, opening up new opportunities for Australian exporters. Outcomes include:
- Elimination of tariffs and more liberal rules of origin than Japan has ever granted to another country for key apparel, textiles, woollen blankets and carpets.
- Immediate elimination of tariffs of 5.2 per cent on pearl jewellery. Japan’s imports from Australia worth $15 million in 2016.
- Immediate elimination of tariffs on wood products, such as medium density fibreboard, particle board and structured laminated timber. Imports of all forestry items from Australia were worth $568 million in 2016.
- Elimination of the 6 per cent tariff on kangaroo leather.
- Immediate elimination of tariffs up to 4 per cent on paints and varnishes. Exports to Japan worth $3.5 million in 2016.
- Elimination of tariffs up to 6.5 per cent on a range of plastic products (worth around $61 million in 2016), most on entry into force.
- Immediate elimination of tariffs of 4 per cent on sausage casings. Australia’s exports worth $37 million in 2016.
- Immediate elimination of tariffs (up to 4.8 per cent) on shaving creams, deodorants and lanolin. Exports worth over $4 million in 2016.
Duty-free access continues for: pharmaceuticals and vitamins ($100 million in 2016); automotive parts ($85 million in 2016); medical instruments and apparatus ($116 million in 2016); wood chips and paper products ($569 million in 2016); and sheep skin and cow hides (around $3 million in 2016).
A small number of products sensitive to Japan are excluded from tariff concessions, including some fur skin and leather footwear. These products are excluded in all of Japan’s other EPAs and our exports of these products to Japan are negligible.