PRIME MINISTER:
Well ladies and gentlemen, Mr Truss and I have called this news conference to announce with great pleasure that next year negotiations for a Free Trade Agreement between Australia and Japan will commence. An announcement to the same effect will be made in Tokyo today by the Japanese Prime Minister Mr Abe, to whom I spoke at length last night.
Next year, of course, will mark the 50th anniversary of the signing of the historic Commerce Agreement between Australia and Japan back in 1957, which laid the foundation stone for the modern trading relationship between Australia and Japan. Japan remains our best customer. Japan is a great friend of Australia. Australia has no better friend in the Asian region than Japan. And it is fitting that these negotiations will start in the 50th anniversary year. It's also significant that that Commerce Agreement was signed during the Prime Ministership of the current Japanese Prime Minister's grandfather way back in 1957. And I also take this opportunity of paying tribute to the then Deputy Prime Minister of Australia, John McEwen, who trail blazed the Commerce Agreement in the face of what was then still considerable opposition in Australia to the notion of a Commerce Agreement with a country that had been Australia's enemy only 12 years earlier.
We have agreed that everything will be on the table, including agriculture. We recognise that that is very sensitive for the Japanese. We recognise that in putting everything on the table all options will need to be explored. But the value of adding a Free Trade Agreement to the armoury of trading arrangements between our two countries is enormous. It will be a comprehensive agreement, if it's concluded, and it will of course be consistent with World Trade Organisation rules.
We're not going to set any deadline and both of us fully understand that this will be a difficult negotiation. But it is quite a step forward to reach an agreement to start the negotiations with everything on the table. It will obviously generate significant economic gains for Australia if it is concluded and one estimate has suggested that it could produce a 30 to 40 billion dollar increase in Australia's GDP. I stress that that is but one estimate. But it will be very comprehensive and when you bear in mind how big a market Japan is, and what a close trading partner Japan is of Australia, it is enormously important.
In concluding these remarks, can I thank Warren Truss and his predecessor Mark Vaile for the excellent work that both of them have done in the Trade portfolio to lay the groundwork for the agreement I reached with Mr Abe yesterday. Many people did not think we would ever start these negotiations. Many people thought the barriers were too great and the hurdles were too high and it is a tribute to the work of the Ministers on our side, Mr Vaile and Mr Truss, and their Japanese counterparts.
But I do welcome this agreement to start the negotiations. It is a sign that under the new Prime Minister, Japan intends to maintain the intimacy of its relationship with Australia and that is very important. I have now spoken on a number of occasions to Mr Abe and, of course, I met him at the APEC meeting. We were to have met in Cebu this week, but that meeting has been cancelled and we have already, in the short period that he's occupied that position, established a very good understanding with each other. We will work together very closely. I will visit Japan next year and Mr Abe indicated to me on the phone last night that he would visit Australia as well next year. So in the 50th anniversary year of the Commerce Agreement, there will be reciprocal visits to the two countries by the two Prime Ministers.
JOURNALIST:
Is this agreement going to happen if there is not some sort of significant concession on agriculture? Is that the key?
PRIME MINISTER:
Look I think you start these things with everything on the table, recognising that there has got to be give and take on both sides, but you don't start saying well look, this must happen, otherwise it won't work out. Obviously we want some movement on agriculture. Obviously we would like that, but I am not going to start trying to quantify that. That's very silly.
MINISTER TRUSS:
But it is a significant step forward. This is the first time Japan has agreed to commence discussions with another country for a Free Trade Agreement with everything on the table including agriculture. Now Japan is already our biggest market for agricultural produce. There's potential for that market to expand and these discussions certainly open the potential door for new agricultural trade between our two countries.
JOURNALIST:
How protected is the Japanese agricultural market?
MINISTER TRUSS:
Well it is very protected. There are all sorts of barriers, huge tariffs and a range of protective mechanisms which have placed barriers towards free and open trade in agriculture. But in spite of all that, Japan has become our most important market for agricultural produce. We want to break down those barriers. That will benefit not just Australian farmers, but just as importantly, Japanese consumers.
JOURNALIST:
What about the Australian car industry, will that be on the table as well? I mean the future of Mitsubishi and local manufacturing, are they going to...
PRIME MINISTER:
Well we're not sort of; we want them to stay. I mean there's not, that's not a real issue of contention but everything is on the table. But clearly we are not going to negotiate anything away that hurts our manufacturing industry.
JOURNALIST:
Prime Minister, Brendan Trembath from AM. In Japanese supermarkets you can already find Aussie beef, Australian dairy products, a little bit of Australian wine. What do you want to see on the table?
PRIME MINISTER:
Well we want to see everything on the table and see what additional access we can obtain, and obviously the Japanese want reciprocity. But I don't know that I can be more detailed than to say that everything will be on the table, and as Mr Truss said, this is the first time that Japan has indicated a willingness to sit down and negotiate a Free Trade Agreement with a country where everything, including agriculture, is on the table. Now that doesn't mean to say we're going to reach easy agreement, but it's a huge start to have everything on the table. That is an enormous start.
JOURNALIST:
Minister, if I might ask you, to what extent might you be helped by the average age of Japanese farmers? They're not getting any younger; they're working in an industry that appears to be shrinking.
MINISTER TRUSS:
Japan has very high and broad ambitions for its agricultural community. They see themselves as potential exporters of agricultural products and so they are interested also in what market opportunities there might be for Japanese farmers in Australia. From our perspective, we believe Japanese consumers are paying unnecessary and unfair penalties because of the tariff regime. You mentioned that there is plenty of Aussie beef in Japan. That's true, but it's all there with tariffs of above 40 per cent and that's just simply adding to the costs of Japanese consumers. It's not protecting Japanese agriculture, but it's effectively adding to their cost. And the same applies to a wide range of other products. We think there is potential for more horticulture. Rice is obviously a very sensitive product for the Japanese and we don't have much spare rice at the present time anyhow with the drought the way it is, but these products are all on the market as the Prime Minister rightly said. Keeping them there through the discussions will be a challenge, but we certainly are very pleased that the full range of not only goods, but also the services and investment are all a part of these discussions.
JOURNALIST:
So is it fair to say that lowering those tariffs is a crucial issue?
MINISTER TRUSS:
Well that's an important priority for Australian agriculture, but access for other products will also be important.
JOURNALIST:
So on the other side of the coin Minister, how does Australia go towards meeting Japan's need for a stable fuel supply? What do we have to offer them?
MINISTER TRUSS:
Well we are by far their most important supplier of minerals and energy and they want to secure a reliable supply. They note that Australia is undertaking significant energy contracts with other major buyers in the region, and so they're keen naturally to ensure that Japan is still an important customer for Australia's products. So they'll certainly be looking for assurances in relation to energy supplies and I am confident that Australia has the capacity to supply Japan's needs for future generations.
JOURNALIST:
Do they have any interest in nuclear power?
PRIME MINISTER:
Well Japan has quite an interest in nuclear power and, you know, we have...we're a country that has a lot of uranium and there are safeguards agreements and everything. They're like anybody else. If they adhere to the nuclear non-proliferation agreement, we're prepared on appropriate terms to export. But this is not, I mean, these are areas where we already have a very, particularly in energy, established relationship. Australia has been selling energy capacity to Japan for decades. Anything else?
JOURNALIST:
Just one historical point. You mentioned earlier the period after the war, getting them to the point where the countries resumed trading. What was the turning point?
PRIME MINISTER:
Well I think the turning point was in 1957. I think history will record that the determination of the Menzies Government, and particularly John McEwen, who was the Deputy Prime Minister and the Trade Minister, his determination because he was visionary enough to realise that Australia and Japan, despite their military conflict only 12 years earlier, that Japan and Australia had an enormous future in this part of the world and his judgement was vindicated. He faced very fierce opposition. The Labor Party opposed him at the time. Large sections of the RSL opposed him, but he stood his ground and I remember the debates very vividly as a young person having just left school. And it was one of those events that marked him out as somebody who was determined to argue a difficult case in the longer term interests of the country. And sometimes you have got to do that and withstand the volatility and the prejudice, which was understandable; it was only 12 years after the war, and I could understand, and everybody could, the feelings of people, but he was absolutely right when you were thinking of Australia's long term interests and he deserves a great deal of credit for that. And, of course, Mr Kishi, who was the Japanese Prime Minister at the time, is Mr Abe's grandfather.
JOURNALIST:
Prime Minister, can I just ask, you're travelling to the worst areas...
PRIME MINISTER:
Yes I am.
JOURNALIST:
...affected by the bushfire. What message do you bring?
PRIME MINISTER:
Well it's just a message of reassurance. I am going to say to the people who are affected and living under such stress and difficulty, that their fellow Australians are thinking of them. And it's very important at a time like this that I go and say to them, we're thinking of you, we're helping you in every way we can; to thank the fire fighters; those men and women are quite remarkable, so that the people affected understand that they are not alone. We work very closely with the state governments. In the past few days I have spoken to both Mr Bracks and Mr Lennon. I spoke to Mr Lennon, the Tasmanian Premier yesterday and I offered both the premiers any additional assistance. There is already a longstanding disaster relief system between the Commonwealth and the states. We are already providing a lot of help through the military. We have, of course, provided some additional financial help in the past in relation to the big helicopters and in addition, of course, the disaster relief arrangements involve the Commonwealth picking up the tab once the cost rises above a certain level, of picking up a large amount of the tab. So there are mature, well established arrangements. But I am going there today to say directly to the people that their fellow Australians are thinking of them, they feel for them. It's a worry that these fires are starting so early and in such a large number of areas. Reports overnight from Western Australia, and, of course, there have been some, quite a number in New South Wales. The most serious front still in size is in Victoria, but the severity and intensity on the east coast of Tasmania is a source of great concern and I will be visiting part of Victoria and the east coast of Tasmania today. So I will have an opportunity to talk very directly to people and assure them that they are in the thoughts and will receive the assistance of their fellow Australians at this very difficult time for them.
JOURNALIST:
Prime Minister, just briefly, are you concerned about reports that a member of your Muslim (inaudible) Iktimal Hage-Ali has been questioned about drug matters?
PRIME MINISTER:
Well it's an unfortunate incident but that is a matter for the New South Wales Police and you would not expect me to comment on it would you?
JOURNALIST:
Mr Howard, Barnaby Joyce overnight has described the situation in Iraq as being like a civil war. A member of the Government now describing it as a civil war. What do you think of that comment?
PRIME MINISTER:
You wouldn't expect me to comment on that either. Thank you.
[ends]