Japan

The Japan-Australia Economic Partnership Agreement (JAEPA) was executed in July 2014 and entered into force in January 2015.

The JAEPA is expected to be of great mutual benefit to both countries with Japan being Australia's second largest trading partner and its largest beef market. The agreement is considered to be one of the 'most liberalising' trade agreements entered into by Japan, providing Australian exporters with various advantages over their international competitors.

Benefits in respect of beef are secured by way of Australian beef exports being exempt from Japan's 'snapback' mechanism. If it's applied, this mechanism would enable the Japanese government to increase tariffs to 50% in the event of an increase in imports. There is, however, an alternative discretionary safeguard mechanism in its place.

Tariff cuts under the agreement were scheduled upon entry into force on 15 January 2015 and again on 1 April 2015, with continuing cuts over the following 18 years.

While Japan's services sector is already reasonably open, the JAEPA provides guaranteed access for financial, legal, education and telecommunication services.

For detailed FTA information, please visit: http://dfat.gov.au/trade/agreements/jaepa/Pages/japan-australia-economic-partnership-agreement.aspx

Date in force

  • The JAEPA entered into force on 15 January 2015.

Direct benefits

On full implementation, 97% of Australian exports to Japan will be duty free.

Almost all resources, energy and manufacturing exports will be duty free.

A number of agricultural industries such a beef, fruit and vegetables will receive gradual tariff reductions with some being duty free by 2024.

Below you will find a way to look up the tariffs associated with a SELECTION of popular Australian exports. PLEASE NOTE: this is not a tariff calculator OR an exhaustive list. We recommend obtaining professional advice for products not listed here.

Indirect benefits

Subject to certain thresholds, the Japanese Government procurement market will be open to Australian exporters.

Services providers will benefit through receiving treatment equal to Japanese firms and steps being taken to develop frameworks for mutual recognition in respect of professional services qualifications.

  • Australian service providers to Japan are to be treated no less favourably then Japanese service providers. Generally, a service provider is not required to have a representative office, any form of enterprise or be resident in Japan to provide services
  • Australian financial service providers can provide advice to the Japanese market without having to open a full commercial presence. Regulation of financial services providers in Japan will also have greater transparency
  • Australian law firms have guaranteed access to the Japanese legal services market
  • Australian education providers have guaranteed access to Japan's higher and vocational/technical education services market
  • Agreements in relation to non-discriminatory treatment, regulatory transparency, competitive safeguards and access to telecommunications networks will benefit Australian telecommunications providers
  • The agreement provides for flexible visa access for professionals and their spouses and dependants, simplifying entry and stay in Japan
  • The parties have agreed to encourage mutual recognition of professional qualifications, although the agreement contains the caveat that the responsibility of this recognition process largely rests with independent professional bodies
  • With some threshold exceptions, Australia exporters will be treated no less favourably than Japanese suppliers in respect of Government procurement

Certificate of Origin

In order to be eligible for the tariff and quota concessions provided under the JAEPA, goods exported into Japan must be of Australian or Japanese origin. The JAEPA sets out the process for determining whether a good satisfies origin requirements. If the goods do not comply with the JAEPA Rules of Origin , then they will be subject to the general tariff rate.

In addition to satisfying the rules of origin requirements, certification of origin is also required. Importers, exporters or producers can self certify by completing a JAEPA Origin Certification Document. Alternatively, an exporter or producer may apply for a certificate of origin from an authorised body. Each document may apply to one or multiple goods and can only be used in respect of a single export.

Doing business with Japan

There are many things to consider before embarking upon an export journey. Doing business in Japan presents some unique challenges, but there are a number of key areas to consider before doing any international business.

The areas to consider are:

Business activities and risks

  • Location
  • Legal Structure
  • Direct tax
  • Funding
  • Repatriation of profits
  • Transfer pricing
  • Withholding tax
  • Indirect tax
  • Staffing

For a full checklist that will put you on the right path to doing business in Japan, click HERE.

Want to know more? Visit the Export Council of Australia’s website.