Japan and Australia to talk trade amid farm sector row

Yen coin
Image caption Japan is hoping trade deals will help boost its growth rate and create jobs

Japan and Australia will hold talks in Tokyo on Monday aimed at securing Japan's first free-trade agreement with a major agricultural exporter.

Negotiations fell apart last April over calls to open up Japan's farming sector.

For years Japan has protected its inefficient farming industry, and has put high tariffs on imports.

But Japan's sluggish economy could be causing a shift in policy and thinking, analysts said.

"There has been some change in attitude, even in the strong farmer lobby groups," said Akio Okawara of the Sumito Research Institute.

"There is a realisation that they have to be a little accommodating. Japan needs to change."

Cultural traditions

Japan cites food security and cultural reasons for its protection of the farming sector.

It has placed heavy tariffs on imported products such as grains. On rice the import levy is 800%, while on wheat it is 250%.

According to the BBC's Phil Mercer in Sydney, one Australian farming representative said the position taken by Japan's Ministry of Agriculture during previous rounds of talks had reflected the sensibilities of many Japanese farmers.

The representative said Japan's farmers were "old and very conservative".

Estimates put about half of Japan's farmers at more than 65 years of age.

Stalled talks

Japanese Prime Minister Naoto Kan has said he wants to prioritise trade to boost Japan's economy.

Bilateral trade between Australia and Japan is worth about $60bn (£37bn) annually.

Some analysts say that while Japan is still keen to protect its domestic markets, it has other needs that may prompt it to make compromises at the negotiating table.

Roland Buerk, the BBC's correspondent in Tokyo, says Japan would welcome greater access to Australia's vast supply of raw materials, particularly uranium for nuclear power generation.

Japan is also heavily dependent on other imports to meet its energy needs.

"If the talks don't result in an agreement it might not hurt Japan's economy in the short term but in the long run Japan needs to open up its markets," said Mr Okawara of the Sumito Research Institute.

Trade Landscape

Image caption Japan's protectionist measures on the farming industry caused talks to break down in April

Analysts say the bilateral trade talks with Australia are a test-case for Japan.

In June, Prime Minister Kan will have to decide whether or not to take part in a trans-Pacific free-trade agreement.

The US has taken the lead on this pact and it involves eight other countries.

But for Japan to take part, the government would have to agree to open up many more of its barriers to trade.

Left behind?

Many of Japan's trade rivals in the region have been marching ahead with deals aimed at boosting sales and economic growth.

Last year South Korea inked free-trade deals with the US and the European Union giving its electronics and car companies better access to those markets.

Analysts said that this put further pressure on Japanese companies and had amplified the threat of them being left behind in a competitive global marketplace.

Not least because China has also signed trade deals with the US and is expected to overtake Japan as the world's second-largest economy later this year.

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