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Parliamentary Joint Committee on Foreign Affairs, Defence and Trade
29/11/2012
Australia's trade and investment relationship with Japan and the Republic of Korea

AMANO, Mr Tetsuro, Minister and Deputy Head of Mission, Embassy of Japan

[10:33]

CHAIR: Would you like to make an opening statement?

Amano : Thank you very much for giving us this precious opportunity to appear today. I would like to express my appreciation to all of the committee members for inviting me on behalf of the Japanese Ambassador to Australia to this precious occasion. Taking this opportunity, I would like to have the honour to make an opening statement concerning the economic cooperation between Japan and Australia, including Japan's basic approach to this relationship.

CHAIR: Please.

Mr Amano : First of all, we appreciate and respect the energetic activities of this committee, including the visit to Japan last August and the holding of public hearings. Basically speaking, Japan and Australia share basic values, such as democracy, and strategic interests. We should cooperate to play the leading role in contributing to security and development in the Asia-Pacific region. On the basis of such ideas, as a strategic partnership the two countries, Japan and Australia, have already made close consultations through various kinds of bilateral and multilateral forums. For example, the Australia-Japan Foreign and Defence Ministerial Consultations—like AUSMIN—which were held last September in Sydney.

However, I would like to remind all of you that this strategic partnership has been made on the basis of a mutual confidence established through our long-lasting, close economic relationship. Already we have passed about 50 or 60 years or so. Both countries are mutually important trade partners. Japan is the second-biggest partner of Australia and Australia is the fifth-biggest partner of Japan. While it is not widely recognised, trade volume between both countries continues to grow. In connection to this, I would like to say one thing: it is a fact that China is now the biggest trade partner of Australia. We know this very well, but I recognise that the economic relationship of Australia and China is different from that of Australia and Japan; namely, one is at the rising stage but the other is at the mature stage. We are just asking you to understand this kind of situation.

CHAIR: Yes, we do.

Mr Amano : The partnerships among Japan's and Australia's private sectors are also very solid, as is exemplified by the activities of the Australia Japan Business Co-operation Committee, which celebrated its fiftieth anniversary last month. Trade and investment between both countries, Japan and Australia, is very complementary. Australia is one of the most important suppliers of energy and mineral resources, and also foodstuffs, to Japan. By contrast, Japan is a major exporter of automobile and other manufactured products to Australia. Japan has also played an important role in investment in the energy and mining sectors and, more recently, we have seen the relationship expanding to broader fields including investment in food processing and finance.

After the Great East Japan Earthquake on 11 March last year, we appreciated very much the heartfelt support from Australia. Japan continues to make the utmost efforts towards reconstruction. Japan is also in the process of reviewing its policy for energy, which is a cornerstone for economic activity. In July, the cabinet of the Japanese government adopted a comprehensive strategy for the rebirth of Japan, in which Japan prioritised four key areas. Firstly, energy and the environment: realising innovative energy as an element of society—we symbolise that as 'green'. Secondly, lifestyle: this means we want to realise the world's leading health and medical care and the welfare of society—we symbolise that as 'life'. Thirdly, agriculture and small-to-medium enterprises—the revitalising of such areas. In addition, Japan will implement growth strategies including the promotion of economic partnerships in the Asia-Pacific area, including Australia. In considering the future economic stability and development of Japan under such circumstances, Japan attaches high importance to further strengthening its partnerships with Australia, which are based on mutual trust and the mutual benefits derived from open trade.

From this point of view, Japan is promoting the bilateral FTA negotiation with Australia. We would like to continue to cooperate in order to achieve an expedient conclusion to the negotiations.

Both countries, Japan and Australia, share the great vision of promoting trade liberalisation and investment in the Asia-Pacific region. Both countries have worked together towards this vision under APEC, which was established by the co-initiative of the two countries. In particular, it is important to achieve the common goal of establishing the FTAAP, the Free Trade Area of the Asia-Pacific. This is a final goal of free-trade negotiations in the Asia-Pacific area.

As a step towards this final goal, Japan would like to promote the negotiations of the RCEP, the Regional Comprehensive Economic Partnership—of course, the Australian government also participates in the forum—which was launched during the occasion of the ASEAN leaders meeting recently. Japan also intends to continue close communication with Australia on consultations towards participating in the TPP negotiations.

Japan, once again, welcomes the active Australian domestic discussion on how to strengthen the relationship with Asia, motivated by the government's publication of the Australia in the Asian Century white paper. Japan hopes to make the bilateral economic ties more solid and close through the mutual continuous efforts for the respective markets to be fair and open. At the same time, we would like to deepen the cooperation and the partnership in regional and international arenas. Last but not least, as all the subcommittee members are aware, the lower house of the Japanese Diet was dissolved on 16 November.

CHAIR: Yes. There is an election coming, in both countries, on similar dates.

Mr Amano : The general election will be on 16 December, and the official announcement may be made on 4 December. On the result of this election, the new government is expected to be organised in the earlier stage of January next year. So, for caution's sake, I would like to ask you all to understand that the measures I have already mentioned here are only based on the policy of the current Japanese government and that I am in a position where I cannot speculate or anticipate any policy of a new Japanese government. However, I believe that Japan's strong commitment to this region, including Australia, will remain unchanged.

Lastly, we once again thank the committee for providing us with this magnificent opportunity to contribute. We would like to count on the understanding and support of the distinguished members of the subcommittee towards a closer relationship between the two countries. We look forward to having the honour of reading the final report of this joint committee. Thank you very much.

CHAIR: Thank you, Your Excellency. That was a nice opening statement. It was reassuring to hear that, while of course you cannot speak for any incoming government—we understand that completely—

Mr Amano : Thank you so much for your understanding.

CHAIR: It was reassuring to hear that, because the relationship is so strong, it will continue, with all of the mechanisms and so on that that entails.

That brings us to our first question. There is a whole lot about the relationship that we were concerned about in a positive way, but the free trade agreement is of course a question on everybody's lips. From the Australian side, and I am not talking from the government side. We are the parliament. but as members of parliament who represent the community we too want that concluded as fast as possible because it is in our common interests. I wanted to make a statement at the beginning.

We heard from the Australia Japan Business Co-operation Committee, who appeared before us in Sydney and who talked about several trade missions in relation to third countries to examine scope for collaborative projects between Australia and Japan. If my memory serves me correctly, the countries were Indonesia and India.

Mr Amano : Yes. We have already promoted this kind of private sector cooperation between Japan and Australia.

CHAIR: Yes, so it is something that you are actively promoting?

Mr Amano : Yes.

CHAIR: Do you see further opportunities for that third-party collaboration with Australia and Japan?

Mr Amano : Yes. Thank you for the question. It is a very important issue in order to promote closer economic relations with Japan concerning the private sector's cooperation outside the country. As Madam Chair has already said, the Japan-Australia joint economic cooperation committee has already promoted this through some try-out missions, firstly, in India. Secondly, last year there was a meeting at Jakarta in Indonesia to hear some of the interest from the local Indonesian companies et cetera and they shared this kind of information in order to make a detailed project for the future.

Concerning the matter of the future, I do not know exactly because this is a private sector issue. Maybe they have discussed the idea in deeper discussion on the basis of each respective private sectors' interests et cetera. But I think that we can expect such a committee, including such a private sector, to enhance and develop the third country cooperative projects et cetera in the near future. When they held the 50th anniversary of the establishment of the joint economic cooperation committee, people made speeches or announcements at the ceremony in Sydney. They said unanimously that they understand that bilateral private sector economic cooperation has already been deepened during this long history of 50 or 60 years and that they must step up to the next stage. It means especially that they understand that they should make such mutual cooperation in infrastructure projects and investment projects, especially in local areas in ASEAN countries and in other areas. I do hope that such ideas will be detailed in the near future.

Mr BRUCE SCOTT: Thank you, Your Excellency, for being here this morning. Japanese tourism to Australia has always been a very important part of our trade and yet we have seen some declining numbers from Japan in recent years. There must be obvious attractions that Japanese tourists want to see in Australia, but are there impediments to Japanese tourists coming to Australia and could Australia do more in addressing the issue? It is a very important part of our trade and I think, through tourism, you get a better understanding of a country culturally and in so many other ways. What do Japanese people look for when they come here, what are the attractions, are there impediments and could Australia do more to promote Australian tourism in Japan?

Mr Amano : It is a very important question. Australia was one of the meccas for the Japanese tourist over 10 years ago, especially the honeymoon couples. They desire to come here, especially the Gold Coast or Cairns—very nice beach areas. Honestly speaking, the trend for Japanese tourists going to overseas countries is not constant. It is in the short range or medium range area—for example, China and Asian countries et cetera. It is tradition now. The Japanese tourist companies made announcements to the public et cetera. For Japanese people Australia is a very famous tourist spot. I think that it will possible for us to vitalise mutual tourism in the near future. Next year, 2013, we have already made a very big cooperation between the Japan tourism association and the Australian tourism association. We have some events that we have already planned. We would like to ask you to expect such a special event to vitalise mutual tourists between Japan and Australia.

On the Japanese side, Australian tourists are very important customers to the Japanese people, especially in skiing in Hokkaido or Niseko; that is very famous. They are one of the Australian colonies! So Australia is a very famous customer for Japan.

We understand very much that Japanese tourism to Australia is going down a little bit now. In cooperation with the Australian tourism association, we would like to vitalise the Japanese tourists interested on the Australian side.

CHAIR: The working holiday scheme went up by 18 per cent, so that is encouraging.

Mr Amano : In one year about 6,000 or 7,000 holiday workers come here. When they come back to Japan they communicate what a beautiful country, what an attractive country, Australia is. They are very good communicators. Sometimes we encourage them in this kind of role.

Mr MURPHY: On this subject, Your Excellency, do you think that the high value of the Australian dollar is being a significant barrier as to the reduction in the number of tourists?

Mr Amano : One of the elements as to the Australian dollar is that it is very highly valued et cetera but I think, comparing it with others, the element is not so big because some Japanese tourists are still coming here, so they continue to come here, to pass time on a good holiday, in Tasmania or in Cairns or on the Gold Coast—these very famous areas. A main reason on the Japanese side is that we have domestic problems and if the Japanese people succeed with revitalising the Japanese economy maybe, as I said earlier, the tourists will come back here, to the Australian side. Australia is a very advantaged state because we have no time differences other than almost one or two hours. It is very good for one's health.

CHAIR: It is very convenient. Yes, for one's health it is excellent.

Mr Amano : Also, we have direct flights from the area between Narita and Kansai airports and Sydney or Cairns. Now the Japanese flights are very cheap flights. Jetstar has already started them.

CHAIR: Yes, we visited Jetstar headquarters. We met with them there.

Mr Amano : Yes, from Narita to Darwin and I think it is a very helpful idea to encourage Japanese tourism to Australia. Sometimes we have asked for more Japanese flights from those such as Japan Air Lines for more tourism between Australia and Japan. It is an ongoing project now, so please understand that, and we would like to ask you to help us to encourage such a kind of mutual liaison.

CHAIR: It is in our interests to help each other.

Mr Amano : Yes, exactly.

CHAIR: We recognise that. We will go to Mr O'Dowd and this might be our last question because we are close to our 11 o'clock mark.

Mr O'DOWD: I think that since the GFC all international airlines have been under some sort of pressure and our Qantas has joined with Japanese airlines and so there are all these little mergers going on around the world.

Mr Amano : Yes, I think so.

Mr O'DOWD: I think it is pretty tough out there, also because of our Australian dollar, as John Murphy said.

Mr Amano : Qantas has a very strong idea to develop tourism between Japan and Australia and sometimes is able to offer very good deals in cooperation with our Japanese airlines. This is an area we discuss sometimes with the Qantas side as to how we make a good contribution to the development of tourism between Japan and Australia. Qantas is a very big flier between Japan and Australia.

CHAIR: Your Excellency, it is time to finish. We have still got lots of questions but we will continue the discussion, as we do, when we meet outside of the formal hearings.

Mr Amano : Yes, I do hope so.

CHAIR: I would like to thank you for appearing today and for the cooperation that we, the Trade Subcommittee of the Joint Standing Committee on Foreign Affairs, Defence and Trade, have received in undertaking our inquiry. So I want to thank you for that.

Mr Amano : Finally, I want to say one other thing. It is about the EPA/FTA between Japan and Australia.

CHAIR: Yes, the EPA, which we call the FTA. You call it the EPA and we rather like EPA. As a committee we like EPA.

Mr Amano : With the EPA between Japan and Australia we cover 21 areas, so it is very big. Whenever our Prime Minister has a meeting with Prime Minister Gillard both premiers encourage the process of this sort of negotiation—

CHAIR: Yes, of the EPA

Mr Amano : Yes, in order to have a good conclusion in as many areas as possible. So we are now making the best effort to promote such kind of negotiation as to the final goals et cetera.

CHAIR: That is very reassuring.

Mr Amano : So we hope to make a possibly quick final conclusion.

CHAIR: We will be very pleased to see the signatures on the dotted lines. That is very reassuring.

Mr Amano : I am very sorry to have delayed you.

CHAIR: No, and that was a very good last point to finish on. You will be sent a copy of the transcript of your evidence to which you can make corrections of grammar and fact.

Resolved (on motion by Mr Scott):

That this subcommittee authorises publication of the proof of the transcript of the evidence given before it at public hearing this day.

Committee adjourned at 11 : 00