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Another step forward on the Australia-Japan FTA study.

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Media release

21 July 2006- MVT40/2006

Another Step Forward on the Australia-Japan FTA Study Australia is on track to complete the feasibility study on a possible Australia-Japan FTA by the end of the year, Deputy Prime Minister and Minister for Trade, Mark Vaile said as the fourth meeting of the Australia-Japan Free Trade Agreement Feasibility Study group concluded in Canberra today.

"The relationship with Japan is one of Australia's most important. As our top trading partner one fifth of our merchandise exports go to Japan", Mr Vaile said.

Australia's minerals and energy exports account for a big portion of the trade with Japan. They alone are equal to 3.5 per cent of Australia's GDP and are growing. Since October 2005, Australian producers have new agreements to sell almost 8 million tonnes per annum of LNG to Japan over the next 25 years.

Mr Vaile said, "Japan is also the largest buyer of Australian agricultural exports. It is a relationship that continues to yield enormous mutual benefit and one we cannot take for granted. We need to look at ways to further strengthen our comprehensive strategic partnership.

"An FTA would cement and further deepen our ties and help to ensure Japan's future supplies of minerals, energy and food, against the backdrop of increasing demand for resources.

"Japan today is significantly different from Japan a decade ago and we want to make the most of the many new opportunities. Earlier this year, for example, Macquarie Bank formed an important joint venture with Japan's Shinsei Bank to provide advisory services on infrastructure asset acquisitions".

Following the recent Australia-Japan Conference, held in Tokyo on 23 June Mr Vaile said, "I was particularly pleased that Australian and Japanese participants supported strongly starting negotiations on a comprehensive, WTO-consistent FTA in 2007".

The Australia-Japan FTA Feasibility Study process is entering its final stages. The Group has

finalised consideration of the large majority of issues to be addressed in any FTA and heard the views of private sector representatives on a possible FTA. It also agreed to begin work on the group's final report.

Contact: Mr Vaile's Office 02 6277 7420, Departmental 02 6261 1555