Japan holds first trade talks with Australia
Wednesday, 27 February 2008

Agence France-Presse . Tokyo

Japan and Australia on Monday began their latest talks on reaching a free-trade deal in the first negotiations since prime minister Kevin Rudd took over in Canberra in December.

It is the fourth round of talks on reaching a free-trade agreement, which would be the first between Asia's largest economy and a major agricultural exporter.

Rudd's predecessor John Howard had championed the drive for a free-trade deal with Japan, Australia's top trading partner, and has also opened talks on a trade pact with China. 'Although this is the first round of negotiations since Rudd took office, we don't see any significant changes in Australian policy on this issue,' said an official at Japan's trade ministry.

'This morning we exchanged lists of offers and requests about slashing tariffs on traded goods as well as on policies on services, intellectual property and a broad range of other fields,' he said.

The talks will continue through Friday, officials said. Rudd, whose Labor Party trounced Howard in elections, had been privately viewed with concern in some quarters in Tokyo due to his known affection for China, which has uneasy relations with Japan. Rudd quickly dispatched his foreign and trade ministers to Tokyo after taking over to show commitment to the alliance.

However, relations have also been tested as the Rudd government takes a tougher line to stop Japan's annual whaling expedition in the Antarctic Ocean.

Japanese officials have stressed that the talks with Australia are not necessarily a prelude to an accord as key obstacles remain. Japan closely protects its politically powerful farmers, arguing that agriculture is integral to the national culture.

A deal with Australia would risk further inflaming Japanese rural communities, which handed the opposition a landmark victory in upper house elections last year.

Japan's agricultural ministry last year warned that domestic production of wheat, sugar, dairy products and beef—four major Australian products — would be seriously damaged if import tariffs were eliminated. However, a deal would also help Japan meet its vast need for energy imports.

Australia has the world's largest known reserves of uranium, while Japan is trying to boost nuclear power generation.

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