• The negotiation of the Economic Partnership Agreement (EPA) and the Free Trade Agreement (FTA), which complements the WTO multilateral trade system, is promoted. In the process of negotiation, the influence on domestic agriculture is sufficiently noticed and a strategic approach is taken based on the principle of “Protecting whenever necessary” with due consideration for the progress in structural reform of domestic agriculture.

• There is a wide difference in agricultural structures between Japan and Australia. More than half of the agricultural and fishery products imported from Australia such as beef, wheat, dairy products and sugar are the products which are important agricultural products in Japan. The abolition of tariffs on such important products has significant effects not only on agricultural activities, but also on the whole society because of the effect on multifunctionality including preservation of national land and environment. In the process of negotiation, the Government sufficiently considers the influence on domestic agriculture, forestry and fisheries, and makes a concerted effort to insist on the Japanese conditions with patience based on the principle of “Protecting whenever necessary.”

Progress of Negotiation of EPA and FTA on the Side of Japan

2002	2003	2004	2005	2006	2007
Singapore	(Jan.)	Entered into force (Nov.)	(Apr.-)	(Mar.)
Mexico	(Nov.-)	(Sep.)	Entered into force (Apr.)
Malaysia	(Jan.-)	(Dec.)	Entered into force (Jul.)
Philippines	(Feb.-)	(Nov.)	(Sep.)
Chile	(Feb.-)	(Mar.)
Thailand	(Feb.-)	(Sep.)	(Apr.)
Indonesia	(Jul.-)	(Nov.)
Brunei	(Jun.-)	(Dec.)
ASEAN as a whole	(Apr.-)
Korea	(Dec.-)
GCC	(Sep.-)
Vietnam	(Jan.-)
India	(Jan.-)
Australia	(Apr.-)
Switzerland	Preparatory meeting (Mar.)

☑: Signed the Agreement ★: Negotiation for a general review of the Agreement ●: Negotiation ▲: Agreement in principle

Note: Cooperation Council for the Arab States of the Gulf (GCC) is organized by six countries including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates.

Comparison between Japan and Australia from the Aspect of Agricultural Structure

Japan (A)	Australia (B)	(B/A) [times]
Total land area (Unit: 1 million ha)	38	774	20
Area for farmland (Unit: 1 million ha)	5	447	89
Mean area under management (ha/farm)	1.8	3,385	1,881
Per capita farmland area (ha/person)	0.04	22.9	573

Source: Prepared by MAFF according to "FAOSTAT" (FAO), "Census of Agriculture and Forestry" (MAFF) and "Statistics of Cultivated Land and Planted Area" (MAFF).

Note: The listed data on the total land area and area for farmlands were those obtained in 2002. The indexes were those obtained in 2005 in the case of Japan and those obtained in 2003 in the case of Australia.

Conditions of Import from Australia (2005)

Source: Prepared by MAFF according to “Trade Statistics,” Ministry of Finance Japan

Note: Coal, ironstone and liquefied natural gas have already been included in duty free goods.

## Significance of Tariffs

Tariffs are an important means to correct the gap in competitiveness resulting from the difference in national land conditions, and WTO allows the member countries to impose tariffs. The Japanese government set tariff rates to a certain level for several products subject to tariff rate quota, including rice to prevent their disorderly massive import. If tariffs of these products are eliminated, it is expected to significantly affect not only Japanese agriculture but also the entire Japanese society. According to the estimate, 1) the total agricultural output is to be reduced by 40% (reduction of about 3.6 trillion yen) and 2) the food self-sufficiency ratio on a calorie basis is to be reduced from 40% to 12%.

Tariffs play an important role in continuously sustaining and developing agriculture in Japan.