Reports from recent AJS-NSW Events

Events 2014

Food safety and security trends – the Japan Australia Economic Partnership

Reporter: Terry Crotty

July 8 2014

The July 9 event held at TressCox Lawyers was well attended by AJS members and industry representatives. The event coincided with the visit to Australia of Japanese Prime Minister Shinzo Abe.

AJS NSW President Philip Mitchell welcomed guests and introduced the two guest speakers – David Thorn from NAB and Bruce Gosper from Austrade.

Introducing David Thorn, Philip Mitchell gave an overview of his current position as Global Head of Consumer Sectors and Head of Institutional Banking in Asia for NAB. He has been with NAB for 12 years after previous experience at BNP Paribas and Commonwealth Bank. He has developed a solid reputation as a leader in the food safety and security and investment fields. He qualified as an accountant with a Business degree from University of Technology Sydney.

Being the largest agri-bank in Asia, NAB has built up considerable Australian expertise over 150 years in that sector.

His address commenced with the significant observation that global food demand will be driven by Asia and will almost double by 2050, with protein and dairy being the key drivers. He referenced two agreements between Australia and Japan which will deliver significant benefits to both countries and which offer great opportunities to Australian producers and for investment in Australia – the recent JAEPA (Japan Australia Economic Partnership Agreement) and the TPP (Trans Pacific Partnership).

As the world population increases to 9 billion by 2050, global food demand is expected to grow by 75%. As incomes increase in the developing nations, there will be a pronounced shift to meat, dairy and protein based foods, leading to an increase in the demand for effective use of land and water.  In developing nations there will be a move to high value meat and seafood to meet aspirational consumption desires. The Australian beef industry has seen its exports to China grow from virtually nothing to now account for about 20% of total beef exports. However since 2010 Japan’s share of the Australian beef exports has fallen from 45% to 20%. Asian countries will generate the strongest demand and this will see the region’s demand for food double over the next decade.

Japan is currently the world’s largest net importer of food, with China rapidly catching up.  Growth in China is expected to be the major driver of growth accounting for 43% of total global increases in food demand. Australia will continue to be a major exporter to Japan and JAEPA will see opportunities grow for Australian producers and exporters.

Australia has four standout factors which position it well to take advantage of the opportunities in the coming decades.

1.      Closeness to Asian markets
2.      Solid biosecurity reputation – food safety is now a global issue and it is the number one issue for Chinese consumers – Australia is well placed to take advantage of its already strong global biosecurity reputation
3.      Stable political environment
4.      Four times the arable land per capita of its nearest competitor, the US.

When JAEPA is fully implemented, more than 97% of Australian exports to Japan will receive preferential access to Japan or will enter duty free into Japan.

With the Agreement in place, Australia is the first major agricultural producer to unlock Japan’s high import barrier.

David Thorn concluded his presentation by reinforcing the significant opportunities which will come about for investment in world class businesses which supply food. To meet this phenomenal increase in demand for food, foreign investment, coupled with domestic investment, will become increasingly necessary. With 17 million hectares of arable land available in Australia, investment in water, transport and civil infrastructure is critical to take advantage of this opportunity.


Philip Mitchell then introduced Bruce Gosper, CEO of Austrade. He was appointed Austrade CEO in February 2013, following a distinguished career in the public service including appointments as Minister – Counsellor (Agriculture) in Japan and Minister - Commercial in Washington. He is a graduate of Macquarie University and University of New England.

Mr Gosper reflected on the late 1980s during his appointment as Minister – Counsellor (Agriculture) in Japan. At the time it was not thought that a Free Trade Agreement with Japan would be possible. The 1957 Economic Agreement with Australia was instrumental in establishing strong economic ties between Japan and Australia, which in subsequent years has seen very strong year-on-year growth in business between the two countries.

JAEPA represents a high quality Agreement and reflects the very close relationship between Japan and Australia.

Australian manufacturers will benefit from specific concessions on products exported to Japan. Similarly Australian consumers will benefit from reduced prices of Japanese goods and services. Australia will benefit from gaining an early competitive advantage over other nations which trade with Japan, with the Agreement eventually covering 97% of Australian exports to Japan.

Service firms will be the first to benefit with businesses in the legal, telecommunications and financial services sectors being able to access opportunities from the early days of the Agreement.

Australian consumers should shortly benefit from reduced tariffs on appliances and electronic goods, while Japanese consumers will benefit from reduced prices for Australian produce including food and wine which will also benefit from increased quotas allowing producers to export in higher quantities to Japan.

Since the 1960s the Australian beef industry has had a significant presence in Japan, developing its understanding of the Japanese local market and gaining a reputation for a consistently high quality product meeting the highest standards of food safety. As a result, beef has become Australia’s largest export product to Japan.

JAEPA will deliver significantly reduced tariffs to Japanese consumers with beef exporters expected to take advantage of increased Japanese demand.  The consistent demand by Japanese consumers for high quality produce has made, and will continue to make, the beef industry and other producers focus on quality.

Australian beef encapsulates 3 principles demanded by Japanese consumers:

  • Quality
  • Continuity, and
  • Trust

Together with beef, the demand for a wide range of Australian produce, including fruit, vegetables, olive oil and oysters to name a few, will grow significantly.

He pointed to the development of extensive infrastructure projects, including the development of northern Australia, as being critical to fully take advantage of the opportunities which will arise.

The key message to Japan is “Australia is open for business”.

He concluded his address by reaffirming Austrade’s desire to look for opportunities for Australian business in Japan and globally and that Austrade is actively working for the joint benefit of Australia and Japan.

Philip Mitchell thanked both David Thorn and Bruce Gosper and encouraged Australian businesses to look at how they can leverage the great opportunities that JAEPA offers.


Previous Event Reports :

Tohoku - 3 Years On - March 2014

Nikkei Australians- November 2013

August 2013 - Japanese Investment

Mark Willacy and others Jan - July 2013

2012 Events     
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