Advertisement
Advertisement
Advertisement
TOKYO, Japan, August 8, 2007 (Starlink Media) – The signing of a landmark commerce agreement in 1957 saw Japan become Australia’s top trading partner a decade later, a position it has held for 40 years.
Austrade Japan head Phil Ingram says a planned free trade agreement between the two US allies is set to further cement the relationship in the new century, with changes in Japanese society and economic restructuring set to yield further opportunities for Australian business.
While describing the commerce agreement as “a very important milestone in our engagement with Japan,” Mr Ingram said an FTA would be an important step forward.
“I think it’s really encouraging that Japan and Australia are in the middle of negotiations for a free trade agreement because I think that’s going to set the tone for the next 50 years,” he said.
“It’s not just in agriculture – obviously that’s where the barriers are the highest in Japan and we would be hoping to get some good gains there for Australian products – but I feel that in services related to the financial areas, to legal services, transport services, retailing and a whole range of other services, that we can also benefit from an FTA with Japan.”
The gains from such an FTA are expected to be huge for both countries. According to a joint government study, the gross domestic product of Australia and Japan could increase by up to A$39 billion and $29 billion respectively, in the first 20 years.
The head of the Japanese arm of the Australian government’s trade arm said it would also alert Australian businesses – typically more comfortable in the English-speaking markets of the United States, United Kingdom and New Zealand – to take another look at the East Asian powerhouse.
“I think it’s also going to be important for us by having a head-turning effect,” he said.
“The Japanese will wake up and say, ‘Gee, I didn’t know Australia can actually do and produce these other great and wonderful value-added products and services.’ So I think it will mean that Australian companies will get many more opportunities out of the Japanese market.”
Despite a decade-long slump in the 1990s dubbed the “lost decade,” Japan appears to have turned the corner in recent years with its longest period of economic growth since the end of the Second World War. Although China is rapidly catching up, Japan remains the world’s No. 2 economy with GDP of around A$6 trillion in 2005 and per capita GDP of A$46,900.
Led by the reformist Koizumi government, economic restructuring has opened up new opportunities, Mr Ingram said.
“The [Japanese] economy has restructured and gone through a series of changes in recent years that have made it more productive and more competitive, therefore creating a whole range of opportunities for Australian businesses,” he said.
He pointed to transport as one area where an Australian exporter had already seen results, with Tasmanian high-speed ferry producer Incat delivering its biggest boat ever to Japan in July this year.
Known as the “Natchan Rera,” the 112-metre vessel will take up to 800 passengers and around 200 cars and trucks between the main island of Honshu and the northern island of Hokkaido.
“This is a real breakthrough, and it’s only really occurred because the Japanese have changed their regulatory system, and enabled us now to export these fantastic vessels to Japan,” Mr Ingram said.
Demographic changes have also caught the attention of media and business in Japan. The world’s fastest-ageing country is seeing society transformed, with a falling birthrate and resistance to immigration leading to a forecast decline in the labour supply and population.
But it’s not all doom and gloom. With the retirement of the baby boomers – the richest retirees in history – a vast army of wealthy customers with time to spend their money has suddenly materialised.
“The Japanese proportion of elderly people over 65 who are also very healthy is the largest in the world,” Mr Ingram said.
“We think that that market has a lot of potential for Australia because we can offer them the sorts of lifestyle activities that are not so obviously available in Japan.”
He pointed to hobbies such as photography, bird-watching, and arts and crafts as some of the opportunities, while education providers could look to capitalise on retirees’ thirst for knowledge.
Japan’s ultra-low interest rates – the official cash rate of 0.5 per cent compares to Australia’s 6.5 per cent – have also sparked demand for alternative investments.
“These people have retired with large sums of money, with large payouts that they’re keenly looking to invest,” Mr Ingram said.
“So investment management, financial planning, and everything related to making sure that people are secure in their now very long elderly period are also opportunities.”
He said those seeking to target this market would need to consider the particular needs of the elderly.
People who are elderly are looking for more interesting and more specific products that meet their needs, such as healthcare, skincare and food products, he said.
“You’ve got to start thinking natural, you’ve got to start thinking small portions, you’ve got to start thinking simple and easy to understand,” he said.
“We see huge opportunities in that market, as a result of the demographic changes going on in Japan.”
Austrade Japan head Phil Ingram says a planned free trade agreement between the two US allies is set to further cement the relationship in the new century, with changes in Japanese society and economic restructuring set to yield further opportunities for Australian business.
While describing the commerce agreement as “a very important milestone in our engagement with Japan,” Mr Ingram said an FTA would be an important step forward.
“I think it’s really encouraging that Japan and Australia are in the middle of negotiations for a free trade agreement because I think that’s going to set the tone for the next 50 years,” he said.
“It’s not just in agriculture – obviously that’s where the barriers are the highest in Japan and we would be hoping to get some good gains there for Australian products – but I feel that in services related to the financial areas, to legal services, transport services, retailing and a whole range of other services, that we can also benefit from an FTA with Japan.”
The gains from such an FTA are expected to be huge for both countries. According to a joint government study, the gross domestic product of Australia and Japan could increase by up to A$39 billion and $29 billion respectively, in the first 20 years.
The head of the Japanese arm of the Australian government’s trade arm said it would also alert Australian businesses – typically more comfortable in the English-speaking markets of the United States, United Kingdom and New Zealand – to take another look at the East Asian powerhouse.
“I think it’s also going to be important for us by having a head-turning effect,” he said.
“The Japanese will wake up and say, ‘Gee, I didn’t know Australia can actually do and produce these other great and wonderful value-added products and services.’ So I think it will mean that Australian companies will get many more opportunities out of the Japanese market.”
Despite a decade-long slump in the 1990s dubbed the “lost decade,” Japan appears to have turned the corner in recent years with its longest period of economic growth since the end of the Second World War. Although China is rapidly catching up, Japan remains the world’s No. 2 economy with GDP of around A$6 trillion in 2005 and per capita GDP of A$46,900.
Led by the reformist Koizumi government, economic restructuring has opened up new opportunities, Mr Ingram said.
“The [Japanese] economy has restructured and gone through a series of changes in recent years that have made it more productive and more competitive, therefore creating a whole range of opportunities for Australian businesses,” he said.
He pointed to transport as one area where an Australian exporter had already seen results, with Tasmanian high-speed ferry producer Incat delivering its biggest boat ever to Japan in July this year.
Known as the “Natchan Rera,” the 112-metre vessel will take up to 800 passengers and around 200 cars and trucks between the main island of Honshu and the northern island of Hokkaido.
“This is a real breakthrough, and it’s only really occurred because the Japanese have changed their regulatory system, and enabled us now to export these fantastic vessels to Japan,” Mr Ingram said.
Demographic changes have also caught the attention of media and business in Japan. The world’s fastest-ageing country is seeing society transformed, with a falling birthrate and resistance to immigration leading to a forecast decline in the labour supply and population.
But it’s not all doom and gloom. With the retirement of the baby boomers – the richest retirees in history – a vast army of wealthy customers with time to spend their money has suddenly materialised.
“The Japanese proportion of elderly people over 65 who are also very healthy is the largest in the world,” Mr Ingram said.
“We think that that market has a lot of potential for Australia because we can offer them the sorts of lifestyle activities that are not so obviously available in Japan.”
He pointed to hobbies such as photography, bird-watching, and arts and crafts as some of the opportunities, while education providers could look to capitalise on retirees’ thirst for knowledge.
Japan’s ultra-low interest rates – the official cash rate of 0.5 per cent compares to Australia’s 6.5 per cent – have also sparked demand for alternative investments.
“These people have retired with large sums of money, with large payouts that they’re keenly looking to invest,” Mr Ingram said.
“So investment management, financial planning, and everything related to making sure that people are secure in their now very long elderly period are also opportunities.”
He said those seeking to target this market would need to consider the particular needs of the elderly.
People who are elderly are looking for more interesting and more specific products that meet their needs, such as healthcare, skincare and food products, he said.
“You’ve got to start thinking natural, you’ve got to start thinking small portions, you’ve got to start thinking simple and easy to understand,” he said.
“We see huge opportunities in that market, as a result of the demographic changes going on in Japan.”
