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Japan and Australia agree trade deal

Japan and Australia have agreed a trade deal which will see them lower tariffs on imports of key products. Japan has agreed to lower duties on Australian beef and raise the duty-free quota on cheese - Australia's biggest dairy export to Japan. Australia will cut tariffs on Japanese electronics, cars and white goods.

The deal, agreed after seven years of negotiations, is expected to be finalised later this year when Japan's prime minister visits Australia. Australia's Prime Minister Tony Abbott, who is currently visiting Japan, called the pact a historic one. "This is the first time that Japan has negotiated a comprehensive economic partnership agreement or free trade agreement with a major economy, particularly a major economy with a strong agricultural sector," Mr Abbott said.

Broader deal

The pact between the two countries comes as officials are trying to push for an ambitious US-led 12-nation free trade plan, the Trans-Pacific Partnership (TPP). Negotiations between representatives of the various nations, which include Australia and Japan, hit a roadblock earlier this year.

Differences on the issues of tariffs on imported goods, particularly between the US and Japan, were among the issues that were unresolved. Agricultural tariffs have become a sticking point for Japan, which is keen to protect its rice, wheat, beef and pork producers from outside competition. Some analysts suggested that the Australian and Japan deal may help spur progress on the TPP talks.

Aurelia George Mulgan, a professor of Japanese politics at University of New South Wales said the bilateral deal means that "Australia gets preferential treatment over the US." She said that US would be under pressure to agree a deal that puts it "on a level playing field with Australia". "Japan knows that America wants it on board, because TPP without Japan is not much worth all that much. Japan is playing hardball," she added.

US President Barack Obama is scheduled to tour the region, including Japan, in the coming weeks and is expected to discuss the issue.