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Non-compliance with the Australian Government’s best practice regulation requirements – Japan-Australia Economic Partnership Agreement (JAEPA) – Department of Foreign Affairs and Trade

On 7 April 2014 Prime Minister Tony Abbott and Prime Minister Shinzo Abe announced the conclusion of negotiations on the Japan-Australia Economic Partnership Agreement (JAEPA). Prime Minister Abbott and Prime Minister Abe signed the agreement on 8 July 2014 in Canberra. Japan is Australia’s second-largest trading partner, with two-way trade in goods and services reaching nearly $70 billion in 2012-13. Australia and Japan also have significant direct investment relationships. However, there exist a number of tariffs and other barriers which constrain the ability of Australian producers and exporters to build trade, and which limit profitability and expansion opportunities for these businesses. These barriers are particularly significant for Australia’s agriculture sector. The implementation of the JAEPA will reduce tariffs on a number of Australian exports, with over 97 per cent of Australian trade entering duty free or with preferential access on full implementation, and improve access in some professional services markets. It will also see tariff reductions on a range of Japanese product lines imported into Australia, notably consumer electronics, white goods and motor vehicles. A Regulation Impact Statement (RIS) was prepared and certified by the Department of Foreign Affairs and Trade to support the decision to endorse the signing of the JAEPA. The Office of Best Practice Regulation’s (OBPR) final assessment was that the Department of Foreign Affairs and Trade (DFAT) is compliant with the Australian Government’s requirements at the final decision point. However, the OBPR did not consider that the RIS represents best practice, having regard to the significance and widespread nature of the likely impacts of the proposal on the Australian economy. In addition, as a RIS was not prepared for the decision in 2006-07 to enter into negotiations on the Australia-Japan Economic Partnership Agreement, DFAT is non-compliant with the RIS requirements for that stage of the process. As this regulatory change has been assessed as being highly significant, the Government requires a Post-implementation Review to be completed within five years of the agreement being implemented.