A further slowing in growth
From June 14 to June 25, I’ll be leading NAB’s 2018 Agribusiness Japan Tour. If your business involves cattle farming, sheep farming or horticulture and you’re interested in the connections, insight and strategies being used to succeed in Asian markets, I encourage you to join me.
There are so many reasons to visit Japan.
Australia has enjoyed a strong and stable trading relationship with the Land of the Rising Sun since the Australian-Japan Agreement on Commerce was signed in 1957. Japan is either the world’s third or fourth largest economy (depending on, respectively, whether the metric of nominal GDP or purchasing power parity is used). It is the world’s second-largest consumer market, as well as Australia’s second-largest trading partner and second-largest export market. Japan has a well-established middle class with a long history of purchasing premium, ‘clean and green’ Australian agricultural products.
The 2015 Japan-Australia Economic Partnership Agreement (JAEPA) looks set, in the words of the Department of Foreign Affairs and Trade (DFAT), to further deepen the economic relationship between “natural partners with highly complementary economies”.
Finally, for more than six decades, Japan has been a consistent buyer of Australia’s commodities. Successive Japanese and Australian governments have taken care to safeguard the economic relationship between the two countries, and to build a long and successful partnership.
Given the trade ties between Australia and Japan are so stable and long-standing, the temptation is to take them for granted. That kind of complacency is risky for several reasons.
First, the Japanese prefer to have face-to-face contact with those they are in business with. Contracts can be exchanged via email, but relationships still need to be established – then maintained – through business meetings and dinners.
Second, as with any market, there are emerging threats and opportunities that only become obvious when you are on the ground. While the Japanese prize tradition and stability, factors such as an ageing population, a less protected economy and stagnant wages are transforming the behaviour of Japanese consumers.
Third, the JAEPA is one of the most liberalising bilateral trade agreements Japan has ever signed. Between now and 2024, Australian agribusinesses will have increased access to what has long been a heavily protected market. Like their counterparts in the wine, dairy and seafood industries, beef producers will be able to take advantage of rapid tariff reductions. These reductions may give them the competitive advantage necessary to take market share from, for example, US competitors.
NAB’s annual agribusiness tours have the advantage of a narrow focus combined with deep access. They are designed with the needs of primary producers in mind, particularly those involved with beef cattle, sheep, wool and horticulture. The 2018 tour is structured around an in-depth exploration of the value chain of these commodities in Japan, with four industry visits – Beef, Wagyu, Tuna and Oats/Hay – a key part of the tour.
The whirlwind 11-day trip begins with a briefing from Austrade, DFAT and Meat and Livestock Australia at the Australian Embassy. The rest of the time will be spent visiting sites ranging from banks to cattle, potato and wheat farms, dairy product factories, green tea plantations, rice fields, sake breweries and seafood markets. The tour starts and ends in Tokyo but much of it will be spent in agricultural districts around Hokkaido, Osaka and Kyoto.
We’ve selected Japan as the destination for our 2018 tour because of the business opportunities on offer there for those entrepreneurial enough to seize them.
Our agribusiness tours have long helped provide the connections, insight and strategies Australian agribusinesses need to succeed in Asian markets. Those attending the 2018 tour will gain a deep understanding of how to do business in Japan. They may also benefit from business investments, commercial opportunities and supply agreements that arise from relationships forged on the tour.
Given the outcomes of past tours and the fantastic industry visits we have arranged, I’m confident the upcoming tour will be the most successful yet. I hope to see you on it.
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