Apparently, the pending death of Australia’s car manufacturing industry after the announcements from GM’s Holden division (schedule to stop in 2017), Ford (in 2016) and Toyota (in 2017), offered the local government an added incentive to complete a historic trade deal with Japan, the first of its kind between the two countries.
Under the free trade agreement, expected to be ratified in July when Japanese Prime Minister Shinzo Abe visits Australia, Japan will phase out its nearly 40 percent tariffs on Australian beef beer, lamb, wool and cotton, while Australia will end duties on Japanese-made cars, household appliances and electronics.
Australian Automobile Association chief executive Andrew McKellar told reporters that approximately one-third of the cars sold in the country come from Japan and that the agreement will see 75 percent of existing Japanese imports freed from a five percent tariff, with the remaining vehicles to be duty-free after three years. Australian authorities estimate price drops of up to $2,000 per car.
“This is effectively a tax cut for motorists and should result in savings of between one and two thousand dollars,” said McKellar. “This agreement will make the entire new car market more competitive and that’s good for all consumers.”
On the other hand, Australia’s car parts manufacturing industry will also lose the protection it enjoys, as their Japanese counterparts will be exempt from tariffs, though, this rule won’t be implemented for another five years.
By John Halas
Story References: SMH & SkyNews
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