Tokyo received its first decent snowfall for the winter as 80 or so expat Australians and local Japanese executives gathered at the venerable Imperial Hotel near Ginza for a breakfast with new Australian Trade Minister Simon Crean. The event was being hosted by the Australia New Zealand Chamber of Commerce in Japan.

            After a quick meal, Mr. Crean took to the podium with three messages for his audience: the Rudd Government’s commitment to developing the “enduring relationship” between Australia and Japan, its commitment to achieving a comprehensive trade and economic package, and its interest in forging stronger relationships at the bilateral, multilateral and regional level.

              A significant part of his talk focused on the second message, which referred of course to the ongoing free trade agreement (FTA) negotiations between Australia and Japan. And it was here that Mr. Crean delivered two messages that were the most important to come out of the morning. First, the Rudd Government puts top priority on a successful outcome to the Doha Round of WTO trade negotiations. Second, if Japan wants access to markets for goods and services, it will need to open up its sensitive agriculture sector.

            The Doha commitment is not surprising; it was signaled in Kevin Rudd’s pre-election foreign policy manifesto (printed in the February 2007 issue of The Diplomat), which called for a return to multilateral engagement after years of focusing on bilateral (read: U.S.) relations. As Mr. Crean pointed out, there is an opportunity to make progress on Doha over the next couple of months, but with growing protectionist sentiment in the United States in this presidential election year, there is also ample scope for pessimism.

            The comment on the agriculture sector suggests that the Labour government is going to take a harder line on this issue than its predecessor. Although elements of the Japanese government do want to see this sector open up, a wobbly Liberal Democratic Party is unlikely to risk offending its core rural constituencies, which remain staunchly opposed to the FTA. We have previously argued in favor of phased tariff reductions and deferred negotiations, pointing out that with Japanese farmers rapidly ageing Tokyo is going to have to look to imports in due course. Following last year’s Upper House election defeat, the Japanese government is even less likely now to bow to any insistence that Japan make immediate and substantial concessions on farm trade.

            Mr. Crean went on to call for the “revitalization” of APEC, pointing out that while his government recognized the ASEAN Plus Six grouping, APEC was broadly representative of the region and offered high-level meetings every year. He said he was in favor of bringing India into APEC. Japan has consistently supported Australian inclusion in any regional grouping, and this has been a key benefit of good relations with Tokyo.

            The hot topic of whaling was not mentioned during the talk or the subsequent Q&A, but it did come up in a doorstop Mr. Crean subsequently held for the assembled media. And so the Sydney Morning Herald filed its report on the event under its special whaling section.

            We’ll look at whaling in a subsequent entry. The important message for Australian business from yesterday’s event is probably this: don’t hold your breath waiting for an Australia-Japan FTA agreement.