Permalink : http://hdl.handle.net/2115/63669

In recent times there has been a trend amongst the international community for negotiating and concluding Free Trade Agreements which allow signatories to satisfy their mutual interests while offering a high degree of freedom. Following this trend, formal consultations for the conclusion of a Japan-Australian FTA were begun in December 2006, and its ongoing formulation is an important national political issue. The resulting impacts of the Japan-Australian FTA on Hokkaido's agriculture and economy were calculated in this report using our self-developed Hokkaido macro-econometric model. Based on these analytical results, the prospects for the future development of Hokkaido agriculture were weighed. The results of our study revealed that agricultural and dairy imports from Australia would increase, inflicting great losses on Hokkaido's agricultural production, if the duty on the four major items wheat, sugar beets, beef and dairy products were dropped. This would spur depopulation in primary industry-based rural agriculture and fishery areas. It was also deduced that these losses would affect Hokkaido's entire economy, which is significantly based on the food manufacturing industry. Thus, great care must be exercised in lowering the duty on major agricultural products since Japan is already a major food importer with an extremely low food self-sufficiency rate of just 40% resulting from previous market-opening policies. As FTAs negotiated among other countries include many exceptions, sensitivity for particular products which are produced taking advantage of each nation's particular climatic and geographical characteristics or which have major local socio-economic importance should be respected. With consideration for such sensitivity, it seems recommendable that a fair and impartial framework be established that benefits both countries and allows for the sustainability and co-existence of each country's agriculture industries.