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Japan is the third largest economy in the world, with a nominal GDP of US$5.98 trillion in 2012 and a population of 127.9 million in 2011.
After a contraction in GDP of 0.7% in 2011, the Japanese economy is expected to return to a modest growth trajectory in 2012 and 2013.
Since the March 2011 Japanese earthquake and tsunami, industrial production and trade have recovered quickly and Japan's economy has returned to positive growth in 2012 as supply chains were restored and output increased.
Japan is Australia’s second biggest trading partner and will remain so for the foreseeable future. Japan was Australia's second-largest trading partner in 2011-12. It is Australia’s third largest source of foreign investment.
In 2012, Australian goods exports to Japan were $51.1 billion and service exports were worth $2 billion. Australia’s major goods exports to Japan in 2012 included coal ($14.9 billion), iron ore ($9 billion), copper ores and concentrates ($1.55 billion) and beef ($1.51 billion). Japan was Australia's largest export market for beef, fish, fruit juice, animal feed, copper ores and concentrates, coal, liquefied propane and butane, aluminium, transmission shafts, dairy products and natural gas. The major services export was tourism.
In 2012, Victoria exported $1.7 billion worth of goods to Japan with major commodities exported including cheese and curd, aluminium, wood chips, beef and scientific and medical equipment. Japan is Victoria's most valuable single market for food and beverage exports, valued at $801 million in 201-12. Meat and dairy products made up 64 per cent of this total.
Japan is also a significant market for Victoria’s tourism and international education sectors.
Current and emerging opportunities
Higher value-added and knowledge intensive sectors such as the life sciences, information technology, nanotechnology, aerospace and environmental technologies offer the most promising prospects for exports growth to Japan.
There are significant opportunities for Victorian companies providing services in areas such as government services, legal and accounting services, medical and aged-care services, real-estate and property services, vocational training, recreational, music and performing arts, and hospitality services.
Business etiquette and practices are important in Japan. The Japanese are extremely polite and place importance on respect and social rank. You will be showered with elaborate compliments while your host remains humble and plays down their achievements. Australians who show modesty will be well regarded by Japanese people.
Tariffs and taxes
Japan has low or zero tariffs on most industrial products. However, Japan maintains tariffs and restrictions on some agricultural items, which are relevant to some Australian exporters.Australian products are entered at the lowest rate notified (preferential rates excepted) with a ‘self assessment’ system designed to expedite customs clearance allowing prior calculation of duty by importers.
The Australian and Japanese governments are currently negotiating a free trade agreement, which will further enhance access for Victorian exporters.
Victorian Government support
The Victorian Government Business Office (VGBO) in Tokyo provides in-market intelligence and support to Victorian companies.