Trade deal to build on long history of Japanese investment


ABC Premium News (Australia)

The ceremonial signing of a Free Trade Agreement (FTA) between Australia and Japan today follows more than half a century of Japanese investment in Australia's mining industry.

Professor Chris Pokarier, a governance specialist at the Wasede University in Tokyo, says the first Australian resources boom and rapid development in the 1960s wouldn't have happened without Japanese companies injecting capital, and then buying the resources.

Professor Pokarier says companies like Mitsui, Mitsubishi and Sumitomo helped shape Australia's economic development.

"The most significant investments were historically in coal, mostly in Queensland but also in New South Wales," Prof Pokarier said.

"The two biggest earners from the resources sector for Australia for decades just simply wouldn't have developed without both Japanese customers and Japanese investment."

Mitsui, Mitsubishi and Sumitomo have all recently moved into investing in Australian agribusinesses.

"Some of these companies had a stake in Australia even before the Second World War interestingly.

"And what's really interesting about these firms is that they're simultaneously trading companies, but in a significant sense they're patient, proactive, portfolio investors as well.

"They've made significant returns in long-term trading in resources in Australia and they have continuing confidence in the prospects of the Australian economy, so they're looking to put some of those returns back into potential growth sectors such as agriculture."

Sumitomo has purchased grain handler Emerald, Mitsui has purchased West Australiangraintrader Plum Grove and Mitsubishi Corporation has purchased Olam GrainAustralia'sgrainhandling infrastructure.

Prof Chris Pokarier believes it's unfortunate that the lengthy relationship between Australia and Japan has been somewhat overshadowed by our newly minted relationship with China.

"Japan itself did go quiet, it's had not just one but two 'lost decades' in projecting it's influence, it's presence, internationally; whether diplomatically or economically," he said

"So we somewhat succumbed to the mistaken perception that Japan was no longer relevant to Australia either economically or in a security, or political or a cultural sense, relative to a rising China.

"But if we step back and more rational heads prevail, we can see that obviously Japan is still one of our strongest partners, and in many respects is going to be more important than China in certain sectors, like LNG, in the next few years."

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