Prime Minister Tony Abbott dined with Japanese Prime Minister Shinzo Abe on Sunday night in an effort to secure a Free Trade Agreement between the two countries.
As The Australian Financial Review reports, the two leaders met in Tokyo. It is thought that an announcement on a bilateral agreement could be made this afternoon when they meet again officially.
The major sticking points are the level of tariffs on Australian beef and the time it will take to phase in reductions in these tariffs.
At present, Japan has a 38.5 per cent import tariff on Australian beef. Australia wants this to be cut to about 19 per cent, while the Japanese want it to be reduced to about 25 per cent over a 15 year period.
Australia also wants a cut of around 8 per cent in the first two years, followed by further reductions to the level of around 19 percent.
As part of the deal, Australia would also cut the current 5 per cent tariff on Japanese automobiles over three years. This would cut the price of cars for Australian consumers but also cost the budget $400 million a year.
As the ABC points out, if the free trade deal is completed it could increase Australia’s GDP by $40 billion over the next 20 years.
According to notes referred to by the SMH, in a speech to be delivered to Japan's Chamber of Commerce and Industry on Monday, Mr Abbott will explain that the agreement, “...will allow both of us to develop further the industries that are our nations' strengths.”
"More affordable Japanese consumer products will be good for Australian families, more affordable Australian food will be good for Japanese families – more trade will make both countries richer and our relationship stronger."