13 Nov 2011

Fonterra welcomes Japan joining trade talks

5:38 am on 13 November 2011

Fonterra has welcomed Japan's intention to join a Pacific Rim trade pact including New Zealand.

But the company says the world's third biggest economy needs to show it is serious about scrapping tariffs on imports before it can join talks.

Radio New Zealand's economics correspondent reports that Japan says it wants to join the nine-country Trans Pacific Partnership, despite strong resistance to the idea from its farmers.

They fear that the scrapping tariffs on imported food, including from New Zealand, will drive them out of business.

The Japanese prime minister has vowed to protect industries where needed.

But a Fonterra director, Malcolm Bailey, says that can't include keeping its very high tariffs on food imports.

Trade Minister Tim Groser spoke to his Japanese counterpart at the APEC summit in Honolulu on Saturday and says he told him that subsidies to help its farmers adjust to life without tariffs will be allowed in the TPP.

Japan hopes to become the 10th country to join the TPP talks, seen as the forerunner to a a trade pact including all 21 APEC economies and encompassing the entire Asia-Pacific region.

Mr Groser says it would be of immense significance if Japan were to join.