Australian exporters of beef and dairy products have welcomed proposals for a free-trade agreement with Japan.

Japanese Prime Minister Junichiro Koizumi and his Australian counterpart John Howard announced that officials would begin negotiating an agreement in the coming months.

Australian beef exports to Japan are currently subject to high tariffs, and both beef and dairy farmers would benefit from improved access to the profitable Japanese market.

Phillip Goode from the Australian Dairy Corporation said: “Japan is already our most valuable market with exports at the moment worth well over A$300m (US$161m) a year, and we only have access to a very small part of that market. Basically we can sell cheese in Japan and we can sell a little bit of other dairy products, but it is very difficult.

“So there’s huge potential if we had access to that market for things like skim milk powder, whole milk powder, butter, yoghurt, liquid milk – all sorts of things that we just don’t sell very much of into that market at the moment.”