REUTERS - Japan is set to agree to reduce import tariffs on Australian frozen beef from 38.5 per cent to around 30 per cent as part of a bilateral economic partnership agreement, the Nikkei said.

Tariffs on chilled, grass-fed beef from Australia will also likely be brought down from 38.5 per cent to roughly 30 per cent.

But those on chilled, grain-fed beef will remain unchanged, as this type of Aussie beef competes against some Japanese offerings, the paper said.

Frozen Australian beef is usually used by restaurants for such dishes as hamburgers and is not expected to directly compete with domestic beef, according to the business daily.

"We have managed to hold the potential impact on the domestic beef industry to a minimum," the Nikkei quoted an unnamed Japanese government official as saying.

The Japanese government, which last cut its beef import duties in fiscal 2000, shrugged off Australian requests for the removal of tariffs for other products like wheat, dairy and sugar, the Nikkei said.

Australia is expected to maintain its 5 per cent import tariffs on Japanese cars for the time being, but agree to lower the rate in steps over an extended period, the Japanese business daily added.

The agreement with Australia is likely to have an impact on the negotiations on import levies on US beef in the Trans-Pacific Partnership free-trade talks, which Japan will join in July, the Nikkei said.