ASEAN free trade agreement to boost food exports
Federal Minister for Trade, Simon Crean, has joined Trade Ministers from the 10 members of the Association of South East Asian Nations (ASEAN) and New Zealand in signing the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA).This represents the largest FTA Australia has ever signed and will reduce or eliminate tariffs across a region that is home to 600 million people and has an annual GDP of A$3.2 trillion.
Australia’s two-way trade with the ASEAN region is worth $80 billion a year and Mr Crean believes the agreement will deliver new opportunities across the board for Australian exporters. “With this level of trade, which is bigger than our trade with Japan or China or the United States, this agreement with ASEAN has great potential to increase job opportunities for Australian workers,” he said. “I have asked Austrade to roll out a commercial strategy to take advantage of the market openings created by AANZFTA.”
According to Austrade, there are around 18,500 Australian exporters doing business in ASEAN countries.
“Trade barriers are coming down in the region. Our challenge to Australian business and exporters is to look to South East Asia to take advantage of the new opportunities,” Mr Crean added.
AANZFTA will bind current low tariffs and over time eliminate tariffs on between 90 and 100 per cent of tariff lines, covering 96 per cent of current Australian exports to the region.
These tariff reductions will put in place a guarantee against sudden tariff surges and are an effective barrier against protectionist moves in the midst of the present economic crisis.
“This is the first free trade agreement Australia has signed since the onset of the global financial crisis,” Mr Crean advised. “It powerfully demonstrates Australia’s – and the region’s – strong commitment to opening up markets in the face of this crisis. This will keep trade flows open in the region, increase growth, and give a much-needed boost to confidence.”
The FTA includes an economic cooperation component to provide technical assistance and capacity building to developing ASEAN countries to assist in implementation of the FTA.
“Australia regards this cooperation as an integral part of the FTA and I am pleased to announce that Australia will provide up to $20 million in funding for worthwhile capacity-building projects over a five year period,” Mr Crean said. “Australia stands to gain from this agreement across many sectors, including exports of agricultural products, industrial goods and services.”
“Australian primary producers are now being guaranteed greater access to developing South East Asian markets, many of which have a growing appetite for high quality Australian produce.”