Australia New Zealand Asean FTA starts now.

04Jan10

Asean has implemented two FTAs in a matter of days . First with China and now with Australia and New Zealand .

The Australia and New Zealand Asean FTA will see a gradual phasing of import duties of a range of goods of each individual country over a span of 10 years. I understand the FTA covers other areas of trade and investments (subjects of which are too complicated for me to comment).

This would now present an opportunity for those who are doing re export of products. Prior to this, if Malaysia were to re export Australian goods into Indonesia the goods maybe taxed by Indonesia. Now it would not.

I would like to copy an extract of an article by Rowan Callick of The Australian on the Australian Asean FTA (copied from http://www.theaustralian.com.au/business/million-southeast-asians-open-for-a-free-market/story-e6frg8zx-1225815743745?from=public_rss ) .

“ AUSTRALIAN businesses will today start to benefit from the country’s biggest free trade agreement — with the 600 million people of Southeast Asia.

Australia already has FTAs with Singapore and Thailand. But the new deal links Australia and New Zealand with all 10 countries of the Association of South East Asian Nations.

In the past financial year, Australia’s trade with ASEAN totalled $83 billion, 15 per cent of the country’s total trade — almost the share claimed by China, Australia’s top trading partner.

The FTA takes effect in stages. By 2020, it will eliminate tariffs on 96 per cent of the goods exported to ASEAN countries.

Federal Trade Minister Simon Crean said yesterday the “major milestone” opened up opportunities for Australian businesses in one of the fastest-growing regions of the world.

Six of the 10 ASEAN countries are forecast to grow this year at more than double the average economic growth of industrialised countries.
Despite some phasing in of arrangements, the deal that came into effect on January 1 — with its first working day today — produces some immediate benefits for Australia, including:

l Elimination of the 10 per cent tariff on processed cheese exports to Malaysia, worth $9.6 million in 2008, and the 5 per cent tariff on fresh grape exports there, worth $7.2m.

l Elimination of the 3 per cent tariff on wheat exports to The Philippines, worth $22m, and the 5 per cent tariff on sheepmeat exports, worth $3m.

l Expansion from seven to 36 of the subject areas that Australian education institutions can deliver in Vietnam.

About 42 per cent of Australia’s 18,500 exporting companies trade with ASEAN.

But a high proportion of our trade with most of the ASEAN countries is covered so far by a few lines of the FTA.

Melbourne-based Will Studd, widely known as Australia’s “Mr Cheese”, is one businessman excited by the new prospects.

“We only do a tiny bit of exporting. It’s a real challenge. But this deal will certainly make it likely we will do more,” the Calendar Cheese Company owner said yesterday. “There are so many barriers to trade in cheese that anything that brings them down is a good thing.”
New markets tend to be opened for commodity dairy products first, he said — such as butter, milk powder and cheddar for processing. And price is king, so reducing the tariffs can make a huge difference. Then people tend to start developing a taste for more sophisticated dairy products, including cheeses.

He said Malaysia presented an obvious opportunity, as did Vietnam, which is already familiar with cheese products because of its French heritage.

Australian Chamber of Commerce and Industry chief executive Peter Anderson said the exciting aspect to the FTA were the opportunities for Australian businesses to tap into the regional supply chains.

Mr Anderson said that with the stalling of the World Trade Organisation’s Doha Round, the deal showed Australia was continuing to broaden its market access and relationships with key trading partners.

Cambodia, Laos and Thailand have yet to complete their ratification of Australia’s first multi-country FTA, but are expected to do so early this year.

Although the deal principally treats ASEAN as an entity, its market access arrangements differ between the 10 member countries, with varied commitments with the newer ASEAN members, Vietnam, Burma, Cambodia and Laos.”



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