AANZFTA: Creating business opportunities

Australian Government Department of Foreign Affairs and Trade

November 2010

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AANZFTA: Creating business opportunities [PDF 1.92 MB]

Summary

The ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) is creating new business opportunities in our region.

Ninety-six per cent of Australia’s current goods exports will be tariff-free by 2020. This contrasts with 67 per cent tariff-free treatment prior to AANZFTA’s entry into force on 1 January 2010. New export opportunities should also be created through significant tariff liberalisation.

The Agreement’s regional rules of origin will provide new opportunities for Australian exporters to tap into global supply chains.

The AANZFTA promotes greater certainty for Australian service suppliers and investors, including through certain legal protections for investment in ASEAN territories.

The AANZFTA provides a platform for ongoing economic engagement with ASEAN through a range of built-in agendas, economic cooperation projects and business outreach activities.

About the ASEAN-Australia-New Zealand FTA

AANZFTA is now in force in Australia, Brunei, Burma (Myanmar), Malaysia, New Zealand, Philippines, Singapore, Thailand and Vietnam. The Agreement will enter into force for Laos and Cambodia in January 2011. Indonesia is working to complete its internal requirements at the earliest opportunity.

The Agreement covers an area with a combined population of over 600 million, with an estimated GDP of $3.3 trillion.

Australia’s total two-way trade with ASEAN and New Zealand was valued at $97 billion in 2009, accounting for almost 20 per cent of Australia’s total trade with the world. AANZFTA paves the way for even greater trade and investment flows.

There is scope to expand the investment relationship between Australia and ASEAN. For example, ASEAN is just as big for Australia’s trade as our trade with the European Union. However, the European Union accounted for 31 per cent of our total foreign investment abroad in 2009, whilst ASEAN accounted for only three per cent. Similarly, the EU accounted for 35 per cent of the total stock of foreign investment in Australia in 2009 compared with three per cent in the case of ASEAN.

Key market access gains for goods

AANZFTA binds current low tariffs, and will see progressive tariff cuts on goods traded between the 12 Parties to the Agreement.

Tariffs will be eliminated on between 90 and 100 per cent of tariff lines from the more developed ASEAN member countries and Vietnam. This covers 96 per cent of current Australian exports to the region.

Examples of significant achievements:

Using AANZFTA to export or import goods

The key points to follow when using AANZFTA to export or import goods are set out below.

Full details of AANZFTA’s requirements are set out in the Agreement and its Annexes.

1. Check whether the Agreement has entered into force for each of the 12 signatories.

This information is available on the DFAT website

The provisions of the Agreement, including the tariff commitments and the rules of origin provisions, only apply to those countries for which AANZFTA has entered into force.

2. Check the tariff commitments applying to products of interest to you, and in countries of interest, in the AANZFTA tariff schedules in their HS 2007 format (for Indonesia this will occur before AANZFTA enters into force for it).

3. Check the rule of origin applying to your product.

4. If you are exporting a good to an AANZFTA Party:

5. If you are importing a good from an AANZFTA Party:

Services

AANZFTA binds existing levels of market openness in various service sectors.

A built-in review provision ensures that further improvements can be negotiated over time as ASEAN countries progressively liberalise their services sectors.

ASEAN countries have made commercially meaningful improvements on existing WTO commitments in a range of sectors, for example:

Investment

AANZFTA provides more transparency and certainty for Australian investors in ASEAN countries. Investment protections require Parties to:

Movement of Natural Persons

A key sign of deeper economic integration is the ability of investors, service providers or salespeople from one country to enter and stay temporarily in another country, to explore business opportunities, negotiate and enter into contracts.

AANZFTA provides a framework for countries to make commitments on temporary business entry, covering all sectors of the economy.

AANZFTA also contains regulatory disciplines which will help to facilitate freer and more efficient movement of Australians who want to travel to ASEAN countries for temporary business purposes.

More information about AANZFTA