Impact on New South Wales for trade in goods and services

Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA)

17 November 2010

1. Trade in goods

New South Wales exports to ASEAN (calendar year 2009): $3.4 billion. Principal exports:

  • Aluminium $637 million
  • Wheat 1 $314 million
  • Coal $197 million
  • Copper ores and concentrates $171 million
  • Medicaments (inc. veterinary) $159 million
  • Refined petroleum $158 million
  • Copper $119 million
  • Uncoated flat-rolled iron and steel $91 million
  • Cotton $88 million
  • Confidential items of trade $235 million

The following analysis summarises tariff outcomes under the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) for Indonesia, Malaysia, the Philippines and Vietnam for some of New South Wale' principal exports. These are the four largest AANZFTA markets with which Australia does not already have a bilateral free trade agreement (FTA).

The tariff outcomes in AANZFTA include (export figures are for New South Wales, calendar year 2009):

Aluminium

The outcomes on aluminium include:

  • The binding of 0% tariffs from entry-into-force on $131 million of exports of unwrought aluminium to Indonesia (7601) 2.
  • The immediate reduction of tariffs of 5%, 10% and 15% to 0%, 5% and 7% on entry-into-force with total elimination by 2015 on $22.3 million of exports of aluminium alloys, in rectangular plates, sheets or strip of a thickness exceeding 0.2mm to Indonesia (7606.12).
  • The binding of 0% tariffs from 1 January 2010 on $198.4 million of exports of unwrought aluminium to Malaysia (7601).
  • The reduction of a 30% tariff to 10% from 1 January 2010, phasing to 0% in 2013 on $12.9 million of exports of aluminium alloys, in rectangular plates, sheets or strip of a thickness exceeding 0.2mm to Malaysia (7606.12).
  • The elimination of 1% tariffs from 1 January 2010 on $5.2 million of exports of unwrought aluminium to the Philippines (7601).
  • The binding of 0% tariffs from 1 January 2010 on $32.3 million of exports of unwrought aluminium to Vietnam (7601).
  • The elimination of 3% tariffs in 2016 on $16.5 million of exports of aluminium alloys, in rectangular plates, sheets or strip of a thickness exceeding 0.2mm to Vietnam (7606.12).

Wheat and wheat flour

  • The binding of tariffs of 0% from entry-into-force on $100.4 million of exports of wheat to Indonesia (1001).
  • The binding of a 5% tariff from entry-into-force, its reduction to 4% in 2015 and elimination in 2020, on $18.7 million of exports of wheat flour to Indonesia (1101.00).
  • The binding of tariffs of 0% from 1 January 2010 on $48.3 million of exports of wheat to Malaysia (1001).
  • The elimination of 3% tariffs from 1 January 2010, and a 7% tariff from 1 January 2011, on $16.7 million of exports of wheat to the Philippines (1001).
  • The reduction from 1 January 2010 of a 7% tariff to 3%, and its elimination in 2011, on $8.8 million of exports of wheat flour to the Philippines (1101.00).
  • The elimination of 5% tariffs from 2016 on $100.5 million of exports of wheat to Vietnam (1001).

Coal

  • The binding of 0% tariffs from 1 January 2010 on $66.9 million of exports of coal to Malaysia (2701).
  • The binding of a 0% tariff, and the elimination of a 5% tariff from 2016, on $2.5 million of exports of bituminous coal to Vietnam (2701.12).

Copper and copper ores

  • The elimination of 5% tariffs from entry-into-force on $1.5 million of exports of copper tubes and pipes to Indonesia (7411).
  • The binding of 0% tariffs from 1 January 2010 on $4.5 million of exports of copper tubes and pipes to Malaysia (7411).
  • The elimination of a 3% tariff in 2015 on $171.3 million of exports of copper ores and concentrates to the Philippines (2603).
  • The elimination of 1% to 3% tariffs from 1 January 2010 on $42 million of exports of copper bars, rods, profiles to the Philippines (7407).
  • The elimination of 1% to 5% tariffs from 1 January 2010 on $17 million of exports of copper wire to the Philippines (7408).
  • The elimination in 2016 of 3% tariffs on $1.3 million on exports of copper tubes and pipes to Vietnam (7411).

Medicaments

  • The binding of a 0% tariff and the elimination of 5% tariffs on entry-into-force, and phase-down of 10% tariffs to 0% in 2011, on $7.8 million of exports of medicaments to Indonesia (3003-3004).
  • The binding of 0% tariffs from 1 January 2010 on $41.6 million of exports of medicaments to Malaysia (3003-3004).
  • The binding of a 0% tariff, and the elimination of 1%, 3% and 5% tariffs from 1 January 2010, on $30.9 million of exports of medicaments to the Philippines (3003-3004).

Refined petroleum

  • The binding of 0% tariffs and elimination of 5% tariffs from 1 January 2010 on $25.8 million of exports of refined petroleum to Malaysia (2710.11, 2710.19).

Iron and steel

  • The elimination of 5% tariffs on entry-into-force, and the phasing-down of a 12.5% tariff and its elimination in 2012, on $8.1 million of exports of certain bars and rods of iron or non-alloy steel to Indonesia (7215.90).
  • The reduction of a 15% tariff to 13% in 2013, 10% in 2014, 8% in 2015, and 5% in 2016, on $4.6 million of exports of cloth, grill, netting and fencing, of iron or steel wire to Indonesia (7314.39).
  • The elimination of a 5% tariff on entry-into-force on $63.9 million of exports of grinding balls and similar articles for mills of iron or steel to Indonesia (7326.11).
  • The reduction of 50% tariffs on some products to 10% on 1 January 2010, and their phasing down to 0% in 2013, and on other products to 40% in 2012 and further reductions to 10% in 2019, on $6.8 million of exports of products of iron or non-alloy steel, in coils, not further worked than hot-rolled, of a width of 600 mm or more, of a thickness of less than 3 mm to Malaysia (7208.39)
  • The reduction of a 15% tariff to 7% on 1 January 2010, to 5% in 2011, 3% in 2012 and elimination in 2013, on $11.6 million of exports of grinding balls and similar articles for mills of iron or steel to the Philippines (7326.11).
  • The binding of a 0% tariff from 1 January 2010 on $13.7 million of exports of products of iron or non-alloy steel, in coils, not further worked than hot-rolled, of a width of 600 mm or more, of a thickness of less than 3 mm to Vietnam (7208.39).

Cotton

  • The binding of a 0% tariff from entry-into-force on $42 million of exports of cotton, not carded or combed to Indonesia (5201).
  • The binding of a 0% tariff from 1 January 2010 on $2.7 million of exports of cotton, not carded or combed to Malaysia (5201).
  • The binding of a 0% tariff from 1 January 2010 on $2 million of exports of cotton, not carded or combed to Vietnam (5201).

Meat

  • The binding of 5% tariffs from entry-into-force with tariff elimination from 2020 on $21.4 million of exports of boneless beef meat cuts, fresh, chilled or frozen to Indonesia (0201.30, 0202.30).
  • The binding of 5% tariffs from entry-into-force with tariff elimination from 2020 on $1.2 million of exports of frozen edible offal of bovine animals (excluding tongue; on which the 5% tariff is eliminated on entry-into-force) to Indonesia (0206.22, 0206.29).
  • The binding of 0% tariffs from 1 January 2010 on $7.9 million of exports of fresh, chilled or frozen sheep meat to Malaysia (0204 except for 0204.50).
  • The reduction from 1 January 2010 of 10% tariffs to 5% with further reductions leading to tariff elimination by 2012 on $7 million of exports of fresh, chilled and frozen beef to the Philippines (0201, 0202).
  • The binding of 10% tariffs from 1 January 2010, with reductions to 7% in 2012, 5% in 2013 and tariff elimination in 2016, on $0.7 million of exports of fresh, chilled or frozen goat meat to Vietnam (0204.50).

Vegetables

  • The binding of a 5% tariff from entry-into-force, with a reduction to 4% in 2015, on $0.5 million of exports of cabbage lettuce (head lettuce), fresh or chilled to Indonesia (0705.11).
  • The binding of a 0% tariff and the elimination of a 5% tariff from entry-into-force on $0.4 million of exports of dried shelled peas (Pisum sativum) to Indonesia (0713.10).
  • The binding of a 0% tariff from 1 January 2010 on $0.3 million of exports of potatoes (excluding seed), fresh or chilled to Malaysia (0701.90).
  • The binding of 0% tariffs from 1 January 2010 on $0.6 million of exports of vegetables, not elsewhere specified, fresh or chilled to Malaysia (0709.90).

Fruit and nuts

  • The elimination from entry-into-force of 5% tariffs on $1 million of exports of fresh or dried oranges to Indonesia (0805.10).
  • The elimination from entry-into-force of a 5% tariff on $0.8 million of exports of fresh grapes to Indonesia (0806.10).
  • The binding of a 0% tariff and the elimination of a 5% tariff on 1 January 2010 on $2.5 million of exports of fresh or dried oranges to Malaysia (0805.10).
  • The elimination from 1 January 2010 of a 5% tariff on $0.6 million of exports of fresh grapes to Malaysia (0806.10).
  • The reduction from 1 January 2010 of a 15% tariff to 7%,with further reductions leading to tariff elimination by 2013, on $0.5 million of exports of frozen strawberries, uncooked or cooked by steaming or boiling in water to the Philippines (0811.10).
  • The reduction from 1 January 2010 of 40% tariffs to 35%, with further reductions leading to tariff elimination in 2016 or 2020, on $0.6 million of exports of fresh or dried nuts, not elsewhere specified to Vietnam (0802.90).
  • The reduction from 1 January 2010 of a 25% tariff to 20%, with further reductions leading to tariff elimination in 2018, on $0.5 million of exports of fresh grapes to Vietnam (0806.10).

Processed agricultural products

  • The binding of 0% tariffs on entry-into-force on $3.1 million of exports of dog and cat food, put up for retail sale, to Indonesia (2309.10).
  • The elimination of a 10% tariff on 1 January 2010 on $5.8 million of exports of processed cheese not grated or powdered to Malaysia (0406.30).
  • The binding of a 0% tariff on 1 January 2010 on $6.3 million of exports of dog and cat food, put up for retail sale to Malaysia (2309.10).
  • The elimination of 5% tariffs on 1 January 2010 on $1.8 million of exports of dog and cat food, put up for retail sale, to the Philippines (2309.10).
  • The binding of a 3% tariff on 1 January 2010 with tariff elimination in 2016 on $3.7 million of exports of tanned or crust hides and skins of bovine (including buffalo) or equine animals, without hair on, in the wet state, full grains un-split or grain split to Vietnam ( 4104.11).

Other manufactured goods

  • The reduction of a 10% tariff to 5% on entry-into-force, and elimination in 2012, on $4.8 million of exports of personal deodorants and antiperspirants to Indonesia (3307.20).
  • The elimination from entry-into-force of 5% tariffs on $2.7 million of exports of centrifugal pumps for liquids, not elsewhere specified to Indonesia (8413.70).
  • The binding of 0% tariffs from entry-into-force on $7.2 million of exports of parts of the machinery of 8474 (machinery for sorting, screening, separating etc earth, stone, ore and other material substances, and some other machinery) to Indonesia (8474.90).
  • The elimination from 1 January 2010 of 5% tariffs on $3.8 million of exports of pulley tackle and hoists other than hoist slips, winches capstans, and jacks to Malaysia (8425.39, 8425.49).
  • The elimination from 1 January 2010 of a 5% tariff on $5.9 million of exports of tower cranes to Malaysia (8426.20).
  • The elimination of 5% tariffs from 1 January 2010, and the reduction of a 10% tariff to 5% with elimination in 2011, on $9.4 million of exports of other parts for cranes, mobile lifting frames, bulldozers and other moving, grading and excavating machinery for earth, minerals or ores to Malaysia (8431.49).
  • The elimination of a 5% tariff on 1 January 2010, and the reduction of 25% and 30% tariffs to 10% on the same day, followed by further reductions leading to elimination in 2013, on $1.1 million of exports of other games, operated by coins, banknotes, bank cards, tokens or by other means of payment, other than bowling alley equipment to Malaysia (9504.30).
  • The elimination of a 1% tariff in 2010, and a 7% tariff in 2011, on $6.9 million of exports of unbleached other kraft paper and paperboard weighing more than 150 g/m2 but less than 225 g/m2 to the Philippines (4804.41).
  • The elimination of 1% tariffs, and the reduction of 7% tariffs to 3% from 1 January 2010 with elimination in 2011, for $3 million of exports of parts for pumps of liquids to the Philippines (8413.91).
  • The elimination of tariffs of 1% and 5% from 1 January 2010 on $3 million of exports of parts suitable for use solely or principally with the machinery of headings 84.25 to 84.30 (machinery including winches, cranes, lifting and unloading machinery, bulldozers and other earth moving machinery) to the Philippines (8431).
  • The reduction of a 7% tariff to 3% on 1 January 2010 and elimination in 2011 on $15.6 million of exports of other games, operated by coins, banknotes, bank cards, tokens or by other means of payment, other than bowling alley equipment to the Philippines (9504.30).
  • The binding of 10% tariffs from 1 January 2010 reducing to 7% in 2012, with further reductions leading to elimination in 2020, on $1.5 million of exports of compressors of a kind used in refrigerating equipment to Vietnam (8414.30).

2. Trade in services opportunities for New South Wales

Services exporters in New South Wales are in a strong position to access the growing services markets in ASEAN. Exports of services to the world, which were worth $21.2 billion in 2009, account for 39 per cent of the State' total exports.

  • The largest sector is education-related travel, valued at $6.8 billion, which accounts for 32% of services exports. Business and other professional services were valued at $4.1 billion, accounting for 19 per cent of services exports.
  • Statistics are not available on the percentage of NSW' services exports that go to ASEAN. However, ASEAN accounts for 15% of Australia' services exports.

Under AANZFTA, ASEAN countries have made substantial, commercially meaningful improvements on existing WTO commitments in a range of services sectors – including banking, insurance, construction, mining and energy-related services, telecommunications, education and professional services – where NSW providers have strong capabilities. For example:

  • In banking services, the Philippines and Indonesia have committed to foreign equity of 55 and 51 per cent respectively for acquisition of an existing domestic bank.
  • In insurance services, Indonesia has committed to allowing foreign equity participation of 80 per cent for Australian service suppliers.
  • In construction services, Indonesia and Malaysia have committed to allowing joint ventures with aggregate foreign equity of 55 and 49 per cent respectively. Brunei Darussalam has committed to allow foreign equity in construction firms of 50 per cent.
  • In mining and energy related services, the Philippines has made commitments that allow up to 100 per cent foreign equity for construction of large scale mining development projects covered by a financial and technical assistance agreement under the Philippine Mining Act.
  • The Philippines also made commitments that allow up to 100 per cent foreign equity, subject to the President' approval, for oil and gas exploration and development and 40 per cent foreign equity for geothermal exploration and development; coal exploration and development; pipeline transport; and services related to energy distribution or power generation (up to 100 per cent foreign equity is allowed for construction of power plants under the andldquo;build-operate-transferandrdquo; scheme).
  • Vietnam has committed to reduce the experience requirement for Australian teachers in higher, secondary and other education services (including foreign language training) from five to three years and to expand from 5 to 36 the (WTO-committed) fields of study that can be delivered by foreign providers.
  • Malaysia has committed to allow joint ventures in higher education with foreign equity up to 51 per cent, subject to relevance of courses to Malaysia' education objectives. It has also committed to allow temporary entry and stay of lecturers and experts and professionals (subject to numerical caps) and contractual service suppliers in the education sector for periods of stay of up to 10 years.
  • Australian telecommunications providers will benefit from disciplines that aim to ensure a level playing field with major domestic suppliers in ASEAN countries, which may own or control essential network facilities. For example, Parties will be required to prevent anti-competitive conduct and ensure that major suppliers provide interconnection, leased circuit services and co-location of equipment on reasonable, non-discriminatory terms and conditions.
  • The Philippines has bound arrangements under which Australian accountants, landscape architects and civil, mechanical metallurgical and sanitary engineers can practice under temporary permits from its Professional Regulation Commission.
  • Indonesia has committed to permit foreign lawyers to work or take part in Indonesian law firms (up to 5 foreign lawyers per firm with an upper limit of 20 per cent) as employees or experts in international law.
  • Vietnam has bound arrangements under which foreign law firms can employ Vietnamese lawyers and foreign lawyers can practice in Vietnamese law firms to advise on foreign/international law.

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

  • 1 Until April 2009 the value of bulk wheat exports by destination country was confidential in Australian Bureau of Statistics merchandise trade statistics. Therefore, the figures in this paper for wheat exports generally under-report actual trade in 2009.
  • 2 This is the four digit heading or the six digit sub-heading of the tariff system that corresponds to the export figure given.
Last Updated: 10 December 2010