Impact on Queensland for trade in goods and services

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

17 November 2010

1. Trade in goods

Queensland merchandise exports to ASEAN (calendar year 2009): $2.7 billion

Principal exports:

  • Raw cane sugar 1 $302 million
  • Coal $215 million
  • Wheat 2 $211 million
  • Cotton $171 million
  • Refined petroleum $146 million
  • Aluminium $144 million
  • Beef, fresh chilled or frozen (f.c.f.) $129 million
  • Copper $124 million
  • Live animals (excluding seafood) $123 million
  • Ferrous waste and scrap $83 million
  • Animal feed $61 million
  • Confidential items of trade 3 $663 million

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

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

Sugar

  • The binding of 0% tariffs from 2010 on $146.3 million of exports of raw cane sugar to Malaysia (1701.11).

Coal

  • The binding of 0% tariffs from 1 January 2010 on $74.5 million of exports of bituminous coal to Malaysia (2701.12).
  • On $16.2 million of exports of bituminous coal to Vietnam (2701.12):
    • The binding of 0% tariffs from 1 January 2010 on bituminous coking coal.
    • The elimination of a 5% tariff on other bituminous coal from 2016.

Cereals

The outcomes on wheat include:

  • The binding of 0% tariffs from entry-into-force, on $97.5 million of exports of wheat to Indonesia (1001).
  • The binding of 0% tariffs from 1 January 2010 on $14.8 million of exports of wheat to Malaysia (1001).
  • On exports of $8.4 million of wheat to the Philippines:
    • The elimination from 1 January 2010 of a 3% tariff on wheat fit for human consumption.
    • The reduction of a 7% tariff to 3% from 1 January 2010 and its elimination in 2011, on exports of wheat not fit for human consumption (1001).
  • The elimination of 5% tariffs in 2016 on $48.2 million of exports of wheat to Vietnam (1001).

The outcomes on grain sorghum include:

  • The reduction of a 7% tariff to 3% from 1 January 2010 and its elimination in 2011, on $1.7 million of exports of grain sorghum to the Philippines (1007).

Cotton

  • The binding of 0% tariffs from entry-into-force on $104.0 million of exports of cotton, not carded or combed to Indonesia (5201).
  • The binding of 0% tariffs from 1 January 2010 on $3.2 million of exports of cotton, not carded or combed to Malaysia (5201).
  • The binding of 0% tariffs from 1 January 2010 on $2.1 million of exports of cotton, not carded or combed to Vietnam (5201).

Refined petroleum

  • On exports of $10.1 million of light oils and preparations to Malaysia (2710.11):
    • The elimination of 5% tariffs from 1 January 2010 on petroleum oils, partly refined (including topped crudes).
    • The binding of 0% tariffs from 1 January 2010 on all other light oils and preparations.
  • On exports of $61.6 million of light oils and preparations to the Philippines (2710.11):
    • The elimination of 1% and 3% tariffs from 1 January 2010 on most light oils and preparations.
    • The binding of a 3% tariff from 1 January 2010 on other solvent spirits and its elimination in 2015.
    • The reduction of 3% tariffs from 2015 to 2% on unleaded fuels, naphtha, other products with elimination in 2018.

Aluminium

  • The binding of 0% tariffs from entry-into-force on $37.9 million of exports of unwrought aluminium to Indonesia. (7601).
  • The binding of 0% tariffs from 1 January 2010 on $14.8 million of exports of unwrought aluminium, unalloyed to Malaysia. (7601).
  • The binding of 0% tariffs from 1 January 2010 on $2.3 million of exports of aluminium waste and scrap to Malaysia. (7602).
  • The elimination of 1% tariffs from 1 January 2010 on $1.9 million of exports of unwrought aluminium to the Philippines (7601.10, 7601.20).
  • The binding of 0% tariffs from 1 January 2010 on $6.6 million of exports of unwrought aluminium to Vietnam (7601.10, 7601.20).

Beef and beef products

  • The elimination of a 5% tariff in 2020 on $48.5 million of exports of boneless beef cuts to Indonesia (0201.30 + 0202.30).
  • The binding of 0% tariffs from 1 January 2010 on $16.7 million of exports of fresh, chilled or frozen beef to Malaysia (0201 - 0202).
  • The reduction of 10% tariffs from 1 January 2010 to 5% and phasing down to 0% by 2012, on $30.7 million of exports of fresh, chilled or frozen beef to the Philippines (0201-0202).
  • The binding of a 15% tariff from 1 January 2010 and its phasing down to 0% by 2018 on $3.8 million of exports of other frozen edible offal of bovine animals to Vietnam (0206.29).

Copper and copper ores

  • The reduction of a 5% tariff to 3% in 2025 on $33.0 million of exports of unwrought refined copper cathodes to Indonesia (7403.11).
  • The binding of 0% tariffs from 1 January 2010 on $65.1 million of exports of unwrought refined copper cathodes (7403.11) to Malaysia.
  • The binding of 0% tariffs from 1 January 2010 on $1.3 million of exports of copper waste and scrap (7404) to Malaysia.
  • The elimination of a 3% tariff from 2015 on $16.1 million of exports of copper ores and concentrates to the Philippines (2603).
  • The binding of current 0% tariffs from 1 January 2010 on $20.6 million of exports of unwrought refined copper cathodes (7403.11) to Vietnam.

Live animals

  • On $115.7 million of exports of live bovine animals (other than pure-bred breeding animals) to Indonesia (0102.90):
    • The binding of 0% tariffs on oxen from entry-into-force.
    • The elimination of a 5% tariff on buffaloes, from entry-into-force.
    • The reduction of the 5% tariff to 3% in 2025 on exports of all other live bovine animals.
  • The binding of 0% tariffs from 1 January 2010 on $5 million of exports of live horses, asses, mules, hinnies, bovine animals, sheep and goats to Malaysia (0101, 0102, 0104).
  • The elimination of 3% tariffs from 1 January 2010 on $0.8 million of exports of live bovine animals (other than pure-bred breeding animals) to the Philippines (0102.90).
  • The binding of a 0% tariff from 1 January 2010 on $0.4 million of exports of live pure-bred breeding bovine animals to Vietnam (0102.10).

Ferrous waste and scrap

  • The binding of 0% tariffs from entry-into-force on $9.4 million of exports of waste and scrap of iron and steel to Indonesia (7204.10 - 7204.49).
  • The binding of 0% tariffs from 1 January 2010 on $33.0 million of exports of waste and scrap of iron and steel to Malaysia (7204.10 - 7204.49).
  • The binding of 0% tariffs from 2010 on $39.3 million of exports of waste and scrap of iron and steel to 1 January Vietnam (7204.10 - 7204.49).

Animal feed

  • The binding of 0% tariffs from entry-into-force on $45.5 million of exports of flours, meals and pellets, of meat or meat offal to Indonesia (2301.10).
  • The binding of 0% tariffs from entry-into-force on $1.1 million of exports of other Animal feed to Indonesia (2309.90).
  • The binding of 0% tariffs from 1 January 2010 on $6.4million of exports of flours, meals and pellets, of meat or meat offal to Malaysia (2301.10).
  • The binding of a 10% tariff from 1 January 2010 and its phasing down to 0% by 2016 on $1.0 million of exports of flours, meals and pellets, of meat or meat offal to Vietnam (2301.10).

Products of the chemical or allied industries

  • The binding of 0% tariffs from entry-into-force on $39.5 million of exports of ammonium nitrate, whether or not in aqueous solution to Indonesia (3102.30).
  • The elimination of a 1% tariff on 1 January 2010 and the reduction of a 7% tariff to 3% in 2010, and its elimination in 1011, on $2.4 million of exports of safety fuses and related products to the Philippines (3603.00).
  • The elimination of a 3% tariff on 1 January 2010, and the reduction of a 10% tariff to 5% in 2010, 3% in 2011 and elimination in 2012, on $2.9 million of exports of fungicides to the Philippines (3808.92).
  • The elimination of a 5% tariff from 2016 on $5.0 million of exports of prepared additives for cements, mortars or concretes to Vietnam (3824.40).

Wood and articles of wood

  • The binding of 0% tariffs from 1 January 2010 on $1.4 million of exports of coniferous wood sawn or chipped lengthwise, sliced or peeled, exceeding 6 mm in thickness to Vietnam (4407.10).
  • The elimination of 1% and 5% tariffs on 1 January 2010, and reduction of a 7% tariff to 3% in 2010, and its elimination in 2011, on $3.1 million of exports of certain types of multi-ply paper and paperboard to the Philippines (4810.92).
  • The binding of a 10% tariff from 1 January 2010 and its phasing down to 0% by 2016, on $4.1 million of exports of fibreboard of wood (or other ligneous materials) to Vietnam (4411).

Horticulture

  • The elimination of a 5% tariff from entry-into-force on exports of $1.4 million of apples to Indonesia (0808.10).
  • The binding of a 0% tariff, and the elimination of 8%, 10% and 20% tariffs, on 1 January 2010 on $1.3 million of exports of mixtures of prepared or preserved fruit and other edible parts of plants to Malaysia (2008.92).
  • The binding of a 0% tariff, the elimination of 5% and 10% tariffs in 2010 or 2011, on $0.7 million of exports of mixtures of fruit or vegetable juices to Malaysia (2009.90).

Other

  • On exports of $7.1 million of other pumps for liquids to Indonesia: (8413.81)
    • The reduction of 5% tariffs from 2015 to 4% on certain electrically operated pumps and their elimination on entry-into-force for other electrically operated pumps.
    • The elimination of a 5% tariff from entry-into-force on non-electrically operated pumps.
  • The binding of 0% tariffs from entry-into-force on $23.6 million of exports of parts of pumps for liquids to Indonesia (8413.91).

2. Trade in services opportunities for Queensland

Services exporters in Queensland are in a strong position to access the growing services markets in ASEAN. Exports of services to the world, which were worth $9.0 billion in 2009, account for 17 per cent of the State' total exports.

  • The largest sectors are recreational and education-related travel exports valued at $3.3 billion and $2.7 billion, or 37% and 30% of services exports, respectively.
  • Statistics are not available on the percentage of Queensland' 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 construction, mining and energy-related services, education and professional services – where Queensland providers have strong capabilities. For example:

  • 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.
  • 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 The value of exports of raw cane sugar, in bulk is not available on an individual state-basis. Therefore figures in this paper for such exports are total Australian exports. Due to confidentiality restrictions figures are shown for 2008, the most recent calendar year for which total exports are publically available. Queensland accounts for about 90% of Australian sugar exports.
  • 2 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 CY 2009.
  • 3 This item includes exports of raw cane sugar.
  • 4 The four digit heading or the six digit sub-heading of the tariff system is provided that corresponds to the export figure given.
Last Updated: 10 December 2010