Impact on Tasmania for trade in goods and services

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

17 November 2010

1. Trade in goods

Tasmanian merchandise exports to ASEAN (calendar year 2009): $483 million.  Principal exports:

  • Zinc $116 million
  • Aluminium $108 million
  • Various Ores and concentrates of base metals $93 million
  • Veneers, plywood and particle board $36 million
  • Milk and cream, including in powder $18 million
  • Chocolate and preparations of cocoa $12 million
  • Fish, fresh, chilled or frozen (f.c.f.) $9 million
  • Seafood, prepared or preserved $8 million
  • Ferrous waste and scrap $7 million
  • Confidential items of trade $27 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 Tasmania' 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 Tasmania, calendar year 2009):

Zinc

On Tasmania' leading export to ASEAN, AANZFTA will ensure tariff-free treatment for all products, including:

  • The binding of tariffs of 0% from entry-into-force on $21.2 million of exports of unalloyed unwrought zinc to Indonesia (7901.11) to Indonesia.1
  • The binding of tariffs of 0% from 1 January 2010 on $61.6 million of exports of unwrought zinc to Malaysia (7901).
  • The elimination of 1% tariffs from 1 January 2010 on $0.3 million exports of unwrought zinc to the Philippines (7901).
  • The binding of tariffs of 0% from 1 January 2010 on $16.4 million of exports of unwrought zinc to Vietnam (7901).

Aluminium

  • The binding of tariffs of 0% from entry-into-force on $22.9 million of exports of unwrought aluminium to Indonesia (7601).
  • The binding of tariffs of 0% from 1 January 2010 on $23.3 million of exports of unwrought aluminium to Malaysia (7601).
  • The binding of tariffs of 0% from 1 January 2010 on $0.6 million of exports of aluminium powders to Malaysia (7603.10).
  • The elimination of 1% tariffs from 1 January 2010 on $0.8 million of exports of unwrought aluminium to the Philippines (7601).
  • The binding of tariffs of 0% from 1 January 2010 on $14.6 million of exports of unwrought aluminium to Vietnam (7601).

Ores and concentrates of base metals

  • The binding of tariffs of 0% from 1 January 2010 on $59.3 million of exports of tin ores and concentrates to Malaysia (2609.00).
  • The binding of tariffs of 0% from 1 January 2010 on $0.7 million of exports of lead ores and concentrates to Vietnam (2607.00).

Veneers, plywood and particle board

  • The binding of tariffs of 0% from 1 January 2010 on $36.4 million of exports of wood sawn or chipped lengthwise or sheets for veneering to Malaysia (4407-4408).

Dairy products

  • The elimination of 5% tariffs from entry-into-force on $3.8 million of exports of fresh cheese (0406.10) and other cheese, not elsewhere specified, unprocessed (0406.90) to Indonesia.
  • The elimination of tariffs of up to 2% from 1 January 2010 on exports of $1.7 million of fats and oils derived from milk (excl butter and dairy spreads) to Malaysia (0405.90).
  • The reduction of 3% tariffs from 1 January 2015 to 2% with elimination in 2019, on exports of $0.5 million of milk and cream, not concentrated or containing added sugar or other sweetening matter to the Philippines (0401).
  • The elimination of 1% tariffs from 1 January 2010 on exports of $10.5 million of milk and cream, concentrated or containing added sugar or other sweetening matter with fat content not exceeding 1.5% to the Philippines (0402.10).
  • The elimination of 3% tariffs and the reduction of a 7% tariff to 3% from 1 January 2010 and its elimination in 2011 on $1.2 million of exports of cheese to the Philippines (0406).

Chocolate and preparations of cocoa

  • The reduction of 15% tariffs from 1 January 2015 to 7% with elimination in 2012, on exports of $1.1 million of chocolate and other preparations containing cocoa in blocks, slabs or bars, weighing less than 2 kg to Malaysia (1806.31 + 1806.32).
  • The reduction of 7% tariffs from 1 January 2010 to 3% with elimination in 2015, on $3.7 million of exports of chocolate and other preparations containing cocoa in blocks, slabs or bars, weighing less than 2 kg to the Philippines (1806.31 + 1806.32).

Fish and seafood

  • The elimination of 5% tariffs from entry-into-force on exports of $3.2 million of pacific salmon to Indonesia (0302.12).
  • The binding of tariffs of 0% from 1 January 2010 on $0.9 million of exports of Pacific salmon to Malaysia (0302.12).

Ferrous waste and scrap

  • The binding of tariffs of 0% from entry-into-force on $2.5 million of exports of ferrous waste or scrap to Indonesia (7204).
  • The binding of tariffs of 0% from 1 January 2010 on $3.5 million of exports of ferrous waste or scrap to Vietnam (7204).

Fruits, nuts and vegetables

  • The elimination of 5% tariffs from entry-into-force on exports of $0.2 million of fresh cherries to Indonesia (0809.20).
  • The elimination of 5% tariffs from 1 January 2010 on exports of $0.4 million of fresh cherries to Malaysia (0809.20).
  • The binding of a 0% tariff from 1 January 2010 on $0.6 million of exports of onions and shallots to Malaysia (0703.10).
  • The reduction of 40% tariffs from 1 January 2010 to 35% and further reductions (e.g. to 10% in 2015 and 5% in 2017) until tariff eliminated in 2019 (Shelled) or 2020 (In Shell), on exports of $0.5 million of fresh or dried walnuts to Vietnam (0802.31 + 0802.32).

Other

  • The binding of 5% tariffs on entry-into-force and their elimination in 2020 on $1.3 million of exports of fresh, chilled or frozen boneless beef to Indonesia (0201.30 + 0202.30).
  • The binding of 0% tariffs from 1 January 2010 on $1.2 million of exports of flours, meals and pellets of meat to Malaysia (2301.10).
  • The binding of 0% tariffs from 1 January 2010 on $1.5 million of exports of waste and scrap paper and paperboard to Malaysia (4707).
  • The binding of 0% tariffs from 1 January 2010 on $1.5 million of exports of other circuit breakers to Vietnam (8535.90).

2. Trade in services opportunities for Tasmania

Services exporters in Tasmania are in a strong position to access the growing services markets in ASEAN. Exports of services to the world, which were worth $402 million in 2009, account for 12 per cent of the State' total exports.

  • The largest sectors are recreational and education-related travel, valued at $181 million and $149 million, or 45% and 37% of services exports, respectively.
  • Statistics are not available on the percentage of Tasmania' 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, education and professional services – where Tasmanian 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.
  • 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 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