Minister for Trade, Tourism and Investment The Hon Steven Ciobo MP
I am delighted to present the second Latin America edition of business envoy and highlight the enormous progress since our last edition in December 2016.
The Turnbull Coalition Government has been strengthening our economic partnerships with Latin American countries. We are delivering three major agreements that will transform our relations with the region, boost jobs and drive economic growth in Australia.
In March, Australia signed the Trans-Pacific Partnership (TPP-11), which draws in eleven Asia-Pacific countries, including Mexico, Chile and Peru. In February, I signed the Peru-Australia Free Trade Agreement (PAFTA) with Peru’s Minister for Foreign Trade and Tourism, Mr Eduardo Ferreyros. And in July last year, we launched Free Trade Agreement (FTA) negotiations with the Pacific Alliance of Colombia, Peru, Chile and Mexico.
The TPP-11 is a landmark deal for our country and the region, which will eliminate more than 98 per cent of tariffs in a trade zone with a combined GDP of $13.7 trillion.
Among other gains, it will deliver an FTA with Mexico, one of the world’s top 20 economies. It will eliminate beef tariffs within 10 years of entry into force and eliminate sheep meat tariffs within 8 years of entry into force in Mexico. It will also provide Australia with new quota access for dairy products including butter, cheese and milk powders.
PAFTA will improve market access for Australian business with Peru — a country of 31 million people with a GDP of $262 billion and one of the fastest growing economies in Latin America. The agreement will improve access for our farmers, particularly in sugar, create new opportunities for our mining services and ensure Australian degrees are recognised in Peru.
Since opening our Embassy in Lima in 2010, Australian companies in Peru have grown to 90, with investment estimated at around $5 billion. With the signing of PAFTA this is set to grow even more, which is great news for our cattle, dairy, and wine industries, amongst others.
A priority for 2018 is to secure a comprehensive and beneficial FTA with Pacific Alliance countries. The Pacific Alliance trading bloc accounts for 55 per cent of the region’s exports and 57 per cent of its imports, an appealing environment that has already attracted over 300 Australian businesses. An FTA with the Pacific Alliance will complement and build on the TPP-11 and PAFTA to bring expanded opportunities for Australian exporters.
The Pacific Alliance will deliver an FTA with Colombia and we are looking to ensure that the agreement delivers new opportunities that build upon the existing FTA framework in the region by tackling new issues such as non-tariff measures.
Once implemented, these three agreements, in combination with our existing FTA with Chile, will open the gateway to Latin America and expand opportunities for Australian business.
But it does not stop there. We will continue to work with Latin American governments as they implement economic reforms and further open their economies. Many view Australia’s open and competitive economy as a successful model, so Australian institutions and companies can be a potential source of knowledge and innovation.
Last year I launched the joint Export Council of Australia and Austrade report, Argentina’s Renewal: Capitalising on reform in South America’s second-largest economy, which outlines how business-friendly reforms are opening doors for Australia’s agriculture, energy and digital services sectors. Similar reforms are taking place in Brazil, Mexico and Colombia.
Australian companies, such as BHP, have been taking advantage of Mexico’s energy reforms to invest in petroleum exploration and production. To further these opportunities, I led a delegation of Australian business leaders to Mexico in October last year. Our successful visit identified new opportunities for collaboration in a number of sectors, including resources, premium food and beverages, infrastructure, financial services and education and research.
Our regional footprint grew in Latin America last year with a new Australian Embassy opening in Bogota. Colombia is the fourth largest economy in Latin America, with a population of 48 million. The end of Colombia’s 52-year conflict opens the door for businesses to invest as Colombia benefits from its peace dividend. The Pacific Alliance FTA will enhance our access further.
Educational opportunities for new partnerships and innovative education delivery across all sectors continue to thrive. Brazil is now Australia’s fifth largest source of international students and Colombia the eleventh largest.
Latin America is a diverse region of opportunity for Australian business and is now primed as a destination for Australia’s expanded business engagement. Australia’s hard work has opened the doors, now it’s time to walk through the gateway to opportunity.