Australia and the Pacific Alliance launched negotiations for a Free Trade Agreement (FTA) on 30 June. A regional trading bloc comprising Chile, Colombia, Mexico and Peru, the Pacific Alliance's GDP was worth over USD $1.8 trillion in 2015-16. Over the last decade, Pacific Alliance members had some of the fastest growing economies in the region. The four countries, taken together, account for 37 per cent of Latin America's population, 35 per cent of its nominal GDP, 46 per cent of its exports, and 50 per cent of its total imports.
A Pacific Alliance FTA would enable Australian businesses to access the opportunities presented by that growing market. It would also strengthen our economic relationship with Latin America and provide an opportunity for Australian businesses to diversify their export markets.
We invite stakeholders to submit their views on the potential opportunities and impacts of an FTA. See the Submissions page for more information.
The Pacific Alliance is a growing market for Australian goods and services exporters. In 2016, total two-way trade in goods and services with Pacific Alliance members was worth $5.8 billion, more than double what it was ten years ago. An FTA with the Pacific Alliance would provide Australian businesses with an opportunity to expand our engagement with this growing market.
Pacific Alliance countries are also an attractive investment destination for Australia. There are currently over 300 Australian businesses operating in Pacific Alliance economies. An FTA would provide a platform for expanding and deepening these relationships.
Why is the Government negotiating an FTA with the Pacific Alliance?
With its large market and outward-focused, pragmatic approach to trade integration, the Pacific Alliance presents a growing opportunity for Australian businesses. An FTA would ensure that Australia is well-placed to share in Latin America's economic growth, providing opportunities for expanding our engagement with this growing market. It is a strategic goal to diversify export markets for Australian exporters.
An FTA would strengthen our economic relationship with Latin America. A Pacific Alliance FTA could be negotiated relatively quickly, based on our shared negotiating history with three of the four Pacific Alliance members (Chile, Mexico and Peru) in the TPP. It is not unusual for Australia to pursue multiple agreements with the same FTA partners: having multiple processes supports our goal of opening new trade and investment opportunities for Australia.
Australia will seek a comprehensive, high quality agreement. In particular, areas of interest for better goods market access include agricultural products, aluminium products, mining equipment, pharmaceuticals and paper. By addressing existing tariff barriers and customs procedures, we will aim to ensure that goods trade with Pacific Alliance countries operates as smoothly and simply as possible.
For service suppliers, the Australian Government will seek further opportunities for Australian suppliers in sectors such as education, mining-related services (including professional service suppliers associated with mining such as engineers and geologists), financial services, telecommunications, tourism, environmental services and other professional services such as legal services, architectural design and accounting. Australian service suppliers still face market access barriers in Pacific Alliance members, including restrictions on the level of foreign investment, quotas on foreign workers and, in some cases, prohibitions on foreigners supplying services in any form. We will aim to remove or reduce those barriers, creating more opportunities for Australian service suppliers to benefit from doing business in high growth areas of Latin America.
Australia will also seek to address a range of issues impacting on trade, including digital trade (e.g. e-commerce) and competition policy.