Australia: Australia's trade deals: where are we at, and what's on the horizon

Last Updated: 29 December 2016
Article by Graham Taylor, Samy Mansour and Ken Ooi

Most Read Contributor in Australia, November 2017

Australia has made progress on various bilateral agreements in 2016, but Brexit and the possible collapse of the Trans-Pacific Partnership have thrown a spanner in the works.

The direction of trade agreements, and the rules that govern global commerce, have significantly changed over the past year. 2016 began positively for the free trade movement with the China-Australia Free Trade Agreement (ChAFTA) entering into force in December 2015. In contrast, the surprise Brexit decision, and the election of Donald Trump at the end of 2016 indicated a potential global shift towards protectionist policies.

Reviewing the progress of trade deals relevant to your businesses, and considering what is on the horizon, is an important part of positioning your business in the international marketplace. Since we last reviewed the impact of Free Trade Agreements (FTAs) in Australia and the changes to Australia's foreign investment regime in March, there have been a number of milestone events for trade agreements relevant to Australian businesses.

ChAFTA

The ChAFTA has paved the way for increased trade with one of Australia's most significant trading partners. China is Australia's largest trading partner and has been responsible for more than a quarter of Australia's total exports. According to DFAT, more than 85% of Australia's goods exports to China (by value) enter duty free or at preferential rates as a result of ChAFTA; this is expected to rise to 93% by January 2019 and to increase again to 97.9% when ChAFTA is fully implemented by January 2029.

MOU with Columbia

A Memorandum of Understanding on Bilateral Cooperation in the oil and gas sector was signed in January 2016. This is expected to enhance opportunities for Australia's well-established oil and gas sectors and strengthen business ties between the two countries.

Brexit

Following a referendum held in June 2016, the UK Government announced its intention to withdraw from the EU by invoking Article 50 of the Treaty on European Union by the end of 2017. Although this would put the UK on track to leave the EU by 2019, the terms of the withdrawal from the EU are yet to be negotiated.

SAFTA Amendment

Significant benefits to Australian business will flow from the agreement to update and modernise the Singapore-Australia FTA (SAFTA) that was announced in October 2016. Although the agreement is yet to be reflected in domestic law, the updated SAFTA represents an increased opportunity for Australian businesses to trade with Singapore with less regulation and greater certainty.

Trump and the TPP

It was expected that the Trans-Pacific Partnership (TPP) would create excellent opportunities for Australian commerce, including the energy and resources sector. Negotiations concluded in October 2015 and the agreement was signed in February 2016. The TPP will only enter into force 60 days after all original signatories have notified completion of their domestic legal procedures, or if at least six original signatories accounting for 85% of the combined gross domestic product of the original signatories have ratified the TPP.

The election of Donald Trump is seen as a significant obstacle for the TPP. President-elect Trump has announced that he intends to issue "a notification of intent to withdraw from the Trans-Pacific Partnership" - an agreement which he describes as a potential disaster for the United States of America.

Without the United States, it is unlikely that the required signatories (by number or GDP) will be achieved to allow the TPP to come into force. If the United States does withdraw, this would mean an end to the world's largest trade deal, made up of 12 countries representing around 40% of the global economy and a quarter of world trade.

IA-CEPA

Progress was made towards achieving a free trade agreement between Australia and Indonesia in the fifth round of negotiations held in November 2016. It is envisaged that this agreement will create opportunities for the Australian energy and resources sector in particular, and is also likely to benefit companies in the agriculture and food and beverages industries.

KAFTA

The Korea-Australia Free Trade Agreement (KAFTA) celebrated its second year anniversary in December 2016 with a list of strong trade results across a broad range of sectors. Under KAFTA, a fourth round of tariff cuts will occur on 1 January 2017, which is expected to deliver continued growth in this important relationship.

What Australian businesses should expect from trade agreements in the future

The Australian Government now has ten FTAs in force; the TPP which has concluded but is not yet in force; and seven FTAs that are formally under negotiation. As a result, there are three broad categories of changes that the Government will seek to implement going forward:

  • keeping the existing FTAs up to date and relevant with the implementation of appropriate amendments (the SAFTA amendments are a good example of this);
  • concluding FTAs that are currently in negotiation; and
  • responding to the political and social environment with new trade agreements.

As earlier outlined, Brexit and the US election result have given rise to uncertainty in existing arrangements and disrupted market expectations.

As a result of the Brexit fallout, the Australian Government has announced that it has commenced work towards negotiations with the EU, and has established a bilateral Trade Working Group that is tasked with scoping the parameters of an Australia-UK FTA.

Given the potential collapse of the TPP, the significance of negotiations for the Regional Comprehensive Economic Partnership (RCEP), which involves 16 countries and almost half of the world's population, has increased. Notably for Australia, the RCEP includes China, which was not a party to the TPP negotiations.

Understand the rules and position your business accordingly

Australia is deeply integrated with international markets and changes to the rules of global commerce have significant implications for Australian businesses. Australian businesses should consider the opportunities that arise from trade agreements and proactively review their international strategies in light of these changes.

RELATED KNOWLEDGE

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

    Disclaimer

    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions