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

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
Similar Articles
Relevancy Powered by MondaqAI
Corrs Chambers Westgarth
 
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 Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Corrs Chambers Westgarth
Related Articles
 
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 (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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