Late yesterday (28 August 2008), the Australian Minister for
Trade announced that Australia and New Zealand had concluded
negotiations for a free trade agreement with the ASEAN nations
(to be known as the AANZFTA).
The full text of the AANZFTA has yet to be released.
However, according to press releases from the Minister for
Trade, the following highlights have been announced:
The parties to the AANZFTA comprise the 10 ASEAN members
(Burma, Brunei, Darussalam, Cambodia, Indonesia, Laos,
Malaysia, The Philippines, Singapore, Thailand and Vietnam)
together with Australia and New Zealand.
The AANZFTA will include trade in goods and services
together with investment, intellectual property, competition
policy and economic co-operation which reportedly makes it
the most comprehensive FTA which ASEAN has negotiated. In
relation to economic co-operation, the AANZFTA refers to a
work program to be carried out over 5 years with an estimated
cost of $20-$25 million.
The AANZFTA takes into account different levels of
development of ASEAN members. It does this by providing for
different timeframes for implementing certain FTA
commitments. For these purposes, Australia and New Zealand
will typically have the shortest implementation timeframes
and the 3 least developed countries (Burma, Cambodia and
Laos) the longest.
In relation to goods, the AANZFTA provides for:
high levels of tariff elimination;
tariffs to be eliminated on between 93% and 96% of
tariff lines in key ASEAN markets;
high levels of tariff elimination in some countries but
lower levels of tariff elimination in the newer ASEAN
member countries (being Vietnam and the 3 least developed
general tariff elimination to apply to approximately
95% to 97% of Australia's current trade with
with limited exemptions, existing tariffs will be
capped and subject to reductions in most cases leading to
many low tariffs will be eliminated as early as 2010
high tariffs will be subject to significant cuts early
in the transition period and then gradually reduced or
Commitments in terms of services reportedly go beyond the
ASEAN WTO round offers including commitments in engineering
services (Malaysia and The Philippines), legal services
(Vietnam), accounting (Malaysia and The Philippines),
architecture (Brunei and The Philippines), education services
(Malaysia, The Philippines and Vietnam), financial services
(Indonesia) and construction services (Indonesia and The
Philippines). There are also some significant improvements in
temporary entry commitments in some markets. There will be
the usual provision for the parties to work together towards
mutual recognition for professional qualifications and
The AANZFTA establishes a new regime for investment
protections and includes an investor – state
dispute resolution mechanism.
In terms of intellectual property (reportedly for the
first time in an external ASEAN FTA) it includes substantive
and "best endeavours" commitments to copyright,
trade marks and transparency as well as establishing a
framework for further commitments on intellectual property
The AANZFTA establishes a basis for competition-related
co-operation (including exchanges of information) and a basis
to facilitate trade through e-commerce in the region.
The material does not provide any details of the
mechanism for seeking the benefits for preferential trade in
goods. No details have been provided in relation to the rules
of origin which will apply or whether there will be a
requirement for certificates of origin and, if so, what form
they will take. Presumably, details will be provided in the
near future together with other information sessions to those
The AANZFTA will have no impact on Australia's
existing FTA with New Zealand, Singapore and Thailand.
Clearly, these are only the very early stages of information
being released regarding AANZFTA. There will now be significant
work by both government and the private sector to work on the
detail and ensure that all parties take full benefit at the
commencement of the AANZFTA. We will be working with our
Interlaw partners in ASEAN countries and those in related
services industries (including customs brokers and freight
forwarders) to ensure that those affected are aware of the
terms of the AANZFTA at the earliest opportunity and take full
benefit of those advantages which have been provided. We will
also be working with government agencies to assist in the
sharing of information regarding the AANZFTA. Clearly, the
terms of the AANZFTA will form a significant focus in
presentations and other sessions later in the year including
the proposed round of CBFCA member forums in October and
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should
be sought about your specific circumstances.
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