Do you know what a free trade agreement (FTA) is and how it works? Do you know how many Australia currently has? Are you sure your business is taking advantage of preferential tariffs and increased market access when exporting, or looking to diversify market presence in the international arena?
FTAs support global trade liberalisation and enhance the international competitiveness for businesses. It opens access to multi markets for goods, services and investments. By reducing and eliminating certain barriers to international trade and investment, FTAs benefit exporters, importers, producers and investors.
Australia currently has sixteen FTAs which consist of twelve bilateral agreements and four plurilateral or regional agreements. Eight out of twelve bilateral agreements are with countries in the Asia Pacific and Oceanic Regions including China, Hong Kong, Indonesia, Japan, Korea, Malaysia, Singapore, Thailand and New Zealand.
The four regional agreements are the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), the Pacific Agreement on Closer Economic Relations (PACER) Plus, and the Regional Comprehensive Economic Partnership (RCEP).
RCEP is the most recent FTA (came into force on 1 January 2022) that will bring increased opportunities in the region for Australian businesses. It represents the world's largest free trade agreement. By streamlining requirements around the rules of origin, this modern and comprehensive free trade agreement will encourage growth and investment opportunities in IT and e-commence. The sectors expected to be benefited most are agriculture and food, digital services, healthcare, education, resources and energy, and infrastructure.
In addition, an interim agreement of the Australia-India Economic Cooperation and Trade Agreement was signed between the two countries. At the time of writing this was not yet in force, but you can keep updated here.
To take full advantage of FTAs for your business, the following online resources can help you unpack them and understand how they can benefit your business:
- DFAT website - and the FTA Portal
- Austrade Free Trade Advantage
- Austrade FTA Seminars
- Australia Border Force
- Export Finance Australia
Doing business in a foreign market is always going to be challenging. For those looking to operate businesses or looking to invest in the Asia-Pacific region, the Moore Australia National Asia Desk can be your gateway to a successful venture.
Our experts have significant personal and business relationships with our Moore Global counterparts in the region and are fluent in most APAC languages. They can support you with every aspect of your business journey, from tax to investment to visa applications.
With a team of culturally diverse professionals who have a real understanding of the environments you operate in, our Asia Desk is ideally placed to help you to embark upon a new chapter in your business.
This article is issued as general commentary - please contact us about your specific circumstances.