ASEAN – Australia/New Zealand Free Trade Agreement (AANZFTA)

Closing the DealVangelis Vitalis

Lead Negotiator

Ministry of Foreign Affairs and Trade

What is AANZFTA?

• The Association of South East Asian Nations

Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Viet Nam

• …and Australia

Why AANZFTA? (Offensive and Defensive Commercial )

• ASEAN is New Zealand’s third largest export market ($4.1b to March 2008)

• 6 ASEANS in top 25 for exports

• Growth of 36% last year 17% average since 2003

• Investment in ASEAN growing fast (60% growth since 2003) – stocks of $3.76b

• Competitive pressures

• First-mover advantage in services and investment

Why AANZFTA? (Strategic)

• Economic platform for bilateral FTAs that go further

• At the political and economic centre of East Asian regional integration.

• Key component in our strategy of widening and deepening our regional integration

AANZFTA: Unique

• Size and diversity of ASEAN

• Other FTAs ASEAN has concluded

• ‘single undertaking’ approach is new for ASEAN

• Economic cooperation operationalised

• First example of ‘jointery’ with Australia

Current status of negotiations

• Fifteen rounds to date

• Closing Phase of negotiations

Goods

• Tariff burden on business will be reduced from the current up to $50 million per annum

• Many tariffs significant…

• …but even the small ones proving hard to budge

Rules of Origin (ROO)

• Business will have simpler regional ROO

• Key benefit is plurilateral nature of ROO• Two main approaches

• Regional value content• Change of tariff classification (CTC)

• A “co-equal” rules approach agreed• Goods need to be certified (as with China FTA)

to get tariff preferences

Customs

• Customs facilitation will be improved

• Review and appeal mechanisms

• Transparency

• Reducing transaction costs

Services

• Business will have new avenues for information (eg about licensing) and some new bound commitments for market access that are expected to be WTO-plus

• Market access• Transparency (incl licensing and regulation)• Most favoured nation provision?

Investment

Businesses will have new protections above the status quo in ASEAN markets

Protection elements will apply to investors and service suppliers

Other Areas

• Business will have improved transparency in TBT and SPS and may include some WTO-plus improvements for the protection of intellectual property

• Negotiations have commenced on trade remedies

• Competition policy, government procurement and labour and environment are works in progress

Contact Points

Ministry of Foreign Affairs & Trade

Private Bag 18-901

Wellington

Vangelis Vitalis

Lead Negotiator

DDI: 04-439-8697

Email: vangelis.vitalis@mfat.govt.nz

Luke Leonard

Coordinator, ASEAN FTA

DDI: 04-439-8084

Email: luke.leonard@mfat.govt.nz