ASEAN-Australia-New Zealand Free Trade Agreement
The ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) came into force on 1 January 2010 and now covers all trade between the Philippines, New Zealand and Australia. The agreement also came into force on 1 January for Brunei, Malaysia, Myanmar (Burma), Singapore and Vietnam.
President Gloria Macapagal-Arroyo signed executive order 851 on 23 December 2009, which cleared the way for the free trade agreement to into force for the Philippines on 1 January 2010. Customs Memorandum Circular 1-2010 was subsequently issued by the Bureau of Customs instructing customs officials to apply the negotiated tariff rates at the border.
The Australian and New Zealand embassies, along with the Department of Trade and Industry, presented an overview of the agreement to ANZCHAM members on 5 November. That presentation outlined the following major outcomes:
Imports to the Philippines from Australia
Tariffs on imports from Australia have been eliminated on most dairy and wine products and will be eliminated on:
· meat and livestock by 2012
· wheat, flour and other grains by 2010/11
· horticulture, including juice to mostly zero by 2013
Imports to the Philippines from New Zealand
Tariffs on imports from New Zealand have been eliminated on most dairy products and will be eliminated on:
· kiwifruit in 2011
· most beef products in 2012
· wine in 2015 (after being reduced from 7% to 3% on entry into force)
Exports to New Zealand from the Philippines
82.9% of the Philippines’ exports (based on current trade) are now duty-free and 100% of tariffs will be eliminated by 2020.
Exports to Australia from the Philippines
96% of the Philippines’ exports (based on current trade) are now duty-free and 100% of tariffs will be eliminated by 2020.
Services
The FTA includes a commitment from the Philippines that the current level of market access for New Zealand and Australian service providers in sectors such as education, mining and air transport will be locked in for the future. That provides a level of certainty that service providers from many other countries will not have.
Business mobility
Business visitors and independent professional service suppliers from ASEAN countries have been granted extended stay provisions in Australia and New Zealand, as have Australian and New Zealand business travellers coming to the Philippines.
Investment
The FTA requires additional transparency around investment regulations and gives investors access to international investor-state dispute settlement procedures beyond the domestic court system. Again, this is an advantage that investors from other countries do not currently have.
Other elements
In the context of AANZFTA, New Zealand and the Philippines also completed a number of side-agreements that were not part of the FTA itself. These include cooperation agreements on labour, environment and dairy industry development, as well as special temporary employment entry provisions for Filipino nurses, engineers and farm managers. There was also a commitment to negotiate a reciprocal working holiday scheme.
The agreement’s entry into force is also expected to focus attention on the mutual possibilities that trade between ASEAN and the trans-Tasman countries can bring. For example, Austrade expects there will be a threefold increase in Australian businesses interested in doing business in the Philippines as a result of the agreement and the attention it will generate.
AANZFTA is ASEAN’s fourth FTA and the first that New Zealand and Australia have jointly negotiated. It is the first FTA to be signed since the onset of the financial crisis in late 2008, and as such it sends an important signal that New Zealand, Australia and the Philippines, as well as the other ASEAN countries, are committed to keeping their markets open as a way of encouraging growth and recovery.
For more details on AANZFTA, see www.dfat.gov.au/trade/fta/asean/aanzfta/index.html or www.asean.fta.govt.nz
