AANZFTA a boon for Asean, modest boost for Brunei

AUSTRALIA'S trade minister Simon Crean welcomed the commencement of the country's largest free trade agreement, the Asean-Australia-New Zealand Free Trade Agreement (AANZFTA), earlier this week in an announcement on the ministry's website. Closer to home, Australia's High Commissioner to Brunei is focusing on the broader liberalisation aspect between the three regions.

Mark Sawers told The Brunei Times yesterday that the historic agreement, which spans 12 economies with over 600 million people and a combined GDP of A$3.1 trillion, will lead to modest improvements in some particular sectors between Brunei and Australia.

"Historically, Brunei has always had a low tariff on Australian goods, much lower when compared to some other countries. So, I believe that this will lead to modest improvements between trade," Sawers said during a telephone interview yesterday.

He said that the other area they hope to see improve is services and investments which would lead to a deepening in trade relations.

"For Australia, the Asean region as a whole is bigger than trade between China or Japan, that's why from our point of view this is an important development. With that, I would like to acknowledge Brunei's important role as coordinator of the agreement as it was impressively handled," the high commissioner said.

Sawers said the FTA's importance includes an economic element programme of capacity building and a system of developing trade capacity in the Asean region, which is the first of its kind.

"Australia and New Zealand would contribute to the regional budget managed by the Asean Secretariat, designed to help countries like Cambodia and Indonesia to some extent, in terms of capacity development (and) trade policy," Sawers said, adding that this extra element was not included in previous agreements.

"The commencement of this agreement is a major milestone and opens up significant opportunities for Australian businesses in one of the fastest growing regions in the world," Crean said in a media release on January 3 when the agreement came into effect. "With Asia leading the global recovery and six out of ten Asean markets expected to grow at rates at least double the forecast OECD average in 2010, there is great potential for Australian exporters to enter new markets."

"This agreement is also an important building block towards deepening Australia's economic integration with the dynamic Asian region. As of today, the agreement covers around 70 per cent of Australia's trade with Asean countries with which we do not have bilateral FTAs," Crean said.

By 2020, the deal will eliminate tariffs on 96 per cent of Australia's current exports to Asean nations, Crean added. Asean accounted for 15 per cent of Australia's trade, valued at A$83 billion ($108 billion) in 2008-2009. This is as large as Australia's trade with China, Australia's largest trading partner. AANZFTA is Australia's first multi-country FTA and the most comprehensive FTA ever concluded by Asean.

In addition to Australia and New Zealand, AANZFTA has entered into force for the following ASEAN countries: Brunei, Burma, Malaysia, the Philippines, Singapore and Vietnam. Indonesia, Cambodia, Laos and Thailand are expected to ratify the agreement in the early part of this year.

"I urge the Australian business community to take full advantage of the many benefits that this far-reaching agreement has to offer," Crean said.

The Brunei Times