The Association of Southeast Asian Nations (ASEAN)-Australia-NewZealand Free Trade Area (AANZFTA)
Overview
Key outcomes for agricultural products
Rules of Origin
Overview
The Association of Southeast Asian Nations (ASEAN) – Australia – New Zealand Free Trade Area (AANZFTA) will enter into force once Australia, New Zealand and at least four ASEAN Member Countries have notified each other that internal requirements to implement the AANZFTA have been completed.
The agreement establishing the AANZFTA was signed by the Minister for Trade, the Hon Simon Crean and his ASEAN and New Zealand counterparts, on 27 February 2009 in Hua Hin, Thailand.
The AANZFTA Parties links the ten ASEAN members (Burma, Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, The Philippines, Singapore, Thailand and Vietnam) with Australia and New Zealand.
AANZFTA is the first plurilateral, or multicountry, free trade agreement Australia has concluded. Australia stands to gain from this agreement across many sectors, including exports of industrial goods, agricultural products and services.
AANZFTA contains substantial tariff reduction and elimination commitments, as well as World Trade Organization (WTO) - plus commitments in services which will provide commercially meaningful benefits to Australian business and further strengthen commercial ties with ASEAN.
The Agreement creates new and improved opportunities for the Australian agri-food sector, including for:
- Meat and livestock
- Dairy products
- Fish
- Grains
- Horticulture
- Sugar
- Wine and spirits
- Wool and cotton
- Wood and wood products
It is expected that AANZFTA will enter into force by 2010.
Key outcomes for agricultural products:
Key outcomes for agri-food and forest products exports of Australian origin (see also Rules of Origin) include:
Meat and livestock: existing liberal access for live bovine animals will be guaranteed through tariffs bound at 0% or phased to 0% or 2.5%. Tariffs on most meat tariff lines bound at 0% on entry-into-force (EIF) or phased to 0%, although some lines are subject to tariff reductions only, and a few lines are excluded from tariff commitments in some countries.
Dairy products: tariffs on all tariff lines bound at 0% on EIF or phased to 0%, except for 11 lines in Indonesia that will be phased to 4%, 2 lines in the Philippines that will be phased to 5%, and 3 lines (liquid milk) in Malaysia subject to improved tariff quota access.
Fish: tariffs on the majority of tariff lines bound at 0% or phased to 0%, with tariffs on remaining lines mainly reduced to 5% or less.
Grains: for most products tariffs bound at 0% on EIF or phased to 0%. Rice is excluded from tariff commitments by Indonesia, Malaysia and the Philippines. Maize is excluded from tariff commitments by Indonesia.
- Fruit and nuts: tariffs on most products phased to 0%, with the major exceptions being mandarins and mangoes in Indonesia (only modest tariff reductions) and a range of tropical fruits in Malaysia (reduced to 5%).
- Vegetables: tariffs on all products phased to 0% in Malaysia and Vietnam. Tariffs on most products phased to 0% in Indonesia and the Philippines, but there will only be modest reductions on some products with high tariffs (including potatoes and carrots in Indonesia; potatoes, celery, carrots, cauliflowers, broccoli and lettuce in the Philippines), and a few other products phase to 5% or less. Tariffs on fruit and vegetable juices; prepared and processed fruit and vegetables and nuts: are bound at 0% on EIF or phased to 0%.
Sugar: Malaysia will bind its tariffs at 0% on EIF, while Vietnam will reduce its in-quota and out-quota tariffs progressively from 2010 to 2022. Indonesia and the Philippines have excluded sugar from their tariff commitments. Wine and spirits: the Philippines will phase all tariffs to 0% by 2015, and Vietnam will reduce its tariffs in 2022. Indonesia and Malaysia have excluded wine and spirits from tariff commitments.
Wine and spirits: the Philippines will phase all tariffs to 0% by 2015, and Vietnam will reduce its tariffs in 2022. Indonesia and Malaysia have excluded wine and spirits from tariff commitments.
Wood and wood products: for wood, tariffs on the majority of tariff lines will be bound at 0% or phased to 0%. For pulp and paper, tariffs will be eliminated on all tariff lines in Indonesia, Malaysia and the Philippines, and for the majority of tariff lines in Vietnam, with tariffs on remaining lines phased to 5%.
Wool and cotton: tariffs on all tariff lines bound at 0% on EIF or phased to 0%.
Rules of Origin
The Rules of Origin (ROO) under AANZFTA will facilitate trade between the Free Trade Agreement partners by:
- bringing a high level of flexibility to the origin tests applying to most goods;
- encouraging greater regional integration of the ASEAN, Australian and New Zealand economies; and
- implementing a robust system of certification and verification.
Rules of Origin provide the basis for determining which goods will qualify for the tariff commitments negotiated as part of AANZFTA. The ROO criteria guarantee that materials from outside the AANZFTA region are substantially transformed within the region prior to trade at the AANZFTA preferential rate between the AANZFTA partners.
The AANZFTA ROO will allow a high degree of flexibility in determining the origin of goods for export. For around 83 per cent of sub-headings the ROO will be based on a ‘co-equal’ approach under which exporters will be free to choose to meet either a change in tariff classification (CTC-based) rule or an equivalent regional value content (RVC-based) rule.
The AANZFTA ROO will also encourage a greater level of regional integration by allowing regional cumulation – originating materials from an AANZFTA country used in the manufacture of goods in another member country can be treated the same as materials from that second country in determining the origin of the final goods.
Further information on the AANZFTA including the full text of the agreement is available at www.dfat.gov.au
(source: www.dfat.gov.au)