A Boost for Regional Trade and Cooperation
The Australian Government has announced a significant development that promises to reshape trade dynamics in the region — the upgrade of the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA).
This major step was recently taken by Assistant Foreign Minister Tim Watts, who signed the Second Protocol to Amend the Agreement during the 28th ASEAN Economic Ministers – Closer Economic Relations Consultation meeting held in Semarang, Indonesia.
The importance of this upgrade cannot be overstated:
- it marks a substantial modernisation of the AANZFTA framework to ensure its continued efficacy in delivering benefits to businesses, workers and consumers across Australia, as well as the wider region
- it includes additional commitments concerning services and investment
- it emphasises the significance of sustainable and inclusive trade practices.
One of the most notable enhancements brought about by the upgraded AANZFTA is the inclusion of additional commitments concerning services and investment. These commitments are set to create a more favourable environment for Australian exporters and investors, fostering growth and collaboration in these crucial economic sectors. Furthermore, the upgrade aims to bolster supply chain resilience and promote the adoption of digital technologies, aligning the agreement with the demands of the modern trade landscape.
Sustainable and Inclusive Trade
Beyond the economic advantages, the upgraded AANZFTA also emphasises the significance of sustainable and inclusive trade practices. The agreement incorporates essential commitments to facilitate enhanced cooperation on vital issues such as environmental protection, the green economy, labour rights and women’s economic empowerment. This demonstrates a forward-looking approach that not only prioritises economic growth but also considers the broader well-being of societies and the planet.
ASEAN: A Thriving Market
The ASEAN region, with a population exceeding 660 million, stands as one of the globe’s most rapidly expanding markets. Since the inception of AANZFTA in 2010, the region’s GDP has surged by an impressive 44 per cent, currently standing at a substantial USD 3.6 trillion. This upward trajectory is projected to persist into the next decade and beyond, promising continued opportunities for trade and collaboration.
Collectively, trade with ASEAN member countries constitutes more than 14.3 per cent of Australia’s overall trade portfolio. The region also plays a pivotal role in consuming Australian energy, agricultural products, minerals, and educational services, solidifying its position as a key partner in Australia’s economic ventures.
The Road Ahead
The next crucial step involves the ratification process among AANZFTA member nations. The goal is to facilitate the agreement’s entry into force by 2024. In Australia’s case, this process involves following the treaty-making pathway, which includes tabling the upgraded AANZFTA in both Houses of Parliament. The Joint Standing Committee on Treaties (JSCOT) will then deliberate on the proposal, and interested stakeholders will have the opportunity to contribute their perspectives through written submissions.
The upgraded ASEAN-Australia-New Zealand Free Trade Area holds immense promise for fostering economic growth, regional cooperation, and sustainable trade practices. As we stand on the cusp of a new era in regional trade dynamics, it is evident that this development will have a lasting impact on businesses, workers and consumers across Australia and the wider ASEAN region.
Article first published as https://www.trademinister.gov.au/minister/don-farrell/media-release/deepening-economic-ties-our-asean-partners (21 Aug 2023)