ASEAN-Australia-NZ trade talks to start Monday
ASEAN-Australia-NZ trade talks to start Monday
Dow Jones, Canberra
Amid a welter of negotiations for free trade agreements in the region, Australia, New Zealand and the 10 members of the Association of Southeast Asian Nations begin their talks on Monday in Melbourne.
The aim, with the Asean-ANZ talks as with others, broadly is to eliminate as far as possible barriers to trade in goods and services and to investment.
Economic modeling by the Canberra-based Centre for International Economics suggests the FTA could generate gains over 20 years for Australia of around US$19.1 billion and for Asean of $25.6 billion, and underpin a modest expansion of economies.
Australian Trade Minister Mark Vaile will formally start the negotiations, which will then be taken forward by officials for conclusion in about two years.
Canberra is viewing the FTA as a historic development in relations with Southeast Asia, which will help consolidate its economic integration with the region.
As with other FTAs, Australia will focus considerable attention on greater access for farm, mineral and energy products, an Australian official familiar with the talks said Friday.
On average, Asean import tariffs are low, but there are significant peaks for some farm goods that Australia wants to cut, said the official, who requested anonymity.
"There are certainly issues on agriculture," he told reporters at a briefing. "That's a key area for us."
Particular areas cited by Australia include lowering market access barriers for autos into Malaysia and Indonesia, farm goods into the Philippines and alcoholic beverages into several countries.
There is also a range of non-tariff barriers, such as import licenses and border access arrangements, that need to be looked at, he said.
A big area of negotiation for Australia will also be on trade in services, with liberalization of this not nearly as advanced as it is merchandise trade, he said.
The official said the meeting of officials in Melbourne will focus on institutional, procedural and timing issues and create the structures that will carry the negotiations forward.
Australia mostly exports a range of raw or lightly processed farm, mineral and energy products, and increasingly some complex manufactures.
It relies to a lesser extent on export earnings from manufactured products and services such as tourism, education and professional services.
Asean as a bloc and some individual members -- such as Singapore, Indonesia, Malaysia and Thailand -- along with New Zealand, are major trading partners with Australia.
These four Asean nations account for 85 percent of Australia's trade with Asean.
Broadly, Australia imports manufactured goods, though crude oil is a major import from Asean.
Two-way trade between Australia and Asean members totaled A$32.82 billion last fiscal year ended June 30, 2004, while two- way Australia-New Zealand trade totaled A$13.14 billion.
Two-way direct investment between Australia and Asean is small.
The negotiations take place against a backdrop of protracted difficult multilateral talks under the auspices of the World Trade Organization (WTO) and a plethora of FTAs in operation or under negotiations.
Australia, for instance has existing FTAs with Singapore, New Zealand, Thailand and the U.S., and is studying possible agreements with China and Malaysia.
Asean has its Asean Free Trade Area, of AFTA, which aims to remove barriers and facilitate trade and investment among members.
Asean is also negotiating FTAs with China, Japan, South Korea and India, while individual nations have a range of FTAs, such as Singapore has with the U.S. and Japan.
One of Australia's priorities in the Asean-ANZ talks will be to preserve and if possible expand the market access gains secured under its FTAs with Singapore and Thailand.
ASEAN has a combined gross domestic product (GDP) of almost $700 billion.