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The Victorian Government works closely with the Federal Department of Foreign Affairs and Trade (DFAT), to maximise opportunities for Victorian industry from Free Trade Agreements (FTAs), such as those currently being negotiated with the Association of South East Asian Nations (ASEAN), the Gulf Cooperation Council (GCC), China, Japan and Malaysia. In addition to current FTA negotiations, the Victorian Government also works with the Commonwealth Government in its consideration of possible FTA negotiations with countries such as Indonesia, India and South Korea.
An important role of the Victorian Government is to engage with industry and ensure that DFAT also consults with industry as it negotiates FTAs. Key opportunities for Victoria through FTAs currently being negotiated lie in the sectors of agriculture, processed food and wine (in particular dairy products), services (business, legal, financial, telecommunications, education) and investment.
It is important that DFAT is made aware of the potential benefits and costs of FTAs for companies and industry sectors. The Victorian Government also wants to hear of opportunities and challenges for Victorian industry regarding trade with countries with which Australia has, or is considering, FTAs. It is important for industry to understand that while these opportunities and challenges are best addressed during the negotiating stage, FTAs are 'living agreements' providing the opportunity for issues to be raised even after an FTA has been negotiated.
The Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA) was signed in 1983 and provides for duty free access on most goods traded between the two countries. ANZCERTA is now the main instrument governing economic relations between Australia and New Zealand and is considered an FTA success story, having being recognised internationally for the broad nature and relative speed of its liberalisation.
The Singapore-Australia FTA (SAFTA) became operational in July 2003. In addition to tariff elimination, the agreement guarantees increased market access for Australian exporters of services, in particular education, environmental, telecommunications, and professional services.
The agreement also provides a more open and predictable business environment across a range of areas, including competition policy, government procurement, intellectual property, e-commerce, customs procedures and business travel.
The Thailand-Australia FTA (TAFTA) entered into force on 1 January 2005, at which time tariffs on up to 80 percent of Australian exports to Thailand were eliminated. Under the TAFTA, Australia and Thailand will eliminate virtually all tariffs on goods by January 2010.
The TAFTA also provides for increased ease of trade in services, investment and business mobility.
The Australia-US FTA (AUSFTA) came into effect on January 1 2005. It is a comprehensive agreement that immediately eliminated over 97 percent of US tariffs on Australia's non-agricultural and manufacturing exports, and almost two thirds of US tariffs on Australian agricultural products. In addition, Australian industry now has access to the $200 billion US Federal Government procurement market, and those of 28 US States.
Austrade has developed a commercial strategy to assist Australian businesses to take advantage of export opportunities arising from the AUSFTA. Austrade operate 17 offices across the US and have employed 30 export facilitators to provide specialist advice on the US market to Australian exporters.
The Australia - Chile FTA negotiations concluded in May 2008, the agreement was signed in late July and the FTA enters into force on 1 January 2009. The agreement covers goods, services and investment with commitments that reinforce the multilateral trading system. Key aspects of the agreement include the elimination of 97 per cent of tariffs on existing merchandise trade (upon entry into force) with 100 per cent elimination by 2015; access to government procurements markets; and high-standard, transparent protection for intellectual property rights.
For further information on Australia's FTAs and their implications for Victorian industry, please contact:
Industry and Trade Division
A/g Director, Policy and Sector Planning: Sam Steele
Tel: (+61 3) 9651 9341
Policy Advisor, Policy and Sector Planning: Nicole Boldt
Tel: (+61 3) 9651 7691