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Leaders from ASEAN (Association of Southeast Asian Nations), Australia and New Zealand have agreed to launch negotiations for a Free Trade Agreement (FTA) involving the 10 countries of ASEAN and Australia and New Zealand. This paper provides general information on the negotiation of an FTA between the 12 countries. Input from New Zealand stakeholders was sought via a public submissions process in 2004. The public consultation process is an ongoing one that will provide further opportunities for input and comment on the FTA negotiation.
March 2005 - First negotiating round in Manila, the Philippines.
June 2005 - Second round in Auckland, New Zealand.
April 2006 - Fifth round in Rotorua, New Zealand.
September 2006 – Most recent round in Hobart, Australia
November 2006 – Next round in Singapore.
Mid- 2007 - Expected conclusion of negotiations.
At their Summit meeting in Vientiane, Laos on 30 November 2004, ASEAN, Australian and New Zealand leaders agreed to launch negotiations for an FTA.
They agreed that the FTA would be comprehensive, covering trade in goods, services and investment. Negotiations would begin in early 2005 to be concluded within two years. The FTA would be fully implemented within 10 years.
Together the 12 countries involved have a combined population of over 500 million people and an estimated GDP exceeding US$700 billion. Agreement to move to FTA negotiations follows four years of economic and technical cooperation under the AFTA-CER Closer Economic Partnership agreed in 2000. At that time it was estimated that an FTA would boost aggregate GDP across the 12 countries by more than US$48 billion over the period 2000-2020 with an additional US$3.4 billion to New Zealand.
Since then New Zealand has concluded an agreement with Singapore and Thailand and is negotiating with Malaysia. These initiatives will reduce the incremental gains to New Zealand of a collective agreement with ASEAN but significant gains are still expected.
Counting the EU as a single destination, ASEAN collectively is New Zealand's fifth largest export market and fifth largest source of imports. Exports at $2.2 billion constitute 8% of New Zealand's total exports, with imports at $2.7 billion representing 8.5% of total imports.
Six ASEAN countries rank amongst New Zealand's top 20 export destinations:
On the import side six ASEAN countries are amongst New Zealand's top 20 sources of imports:
New Zealand's services exports to ASEAN exceed $400 million per year. In the investment area, approximately $500 million - 3.4% of New Zealand's direct investment offshore is invested in ASEAN, while ASEAN countries contribute over $1.1 billion - 2% of the foreign direct investment in New Zealand.
Negotiations for a bilateral FTA between Malaysia and New Zealand support our engagement in the broader process.
An FTA between New Zealand, Australia and ASEAN is expected to strengthen economic growth and development throughout the region and to facilitate the development of a closer economic relationship between New Zealand and ASEAN by:
Previous bilateral trade agreements entered into or under negotiation by New Zealand have addressed or are addressing:
Improving market access opportunities for goods and services
Initial analysis suggests that an FTA with ASEAN would lead to an expansion of net trade in merchandise goods and services as a result of the elimination of tariff and non-tariff barriers.
New Zealand exports are heavily dominated by primary products. Agricultural goods, particularly dairy products remain the largest export with forestry and fishery products being other important components. Non-agricultural exports have declined as a proportion of overall trade from almost 26% in 1993 to just over 15% in 2003. In the services area ASEAN collectively is New Zealand's fourth largest source of international students, third largest source of tourists and third largest consumer of other commercial services. It is New Zealand's largest customer for construction and related engineering services.
In the merchandise trade area barriers can include restrictive tariffs in certain sectors, quotas and a range of non-tariff measures. Non-tariff measures can include regulatory restrictions, customs procedures, inspection, certification, approval processes, testing, sanitary and phytosanitary requirements and labeling requirements, as well as any other business compliance costs. In relation to services a wide range of regulatory and other barriers exist.
A key objective of an FTA for New Zealand is to reduce these restrictions to achieve gains across a range of goods and services for New Zealand exporters.
The government is therefore interested in information from New Zealand businesses on the tariff, non-tariff and regulatory barriers that affect their ability to export to ASEAN. Where relevant, any information supplied should be country specific.
New Zealand tariffs
New Zealand has progressively reduced tariffs overtime. Approximately 95% of all imports (by value) coming into New Zealand have a zero tariff. The Tariff Review last year detailed a programme of further reductions until 2009. As at July 2009 the highest Normal Tariff (Most Favoured Nation (MFN) tariff) will be 10% on clothing, footwear and carpets. At the same time New Zealand remains committed to making progress towards achievement of the Asia Pacific Economic Cooperation (APEC) Bogor Goals by developed economy members by 2010 and by developing economy members by 2020. When the government made decisions on the Tariff Review it noted that the decisions reached in the Review did not preclude FTA negotiations or tariff reductions negotiated in the present WTO Doha Round.
Improving investment linkages
The government is interested in any views on what measures could be adopted to help encourage further investment flows between New Zealand and ASEAN.
Encourage productive commercial relationships
An important objective of an FTA will be developing closer commercial linkages between New Zealand and ASEAN. These linkages will facilitate trade in goods and services, and investment. The government is interested in any views of New Zealand businesses as to any measures that could be pursued to achieve this objective.
Sustainable development
In 2001 the Government adopted a Framework for Integrating Labour Standards and Trade Agreements and a Framework for Integrating Environment Standards and Trade Agreements. The government is interested in views on how New Zealand could pursue the objectives contained in these Frameworks in the context of FTA negotiations with ASEAN.
As in negotiations for other closer economic partnerships, New Zealand will seek a provision, which gives New Zealand governments scope to implement policies related to Maori, including in fulfilment of obligations under the Treaty of Waitangi, without being constrained by other provisions in the agreement.
The Government is interested in your views on the Free Trade Agreement between ASEAN and Australia and New Zealand. In particular you may wish to consider the following questions:
Note: Where relevant, it would be helpful to learn from you the products or services your business is already exporting to ASEAN, in the case of goods their tariff classification and the tariffs you are paying, any other specific barriers you face, and the products or services you would consider exporting to ASEAN if tariff or non-tariff barriers were addressed.
If you have any questions or comments about this process, please email them to ftam@mfat.govt.nz identifying "ASEAN-Australia-New Zealand FTA" in the subject line, or send them to:
ASEAN-Australia/New Zealand FTA (FTAM)
Ministry of Foreign Affairs and Trade
Private Bag 18 901
Wellington
If you require any assistance or have any questions on the submission process, please contact Peter Martin - tel: +64 4 439 8084.
Consultation will continue throughout the negotiations.
