ASEAN-Australia-New Zealand Free Trade Area Agreement: ASEAN's response to global financial crisis
Tacloban City (February 28) -- Against the backdrop of the 14th ASEAN Summit, the ASEAN and Australia and New Zealand Economic Ministers signed on February 27, the landmark 12-country Agreement Establishing ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) Agreement.
Signed at Cha-am, Phetchaburi, Thailand at a time of widespread concern about the global economy and world economic growth, the AANZFTA agreement is regarded as an integral part of the Region's response to the global financial crisis.
In a joint media statement on the signing of the AANZFTA Agreement, the ASEAN ministers expressed their confidence that the Agreement will not only provide a solid platform for ASEAN, Australia and New Zealand to work together towards sustainable growth and development strengthening regional economic integration, but also serves as a building block for the World Trade Organization Doha Development Agenda and a stronger multilateral trading system.
Through the AANZFTA Agreement, ASEAN, Australia and New Zealand effectively create a free trade area of over 600 million people with a combined GDP of US$ 2.3 trillion (based on IMF 2007 figures), which is expected to have reached US$ 2.7 trillion, according to the IMF forecast for 2008. Intra-regional (ASEAN, Australia and New Zealand) trade has been growing an average of about 16 per cent per annum since the start of the FTA negotiations in 2005. The Ministers noted the increase in Australian and New Zealand investments to ASEAN which reached US$ 1.1 billion in 2007.
With the liberalization of barriers to trade and investment under the AANZFTA Agreement, the Ministers expressed confidence regarding the further growth and expansion of intra-regional trade and investment.
Taken together, Australia and New Zealand comprise ASEAN's sixth largest trading partner. ASEAN as a group is the second and the third largest trading partner of Australia and New Zealand, respectively.
The AANZFTA Agreement is the first region-to-region free trade agreement for both ASEAN and, Australia and New Zealand.
It is ASEAN's fourth free trade agreement with dialogue partners after China, Korea and Japan, and it is the first that Australia and New Zealand have jointly negotiated with other countries.
The AANZFTA Agreement is the single most ambitious undertaking made by ASEAN since expanding its outward-looking economic regime to include region-to-region free trade agreements with major trading partners.
Comprising eighteen substantive Chapters, with schedules of specific commitments annexed, the AANZFTA Agreement covers trade in goods, services (including financial and telecommunications services), electronic commerce, movement of natural persons, investment, a dispute settlement mechanism as well as specific provisions in other areas, such as, Sanitary and Phytosanitary (SPS) Measures, Standards, Technical Regulations and Conformity Assessment Procedures, Intellectual Property and Competition.
The AANZFTA Agreement also includes a chapter on Economic Cooperation which provides a framework for trade and investment-related cooperation. This has been given practical effect through signature of an Implementing Arrangement for a five-year Economic Cooperation Work Programme to support implementation of the AANZFTA Agreement across the region.
The AANZFTA Agreement opens a plethora of new opportunities for businesses located in the region. In addition to new market access, the Agreement provides greater transparency and certainty for companies doing business in the region.
Through its various review provisions, the agreement will also remain a 'living' document that will continue to have ongoing commercial relevance. The Ministers encouraged businesses and investors to take advantage of these opportunities and realize the full potential of the AANZFTA Agreement. The Ministers also considered the AANZFTA Agreement to be a key catalyst for enhanced and accelerated regional integration - not only in East Asia but the Asia-Pacific region as well.
The AANZFTA Agreement will enter into force sixty (60) days after Australia and New Zealand, and at least four (4) ASEAN Member States have notified completion of their ratification processes. (PIA 8) [top]