Impact on the Australian Capital Territory for trade in goods and services

Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA)

17 November 2010

1. Trade in goods

Australian Capital Territory merchandise exports to the world (calendar year 2009): $9 million. Principal exports:

  • Arms and ammunition $2.4 million
  • Artwork and antiques $2.0 million
  • Gold coin and legal tender coin $1.1 million
  • Mechanical handling equipment and parts $0.8 million
  • Heating and cooling equipmentand parts $0.8 million
  • Optical instruments $0.1 million
  • Confidential Items of trade $2.2 million

The following analysis summarises tariff outcomes under the Agreement Establishing the ASEAN-Australia-New Zealand FTA (AANZFTA) for Indonesia, Malaysia, the Philippines and Vietnam for some of the Australian Capital Territory' principal exports. These are the four largest AANZFTA markets with which Australia does not already have a bilateral FTA.

It should be noted that the Australian Capital Territory' trade is dominated by services and that exports of goods are very small. Given the small size of trade, this fact sheet uses the Australian Capital Territory' merchandise exports to the world rather than ASEAN.

The tariff outcomes in AANZFTA on the type of products that the Australian Capital Territory has exported in recent years include:

Measuring and Analysing Instruments

  • The elimination of all 5% tariffs and binding of all 0% tariffs from entry-into-force on exports to Indonesia of measuring and analysing instruments (9015, 9023, 9024, 9027). 1
  • The elimination of all 5% tariffs and binding of all 0% tariffs from 1 January 2010 on exports to Malaysia.
  • The elimination of all 1% and 3% tariffs and binding of all 0% tariffs from 1 January 2010 on exports to the Philippines.
  • The binding of 0% tariffs from 1 January 2010 on exports to Vietnam.

Gold Coin and Legal Tender Coin

  • The elimination of all 5% tariffs to and binding of all 0% tariffs from entry-into-force on exports to Indonesia of gold coin and legal tender coin (7118.90).
  • The elimination of all 5% tariffs and binding of all 0% tariffs from 1 January 2010 on exports to Malaysia.
  • The reduction of 10% tariffs to 5% from 1 January 2010 phasing down to 0% by 2012 on exports to the Philippines.
  • The reduction of 40% tariffs to 35% from 1 January 2010 phasing down to 0% by 2018 on exports to Vietnam.

Optical Instruments

  • The elimination and binding of 5% tariffs to 0% from entry-into-force on exports to Indonesia of optical instruments (9013).
  • The elimination and binding of 3% tariffs to 0% from 1 January 2010 on exports to the Philippines.
  • The binding of 0% tariffs from 1 January 2010 on exports to Malaysia and Vietnam.

Heating and Cooling Equipment and Parts

  • The elimination and binding of a 1% tariff to 0% from 1 January 2010 on exports to the Philippines of heating and cooling equipment and parts (8514.40).
  • The binding of 0% tariffs from 1 January 2010 on exports to Indonesia, Malaysia and Vietnam.

2. Trade in services opportunities for the Australian Capital Territory

Services exporters in the Australian Capital Territory are in a strong position to access the growing services markets in ASEAN. Exports of services to the world, which were worth $1 billion in 2009, account for 99 per cent of the Territory' total exports.

  • Among the largest sectors are government and education-related travel services, valued at $439 million and $292 million, or 42% and 28% of services exports, respectively.
  • Statistics are not available on the percentage of the Territory' services exports that go to ASEAN. However ASEAN accounts for 15% of Australia' services exports.

Under AANZFTA, ASEAN countries have made substantial, commercially meaningful improvements on existing WTO commitments in a range of services sectors – including education and professional services – where ACT providers have strong capabilities. For example:

  • Vietnam has committed to reduce the experience requirement for Australian teachers in higher, secondary and other education services (including foreign language training) from five to three years and to expand from 5 to 36 the (WTO-committed) fields of study that can be delivered by foreign providers.
  • Malaysia has committed to allow joint ventures in higher education with foreign equity up to 51 per cent, subject to relevance of courses to Malaysia' education objectives. It has also committed to allow temporary entry and stay of lecturers and experts and professionals (subject to numerical caps) and contractual service suppliers in the education sector for periods of stay of up to 10 years.
  • The Philippines has bound arrangements under which Australian accountants, landscape architects and civil, mechanical metallurgical and sanitary engineers can practice under temporary permits from its Professional Regulation Commission.
  • Indonesia has committed to permit foreign lawyers to work or take part in Indonesian law firms (up to 5 foreign lawyers per firm with an upper limit of 20 per cent) as employees or experts in international law.
  • Vietnam has bound arrangements under which foreign law firms can employ Vietnamese lawyers and foreign lawyers can practice in Vietnamese law firms to advise on foreign/international law.
  • A built-in review provision will ensure that further improvements can be negotiated over time, as the ASEAN countries progressively liberalise their services sectors.

1 These are the four digit heading or the six digit sub-heading of the tariff system for goods that the Australian Capital Territory has exported to the world in recent years.

Last Updated: 10 December 2010