ASEAN-Australia-New Zealand FTA
Subscriber Update
Update 11 – December 2006
Special Meeting of AANZFTA
A special meeting of the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) trade negotiating committee took place in Singapore from 29-30 November 2006.
The meeting focused on the principles to guide market access negotiations for goods, services and investment.
Overall, useful progress was made in the negotiations on tariffs, rules of origin, services, investment and legal and institutional issues.
On goods, negotiators are close to agreeing on the principles to guide tariff negotiations, using a two-track (‘normal’ and ‘sensitive’) approach. Tariffs on goods covered by the normal track will be eliminated over an agreed timeframe (still subject to negotiation). Tariff eliminations and reductions on goods covered by the sensitive track will be phased in over longer time periods. Indicative lists of sensitive goods have been exchanged by ASEAN countries, Australia and New Zealand. Australia is seeking to have tariffs on as many goods as possible, including sensitive goods, eventually eliminated. It is expected that initial tariff offers will be exchanged in early 2007 and this will be followed by detailed market access negotiations.
The working group on rules of origin made good progress on developing greater understanding of the need for, and in starting to develop, product‑specific rules of origin. While much work remains to be done in what is a labour-intensive process, an encouraging start has been made. The group also made further progress on the draft chapter text.
Services negotiation gained momentum following Australia’s conditional agreement to a positive list approach. A “positive list” approach means that certain obligations, such as market access and national treatment, only apply to services and service suppliers to the extent that a Party makes a specific commitment to this effect in its schedule. Australia agreed to this approach on the condition that ASEAN agrees to transition to a ‘negative list’ at a later date as part of the review of the agreement. A “negative list” approach means that a Party is required to apply certain obligations of the chapter, such as market access and national treatment, to all services and services suppliers, unless it makes a reservation. Progress was made on moving to a single consolidated draft text for the services chapter.
While much work remains to be done, steady progress was also made in the investment negotiations. Discussion focused on narrowing differences on the approach to scheduling investment commitments (scheduling involves detailing agreed investment liberalisation measures) and consolidating the draft investment chapter text. However, lack of agreement over the approach to scheduling commitments remains a major drag on progress towards substantive market access negotiations.
The special meeting also agreed to a meeting schedule for AANZFTA negotiating rounds in 2007. The next meeting is scheduled to take place in Wellington between 4-9 March. While ASEAN countries have reiterated a desire to conclude negotiations by around the end of 2007, Australia continues to emphasise the importance of developing a free trade agreement which will have commercially meaningful outcomes for Australian business.
More information on the ASEAN-Australia-New Zealand FTA