ASEAN-Australia-New Zealand FTA
Subscriber Update
Update 12 – March 2007
Eighth Round of Negotiations
The 8th meeting of the ASEAN-Australia-New Zealand Free Trade Agreement (FTA) trade negotiating committee took place in Wellington from 6 - 9 March 2007.
The meeting focused on the detailed working group discussions needed to progress tariff, services and investment modalities.
Overall, there was useful momentum across most of the negotiating agenda. All parties showed flexibility on a number of issues and we are now able to identify key problem areas in various draft texts on goods, services and investment. Australia’s objectives were further advanced in bilateral meetings with each ASEAN country where we provided an indication of Australia’s market access interests in goods and services.
On goods, tariff modalities for the ASEAN6 and Australia and New Zealand (A-NZ) were significantly progressed. The tariff modalities are a set of principles to guide the preparation of initial tariff offers by all the countries involved in the FTA negotiations. There was a significant movement towards an agreed approach on tariff modalities, including the acceptance of the 90/10 split dividing all tariff lines between a normal track of 90 per cent of lines on which tariffs will be completely eliminated by an agreed date, and a sensitive track of the remaining 10 per cent of tariff lines on which tariffs will either be eliminated over a longer timeframe or subject to other commitments (e.g. tariff reduction or tariff caps). The timeframe and formula for tariff elimination and reductions on goods in both tracks are still being negotiated.
Negotiators are aiming to finalise the tariff modalities at the next negotiating round to be held in Indonesia in late May. Following this, initial tariff offers would be exchanged and would be subject to detailed requests for improvements in areas of export interest by the other countries involved. The Department of Foreign Affairs and Trade and other Departments involved will continue to closely consult with industry to identify Australia’s key tariff interests.
The working group on rules of origin continues to make good progress on the consideration of the product-specific rules, with work now largely completed on 35 chapters of the tariff code. While much work remains to be done in what is a labour-intensive process, there are encouraging signs of greater flexibility being shown in some areas by all parties.
Useful progress continues to be made in chapters on customs procedures, sanitary and phytosanitary (SPS) measures, and standards, technical regulations and conformity assessment (TBT). However, discussion on SPS was difficult, with several ASEAN countries registering a number of concerns about Australia’s SPS regime.
On services, it was agreed that, with the exception of Laos (not a WTO member), Cambodia and Vietnam (given their recent comprehensive WTO accession commitments), parties’ services commitments should be a substantial improvement on existing WTO commitments. It was also agreed that initial services offers would be exchanged at the next round at the end of May, or not later than the end of June. ASEAN engaged more fully on the broader services agenda, including on provisions regarding movement of persons, telecommunications, electronic commerce and financial services.
While much work remains to be done, steady progress was made in the investment negotiations. Considerable progress was made towards an agreed approach to scheduling investment commitments. However, some outstanding issues remain to be resolved, including on the proposed process for submitting schedules. Australia has foreshadowed bilateral meetings with each ASEAN country at the next meeting to discuss our indicative investment interests.
Economic cooperation is shaping as an important component in the overall outcome. Australia’s decision to agree to the inclusion of a separate chapter on economic cooperation was welcomed by ASEAN. Australia and New Zealand will work to develop a joint text of this chapter before the next meeting.
There was constructive discussion on legal and institutional issues, including on the dispute settlement chapter. However, ASEAN is yet to engage on intellectual property, government procurement and competition policy. Australia considers chapters on these issues to be important components of the FTA.
The next meeting is scheduled to take place in Indonesia late May/early June 2007. While ASEAN countries are keen to conclude negotiations by the end of 2007, Australia continues to stress the need to achieve a comprehensive FTA that is commercially meaningful and WTO consistent.
More information on the ASEAN-Australia-New Zealand FTA