ASEAN-Australia-New Zealand FTA
Subscriber Update
Update 13 - June 2007
Ninth Round of Negotiations
The 9th meeting of the ASEAN-Australia-New Zealand Free Trade Agreement (FTA) trade negotiating committee took place in Palembang, Indonesia from 30 May - 2 June 2007.
The meeting focused on the detailed working group discussions needed to progress tariff, services and investment modalities, and economic cooperation.
Overall, reasonable progress was made across most of the negotiating agenda. However, the round also highlighted the obstacles to be overcome if we are to achieve a comprehensive FTA that is commercially credible. Australia’s objectives were further advanced in bilateral meetings with each ASEAN country where we continued our bilateral dialogue on respective market access interests.
On goods, negotiations on tariff modalities for the ASEAN6* and Australia and New Zealand (A-NZ) are progressing, but we were not able to finalise these at the Palembang meeting as originally expected. Parties have agreed to exchange tariff request lists at the next negotiating round, as well as to try to finalise tariff modalities. They will also determine the process and timeline for exchanging initial tariff offers. We are yet to discuss in detail the tariff modalities for Cambodia, Laos, Myanmar and Vietnam (CLMV).
An initial discussion on a draft chapter on Trade in Goods revealed a common set of objectives by Australia, New Zealand and ASEAN. Further progress was made on the texts of chapters covering customs procedures, sanitary and phytosanitary (SPS) measures, and standards, technical regulations and conformity assessment (TBT).
The working group on rules of origin continues to make progress on the consideration of product-specific rules. Good progress was also made on clearing up outstanding issues, including reaching an agreement on a way forward on the issue of certification. However, much work remains to be done, in what is a labour-intensive process.
Negotiations on services made useful progress, with good engagement by ASEAN on the general and financial services text, and the introduction by the Philippines of a counter-text on movement of natural persons (MNP), including mutual recognition (however, this alternate text has not been agreed with ASEAN). We continued to press for greater ASEAN engagement on our text on telecommunications and electronic commerce. Most countries reconfirmed their commitment to exchange market access offers by the end of June. We continued to press, in bilateral meetings, for a “substantial improvement” on WTO commitments by the ASEAN6, stressing that in terms of breadth of coverage – which is one indicator of quality, along with depth and commercial relevance – their offers should at least be in the “ballpark” of the GATS commitments made by Vietnam and Cambodia.
On investment, it was agreed that draft offers would be exchanged by July or September at the latest for Australia, New Zealand, the ASEAN6 and any other ASEAN country that is able to do so. These offers will follow an agreed template based on the “two annex” negative list approach to scheduling (the so-called “Wellington approach”). We also handed over to each ASEAN country Australia’s indicative interests in investment in non-services sectors at separate bilateral meetings.
Economic cooperation negotiations made rapid progress, with ASEAN accepting the model proposed by Australia and New Zealand. This model centres on agreeing a finite number of concrete cooperation activities as part of the overall FTA package.
There was constructive discussion on legal and institutional issues, and steady progress was made in tidying up the dispute settlement chapter. Intellectual property took a small step forward with some ASEAN countries providing a substantive response to the draft A-NZ text tabled last year. However, ASEAN is yet to engage on government procurement and competition policy. Australia and New Zealand will be submitting a joint proposal on government procurement for consideration at the next round. Vietnam continued to push for a separate chapter on special and differential treatment (S&D) in the FTA. A-NZ’s position remained that S&D would be more effectively addressed through operational provisions in the individual subject chapters as well as through appropriate general principles in the preamble of the FTA.
The next meeting is scheduled to take place in Perth from 30 July - 4 August 2007. We have agreed with ASEAN and New Zealand to commit to trying to conclude substantive negotiations by the end of 2007. This tight timeframe combined with the range of outstanding issues underline the need for substantial progress at the next round.
* Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand.
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