Securing trade agreements for Australia’s future
Update on the Australian Government's ambitious trade negotiating agenda.
Minister for Trade, Tourism and Investment Steven Ciobo launched new free trade agreement negotiations with Hong Kong and Peru in May, and negotiations with Pacific Alliance countries in early July.
Hong Kong is not only a major export market for goods and services, but a valuable source of investment. Australia is seeking a modern FTA with Hong Kong, focused on securing access for our services exports. As our seventh largest services market, worth $2.5 billion in 2016, Australia's services export industries, including legal and financial services, as well as education and transport services, will benefit from the even greater certainty we expect an FTA to bring. An FTA with Hong Kong will also complement our existing FTA with China, and deepen our economic integration in Asia. You can read more about these negotiations on page 21.
Over the last decade, Peru has been one of the fastest growing economies in Latin America, and the world. An FTA with Peru will help Australian exporters compete with other exporters like the US, the EU and Canada, who already have preferential access to this growing market. It will provide another gateway to the Latin American market and enable Australian businesses to tap into value chains between the Americas and Asia. An FTA with Peru will also be a step towards capturing the benefits of the Trans-Pacific Partnership.
Free trade agreement negotiations between Australia and the Pacific Alliance – the Latin American trading bloc made up of Mexico, Chile, Peru and Colombia – were launched in July. An FTA with the Pacific Alliance will create new export opportunities for Australian farmers, miners, manufacturers, educators, service providers and investors in some of Latin America's major economies. Importantly, this FTA will open the door to Mexico for Australian exporters. The Pacific Alliance is a significant trade bloc. Its GDP was worth more than USD $1.8 trillion in 2016 and the four countries account for 38 per cent of Latin America's population and 57 per cent of its total imports. Pacific Alliance members imported goods and services worth more than USD $600 billion in 2016.
Australia and the EU concluded a joint FTA scoping exercise in April, with the launch of formal negotiations expected later this year. The European Union is Australia's second largest market, behind China, for services exports ($10.5 billion in 2016), with total two-way trade valued at $29 billion. The potential to improve our services trade with the EU is also substantial, and the Australian Government is committed to maximising our access to this sizeable market. Australia is also in separate talks with the UK to prepare the ground for a future FTA, once the UK has exited the EU. The UK is Australia's fourth largest individual market for services exports, driven by strong tourism links and a developed market in professional, technical and other business services.
For Australia, better servcies access across the EU – where rules currently vary across Member States – would assist our education, professional, distribution, transport, energy and mining-related service suppliers in particular. There is also the potential to improve the mutual recognition of qualifications, streamline licensing requirements and improve transparency.
These new and prospective FTA negotiations are in addition to Australia's ongoing bilateral, regional and multi country initiatives that include the Regional Comprehensive Economic Partnership and the Trade in Services Agreement negotiations. For more information go to www.dfat.gov.au/fta