Five potential Australia free trade agreements (FTA) for 2017

The government is currently working on negotiations to deliver five new Australia Free Trade Agreements (FTAs). This includes the following:

• The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA)
• The Australia-Hong Kong FTA (A-HFTA)
• An Australia-EU Free Trade Agreement (A-EU FTA)
• The Australia-Peru FTA
• Australia-India Comprehensive Economic Cooperation Agreement (AI-CECA)

Potentially new Australia Free Trade Agreements for 2017

Learn more about these Australia Free Trade Agreements (FTA’s) in this article:

The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA)

26 May 2017 – The 7th round of the IA-CEPA was held in Australia. Here, both countries declared an affirmative response that the FTA rounds will be soon completed by the end of the year.
Three early outcomes were finalised in the meeting which includes:

• Food and drug standardisation
• Herbal products
• Mapping of standards

The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) Finalised Points

However, the following points are still being reviewed:

• Exchange of skilled workers
• Partnership in food security, particularly meat and beef;
• Financial services
• Recommendations on the Indonesia-Australia Business Partnership

The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) pending review

Trade facilitations such as investments, electronic trade, business competition and institutional framework provisions were also included in the discussion.

“If in the previous round we were still on the level of sharing respective thoughts on the matters, in this round, the discussion is getting more conical and focusing about the agreement text content and negotiations about the market access,” added Deddy Saleh, a representative of the Indonesian delegate at the partnership forum as published in one of the articles of Indonesia Expat.

The Australia and Indonesia trading relationships

Data from the Central Statistics Agency and the Trade Ministry showed that two-way trade between Indonesia and Australia was worth US 10.2 billion in 2012. However this has declined to $8.46 billion in 2016, partly because of exchange-rate fluctuations.

Last year, imports of Australia into Indonesia were valued at $5.26 billion compared to the $3.2 billion worth of exports of Indonesia in 2016.

The Australia-Hong Kong FTA (A-HFTA)

16 May 2017, Australia and Hong Kong finally launched negotiations for a free trade agreement. Through this, Australia aims to discuss:

• Digital trade (e.g. e-commerce)
• Protection of intellectual property
• Temporary entry of business people
• Government procurement Competition policy

Exporters are expected to benefit from it as it aims to continue Hong Kong’s zero tariff levels on Australian goods exports. As for service suppliers, Australia is seeking to:

• Secure non-discriminatory access to the Hong Kong market
• Create greater regulatory certainty
• Automatically capture future unilateral liberalisation

Australia-Hong Kong Free Trade Agreement advantages

The Hong Kong and Australia free trade agreements and trading relationships

Hong Kong is a global financial and business centre. It is home to some of the largest investors in the Australian economy. Thus, it serves as the international springboard for mainland Chinese companies with a mandate to invest overseas.

The average imports from Hong Kong is estimated to be at A$4,044 million while exports to it reaches A$11,262 million.

Australia-Hong Kong trade relationships

An Australia-EU Free Trade Agreement (A-EU FTA)

April 2017 – The European Union (EU) and Australia ended preparatory work in April 2017 for potential trade negotiations. However, uncertainties going-on in EU, such as the Brexit and recent election in France and UK, continuous talk about A-EU was stalled. Nevertheless, discussion is expected to resume on November.

These are the following major points within the A-EU FTA:

• Help to ensure our trade and investment relationship reaches its full potential
• Remove barriers to trade in goods
• Expand services linkages and investment ties
• Enhance regulatory cooperation in specific sectors of interest to business

EU and Australia Free Trade Agreements benefits and interests

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The EU and Australia free trade agreements and trading relationships

EU is the largest investor in Australia, which is 13 times larger than China. Interestingly, it is also the second largest destination after the US for Australian investment abroad. It also accounts to half of Australia’s service exports.

EU companies supply commercial services worth nearly $28 billion to Australia and hold investment in the country worth more than $200 billion. It also exports vehicles and machinery but it is also registered as a trade surplus in the agri-food sector.

The Australia-Peru FTA

Peru is part of the Trans Pacific Partnership Agreement amongst Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. However with the US leaving TPP, news of the TPP disintegrating pushed both Australia and Peru to have their own FTA.

In one of the statements of Australian Deputy Prime Minister and Minister for Agriculture and Water Resources, Barnaby Joyce published in the Fresh Fruit Portal.

“A Free Trade Agree (FTA) with Peru will ensure that Australian farmers have the opportunity to share in Latin America’s economic growth and be on an even footing with our competitors.”

At present, Australia’s agricultural exports to Peru, such as beef, horticulture and wine, face high tariff rates. which is not applied to other competitors including the US, EU and Canada, which have FTA’s with Peru. Through this, Australia is optimistic it will greatly help leverage the playing field amongst its other competitors such as US, EU and Canada – all of which have existing FTA’s with Peru.

The Australia-Peru FTA addresses existing tariff barriers and customs procedures that will aim to ensure that goods trade with Peru operates as smoothly and simply as possible.

Services suppliers will also benefit as the Australian government seek further opportunities for Australian suppliers in sectors such as professional services, energy and mining-related services, environmental services, construction services, and transport services.

The Peru and Australia free trade agreements and trading relationships

Peru is one of the fastest growing economy in Latin America. It is also a growing market for Australian exporters. A two-way trade in goods and services between these two countries reached $504million for the fiscal year 2015 to 2016. This is up 19.4% from the previous year.

Australia-India Comprehensive Economic Cooperation Agreement (AI-CECA)

The Australia-India Comprehensive Economic Cooperation Agreement has been put into the table on 2014. Since then, it has made very little progress with the following points left to be agreed upon:

• Australia wanted India to significantly lower or eliminate tariffs on several agricultural and industrial goods
• New Delhi asked Canberra to ease rules on temporary movement of skilled professionals and intra-company transfers

With Malcolm Turnbull’s visit last April, both countries have instilled a new dynamism between these two countries and saw potential in their trade and investment relations. However, the resumption of the discussion still remains to be announced.

The following is the list of sectors the Australian Trade Commission wishes to include in the AI-CECA  specific strategies:

• Resources
• Mining & Energy
• Infrastructure
• Building & Construction
• Food & Beverage
• Agri Business
• ICT
• Film, Media & Entertainment
• Retail
• Financial Services

Australia-India Comprehensive Economic Cooperation Agreement affected industries

The India and Australia free trade agreements and trade relationship

As of the 2015-16 financial year, India was Australia’s tenth largest trading partner. It accounts for almost A$18 billion in two-way trade and is almost 3% of total Australian trade flows. Australia’s leading merchandise exports include coal, gold, copper ore, wool, and horticulture.

Australian products transported into India

With this list of free trade agreements, Australia is optimistic it will have a better, more productive and smoother trading relationships amongst Hong Kong, Indonesia, EU, Peru and India.

Do you need your goods transported to and from Indonesia, Hong Kong, EU, Peru, India and Australia? Send us a message. We are happy to help you with any Australia free trade agreements.