Asean-Australia-NZ Free Trade Agreement

Country200520102013Final Tariff Elimination
percent of base period imports duty-free
Brunei93.293.89699.7
Indonesia6781.385.493.4
Malaysia87.890.99696.9
Philippines4.365.975.892
Singapore99.9100100100
Thailand5087.288.498.5
Vietnam19.819.819.896.8
Extract from Overview of tariff outcomes: AANZFTA

Some limits to trade liberalization in the Agreement that are obvious on first reading include a Balance of Payments Safeguard provision that would allow re-introduction of border protection, including quotas (although ASEAN countries have some of the strongest external positions in the world right now!). The ambition is also limited in the area of ‘GATT-plus’ provisions on e.g. harmonized competition policy (the Chapter is brief and empty of obligation). There are provisions for ‘consultation’ and obligations to respond to requests for information on Quarantine matters—the most serious cause of trade contention between Australia and it’s regional partners—but this is hardly a guarantee against increased Australian protection or (at best) glacial incrementalism in opening protected food markets.

The agreement also contains an apparently complex, dual ‘rule of origin‘ provision: a ‘co-equal’ provision is the spin that the negotiators have put on it. This looks like the negotiating committee’s compromise ‘horse’ (i.e. a camel). It will allow exporters, in most cases, to choose between seeking a determination of origin based on a Change of Tariff Heading (CTH) rule or on the existing ASEAN ‘regional content value’ rule. Yuk! Worst aspect: the origin must be documented by the appropriate ‘industry association’ (this is an anomalous provision in ROO given modern customs processing and risk evaluation procedures). Best aspect: regional ‘cumulation’ of origin so that imported goods that are inputs to the production of a manufacture in any regional country acquire the origin of that country when exported. Cumulation is essential for the development of regional production chains where duties are still a barrier.

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