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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