Australia’s Trade Agreements with ASEAN John Ravenhill Presentation to Canadian International Council Workshop on “Power Shifts and Vibrant Economies” Ottawa, 25 November 2014

AANZFTA Significance Largest plurilateral agreement Aus signed outside WTO Largest FTA Aus has negotiated First time Aus jointly negotiated with another country For ASEAN, the most comprehensive of its “Plus One” agreements

AANZFTA Provisions (1) Merchandise Trade: Bound vast majority ASEAN tariffs to 2005 applied rates (significantly below WTO bindings) Tariff elimination on 90 – 100 % tariff lines over time (e.g., sensitive products in Malaysia not until 2017 that reduced to 5%; for Laos, removal not until 2023). Aus. retains tariffs on some textiles until NZ government estimates by 2015, 75% of its exports will enter ASEAN duty free. Regional accumulation for satisfying rules of origin Safeguard if imports “cause or threaten to cause serious injury”

AANZFTA Provisions (2) Services “Modest”: standstill on existing levels of protection. Some WTO Plus commitments on professional services, education, financial services and telecommunications Framework for future negotiations

AANZFTA Provisions (3) Investment transparency provisions cover measures such as minimum standards of procedural transparency; rights of review of administrative decisions Investor-state dispute settlement mechanisms created

AANZFTA Provisions (4) Intellectual Property Largely reiterates obligations under TRIPs Agreement

AANZFTA Provisions (5) Economic Cooperation Australia commits $20 million over five year period for technical assistance and capacity building to enable developing ASEAN economies to implement FTA

Has AANZFTA Made a Difference? In aggregate economic welfare, a priori: – Tariffs already low – Australia already had bilateral agreements with Singapore and Thailand; subsequently concluded with Malaysia; negotiating with Indonesia. – Long phase-in for sensitive products – Agreement relatively weak on services, etc. – Effects likely to be swamped by other factors.

Value of Australia Dollar (in US dollars)

Australia’s Principal Exports to ASEAN ($A m) 1.Educational Services$ Crude Petroleum$ Wheat$ Gold$ Aluminium$987

ASEAN Exports to Australia Petroleum (40%) Motor Vehicles (10%)

Aus X Merchandise to ASEAN , ASEAN Share of Aus X Merchandise Aus X Services to ASEAN77948, ASEAN Share of Aus X Services Aus Merchandise M from ASEAN , ASEAN share Aus Merchandise M Aus Services M from ASEAN983211, ASEAN share Aus Services M

AANZFTA: A Balance Sheet ASEAN is an FTA not a customs union ASEAN Secretariat not empowered to negotiate In effect, 10 bilateral negotiations, 10 bilateral treaties Potentially can gain more, economically, from bilaterals with the most important ASEAN economies: Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam But…

The importance of the symbolic dimension Recognition of ASEAN centrality in Asia-Pacific regionalism Comprehensive, ongoing engagement with ASEAN as a regional organization Opens door for Australian participation in RCEP