Address at the Trans Tasman Business Circle Luncheon
Sydney
Speech (check against delivery)
30 June 2010
Introduction
Firstly, I would like to thank the Trans Tasman Business Circle for inviting me to address its members on the ASEAN market and opportunities for Australian and New Zealand companies.
It is also my great pleasure to welcome Tim Groser, New Zealand’s Minister of Trade. The Minister joined us today as a most valued participant at the Ministerial Council on International Trade.
Two years ago, the leaders of both our countries agreed to pursue greater cooperation in trade and investment.
And earlier this year, the Australian Trade Commission – Austrade – and New Zealand’s Trade & Enterprise, agreed on an Action Agenda for Closer Co-operation. The purpose of this Action Agenda is to expand our strategic interests internationally, accelerate progress towards a single economic market, and reduce costs for businesses in both our countries.
We are exploring how we can expand joint promotion activities to increase global market shares for the trans-Tasman economy as a whole.
We are looking at joint approaches to third markets and the potential benefits of projecting our combined commercial capabilities.
We are working on joint efforts to resolve certain market access and behind-the- border issues in third markets.
And we are building build critical mass for selected offshore promotions, adding value to inward investment promotions, and facilitating cross-representation or co- location of Austrade and New Zealand Trade & Enterprise offices in selected markets.
We are also working together to leverage the benefits of our jointly negotiated ASEAN-Australia-New Zealand Free Trade Agreement.
And we would like, over time, to better align our respective Free Trade Agreement interests and negotiating influence.
Closer co-operation between our two countries
The Closer Economic Relations Agreement between Australia and New Zealand, which was signed in 1983, was Australia’s first FTA – and it remains one of our most open and successful.
It is still the Free Trade Agreement which underpins the mutually beneficial expansion in two-way trade and investment between our two countries. Our Action Agenda for Closer Co-operation goes one step further.
We have already taken many steps to make business transactions between our two countries easier – for example, by cutting red tape so that we can both export our products duty-free across the Tasman.
Amendments to simplify the Rules of Origin under the Australia-New Zealand Closer Economic Relations Trade Agreement were tabled in Parliament just this month.
These are changes which make it easier for businesses to benefit from the unique relationship between Australia and New Zealand.
Indeed, this simplification represents an opportunity for local businesses, and the Australian Government is happy to work with companies to ensure that they take advantage of the changes.
New Zealand is a critically important market for Australia: one of the top ten export markets for Australian goods and services, worth $11.1 billion in 2009.
New Zealand is also one of our top ten two-way trading partners, with over $20 billion of trade transacted last year.
And investment between our two countries is also on a significant scale. Australia had investments worth $66.1 billion in New Zealand in 2008, and New Zealand had investments worth $27 billion here in Australia.
There’s more. Australia was New Zealand’s principal export destination last year, making up over 23 per cent of all exports, as well as the highest provider of imports into New Zealand, at over 18 per cent.
So there’s a lot going on in trade and investment between our two countries. AANZFTA – an area for co-operation Australia and New Zealand’s latest Free Trade Agreement with ASEAN heralds a new era of co-operation between our two countries and the region.
Known as AANZFTA, it marks the first time that our two countries have together negotiated a Free Trade Agreement with other nations.
AANZFTA, which came into effect on January 1st this year, links the economies of Australia and New Zealand with those of the ten nations of ASEAN, which make up one of the most dynamic economic regions in the world.
ASEAN is not only a massive market but a very important one for Australia and New In 2009, Australia’s exports to ASEAN countries topped $19.5 billion. And our imports were more than $39 billion.
AANZFTA also marks an historic milestone in strengthening Australia and New Zealand’s economic ties with the South-East Asian region.
It opens pathways for exporters and investors in Australia and New Zealand into one of the fastest growing economic regions in the world – a region with a combined population of 600 million people and an estimated GDP of A$3.2 trillion.
The new trade opportunities afforded by this Free Trade Agreement are significant, enabling our exporters to tap into regional supply chains and easing access into the massive market which China represents.
Close co-operation and co-ordination
A key shared understanding when AANZFTA was being negotiated was the need for closer co-operation and co-ordination between Australia and New Zealand.
While we did not always share the same priorities on specific issues, we nevertheless worked closely together to broker compromises and chart a way forward through the many difficult issues we faced with the highly diverse group of ASEAN partners.
This spirit of co-operation has continued into the implementation phase of the Free Trade Agreement.
Together, we are helping to deliver the economic co-operation component of AANZFTA and to promote business awareness about what this FTA means.
Conclusion
The ongoing engagement of business in the implementation phase of AANZFTA will be critical to its success.
We look forward to business input on issues surrounding AANZFTA and we want business views on the strategic use of economic co-operation.
International studies have demonstrated that the potential benefits of many Free Trade Agreements are never realised because of poor implementation. We are determined not to let this happen to AANZFTA.
Our combined efforts, the critical input from business, and the close co-operation between Australia’s and New Zealand’s trade and investment agencies – Austrade and New Zealand Trade & Enterprise – will make a decisive difference in the implementation and success of these important matters of trade, which affect us all.
Thank you.