Historic Free Trade Agreement Begins Today

The most significant Free Trade Agreement (FTA) in Australia's history, the Australian - United States FTA comes into force as from today, January 1 and the enormous benefits to exporters will flow through immediately according to Trade Minister Mark Vaile.

"This FTA is worth billions of dollars to the economy and will create thousands of jobs", Mr Vaile said.

An economic analysis undertaken by the Centre for International Economics earlier this year determined that a decade after coming into force the AUSFTA will result in an annual boost to the Australian economy of $6 billion.

Other key findings from the study included:

Over the first 20 years of the agreement, the present value of the benefit to the Australian economy exceeds $57 billion.
Over 30,000 jobs will be created and real wages will rise.
All states and territories will be better off.
The FTA will have no material impact on the price of drugs.

"Many critics said Australia would never get to this point but years of hard work have paid off. This agreement demonstrates the government's commitment to opening markets for Australian exporters. More trade means a stronger economy and new jobs."

More than 97 percent of non-agricultural exports (excluding textiles and clothing) to the United States will be duty free from today. The FTA also delivers improved access for Australian agriculture, with around two thirds of agricultural tariff lines going to zero from today, and a further nine percent cut to zero within four years. The FTA gives Australian companies full access for the first time to the $200 billion federal government procurement market.

"Austrade has identified industry sectors such as automotive parts, seafood, dairy and meat, doughs and grains, confectionery, jewellery and cut flowers as offering immediate opportunities," Mr Vaile said.

"A 25 percent US tariff on light commercial vehicles is removed today, as are tariffs on auto parts, all metals and minerals, and canned tuna. There is an increased quota this year for dairy products and beef quotas start rising in 2006. There are also exciting opportunities in the US Government procurement market in areas such as information and communications technology, homeland security and biotechnology".

Minister Vaile urged exporters to take advantage of new opportunities, "Austrade and the Department of Foreign Affairs and Trade stand ready to help new exporters break into these markets and existing exporters to increase their market share".

Austrade will appoint 30 new export facilitators to help Australian exporters take advantage of opportunities arising from the Australia-US Free Trade Agreement.

Contact: Mr Vaile's office 02 6277 7420 - DFAT Media Liaison�� 02 6261 1555

Attachment:

"I am not sure whether either of our countries has fully grasped the impact the FTA will have on our economic relationship.

In the future our two economies will increasingly be linked together and the expansion of our respective markets will create jobs and prosperity that will allow both of us to compete better in the world. The consequences of what we have done will be huge.

What Australian entrepreneurs now have as a result of the Free Trade Agreement is free access not only to the 20 million people who live here but to the 320 million people who live in our two countries. And finding a niche in a market of 320 million is a whole lot easier than finding a niche in a market of 20 million. Fifty years from now people will look back on the impact of this FTA and wonder why anyone ever opposed it. This FTA will have a greater impact on our relationship than anything we have done since the signing of the ANZUS Treaty in 1951".

J. Thomas Schieffer - U.S. Ambassador to Australia (National Press Club 15/12/2004)

INDUSTRY REACTION

Government Procurement

"Today, for the first time Australian companies will have access to the largest consumer, in the largest market in the world - the US government via the General Services Administration's (GSA) Schedule contracts. These contracts had $25 billion US in sales last year with $2 million a day ordered online via credit card by more than 235,000 purchasing officials. The best of Australian technology can now be listed on these contracts which are not subject to dollar limits on orders, or tendering - an unprecedented exporting opportunity."

Robert Bugge - Managing Director Australian GSA Schedules Pty Ltd

Dairy

"From today, the US FTA will provide a threefold increase in the amount of Australian dairy sold into the lucrative US market. Opening a crack in the wall of protection around the US dairy market has been a dream of Australian dairy farmers for decades . . . from today that dream starts to become a reality."

Allan Burgess - President, Australian Dairy Farmers Limited

Automative

" Holden welcomes the commencement of the AUSFTA today, From an Australian perspective, we believe it will provide the best possible opportunity for Australian carmakers and component manufacturers seeking to export to the United States. The agreement will foster closer relations with the United States and provide increased opportunities for both countries".

Holden Chairman and Managing Director, Denny Moore. Contact: Jason Laird

Seafood

"The seafood industry is fortunate to have won total abolition of American tariffs from New Year's Day. This will be a huge encouragement to gain better access to a US$34 billion seafood market. Benefits to our industry will amount to tens of millions of dollars in the first year. The industry welcomes this important agreement".

Russ Neal CEO - Australian Seafood Industry Council

Canned Tuna

''As from today, and for the first time, the company will be able to compete in the U.S. with the potential to boost its turnover by up to 50 per cent and create 70 new jobs for Port Lincoln in the first year alone"

Jacquie Field - Chief Financial Officer Port Lincoln Tuna Processors

Beef

"January 1, 2005 marks the beginning of a whole new era for Australia's beef producers. Australia is already the largest exporter of beef to the US but from today our in-quota beef will go into the US tariff-free saving around $22 million annually ... and in years to come our farmers can now look forward to increasing their access to the largest beef consuming market in the world".

Peter Barnard - General Manager, Economic Planning and Market Services, Meat and Livestock Australia