Address to delegates ASEAN-ANZ FTA Negotiations

Speech to delegates, Melbourne.

Introduction

It is my great pleasure to welcome you to Australia to launch the first round of the negotiations to establish a Free Trade Agreement between ASEAN, Australia and New Zealand.

It is already clear that 2005 marks a watershed in Australia's trade policy.

The launch of the ASEAN-ANZ FTA negotiations is an important reason for this claim. But there are also a number of other major developments.

On the first of January I welcomed into force two of the most important bilateral trade deals Australia has concluded – the Australia-United States Free Trade Agreement and the Thailand-Australia Free Trade Agreement. Both these Agreements, as well as our long-standing CER Agreement with New Zealand and our Singapore-Australia FTA, set an important benchmark for FTAs that are high-quality and comprehensive.

All of these FTAs make it clear that regional and bilateral trade liberalisation, where it is pursued in an ambitious way, can support rather than detract from multilateral liberalisation through the WTO.

While we will negotiate free trade agreements, we do not see this as being at the expense of Australia's core commitment to the WTO and to progressing the Doha Round of trade negotiations.

The Australian Government's position on FTAs is clear: we pursue FTAs where these can deliver significant economic gains ahead of the timeframe possible in the WTO.

When it comes to selecting possible FTA negotiating partners, we look at the potential for substantial gains to flow from the agreement. The trading and investment relationship between ASEAN and Australia is strong and growing. But it has far greater potential than has been delivered to date.

With over 545 million people and a combined GDP of around US$682 billion, ASEAN offers exciting prospects for Australia. We believe that Australia, with a GDP of more than US$600 billion, offers exciting prospects for ASEAN.

In 2004, Australia's merchandise exports to ASEAN were valued at $13.8 billion – a 14 per cent increase on 2003. Australia's exports to ASEAN represent 11.7 per cent of our global exports – while ASEAN provides 16.4 per cent of our imports.

There is growth in our services trade too. In 2003-04, Australia's services exports to ASEAN increased by 5 per cent to reach $5.0 billion. This represents 14.8 per cent of our global services exports.

Our business communities are excited by the prospect of expanding our bilateral trade and commercial linkages. They will undoubtedly be pressing us to deliver real trade and investment benefits without delay.

Today, we are embarking on FTA negotiations where the level of ambition has been set at a very high standard.

It is important to remember from the outset that Leaders have instructed us to deliver a comprehensive agreement in two years that provides for full implementation within ten years. This will not be an easy task.

There will need to be regular and intensive discussions between our countries to conclude the FTA within the two-year time frame. It will be a resource intensive exercise.

That is one important reason why we must ensure that the negotiations deliver the greatest possible benefits to all of the parties. And we can take advantage of the fact that we are not starting from scratch.

The Negotiating Principles that I agreed with your Ministers in Jakarta in September last year and which were endorsed by our Leaders in Vientiane in November are important guidance for how to take forward the negotiations.

We also have the opportunity to build on the foundation that ASEAN and Australia and New Zealand have established through the AFTA-CER Closer Economic Partnership and CER-AFTA Linkage.

The ASEAN, Australia and New Zealand negotiations are unique in seating so many countries with such diverse interests around the one table.

When we come to the table, like today, we bring with us our earlier experience in hard-fought negotiations and hard-won successes.

The FTA principles we have agreed reflect these trade negotiating experiences and bind us to delivering the most trade liberalising outcome possible. This negotiation will be different to all other FTA negotiations that our countries are, or have been, involved in.

Never before has Australia embarked on FTA negotiations with so many countries. For ASEAN, this negotiation is also likely to raise some new issues. For example, you will be negotiating with two developed countries and this will offer ASEAN important opportunities in areas such as trade in services and investment.

The FTA principles commit us to delivering an FTA that will be "comprehensive" and consistent with WTO obligations. This means that no sector of trade, either goods or services, will be excluded from these negotiations and substantially all trade must be liberalised.

The principles also establish the objective of elimination of barriers to investment. And they refer to trade and investment facilitation. This can be achieved by working to create a more open and predictable business environment across a range of areas including technical standards, intellectual property, e-commerce and customs procedures.

It has been our experience from our recently concluded FTAs that the chances of reaching a satisfactory outcome from negotiations are greatly enhanced if all areas and issues are on the table from the beginning.

It may be that we finally decide to treat some issues in different ways – but we need to focus on delivering a package of outcomes which produces the greatest benefit for all of the FTA parties. Such an approach also provides an important opportunity for negotiators to balance the diverse interests of the members across goods, services and investment.

Our negotiations with Thailand are a good example of how this approach – involving a single undertaking – can work to expand the range and depth of commitments we might make. Under this FTA, we agreed that 95 per cent of all current trade between our countries would be completely free by 2010.

There is not a single product that will escape complete liberalisation under the terms of the Thailand-Australia FTA. To reach this outcome, however, both sides needed to be flexible when it came to agreeing on timeframes. Like our bilateral negotiations with Thailand, our challenge now will be to find creative and innovative ways to break through barriers and redefine our trading relationships.

Australia remains committed to delivering assistance and capacity building to countries in the region. We believe that this is an important opportunity to assist ASEAN members to engage in the negotiations with confidence and to be in a better position to implement and enforce the outcomes of the negotiations. We hope that our continued assistance will help to realise the full benefits of trade liberalisation that our FTA negotiations offer.

We now have two years to negotiate a comprehensive free trade agreement. Now it is time to grapple with those substantive issues that will produce the most trade liberalising FTA that is possible.

This is what my Ministerial counterparts and I will be looking for when we meet in September in Vientiane. We will be looking to ensure that solid progress has been made on the text of the FTA.

Twelve months after their launch of negotiations, our Leaders will also be demanding significant progress.

I thank you for your work to date and encourage you to map out an innovative approach to these FTA negotiations between our regions.