RP-Australia trade ties seen to improve

MANILA, Philippines - Philippine exports to Australia is expected to improve this year as the ASEAN-Australia- New Zealand Free Trade Agreement (AANZFTA) was signed.

At a press conference yesterday, Australian Ambassador Rod Smith said that trade between Australia and the Philippines is expected to grow.

“One of the most important benefits to come from the agreement is that it will provide businesses with greater certainty and more transparency in doing business, in the Philippines and indeed all countries across the region,” Smith said.

For exporters, he said that the tariff outcome is substantial because beginning this year,   Australia reduced to zero tariffs on over 96 percent of Philippine exports. Australia will eliminate all tariffs on imports from the Philippines by 2020, and most within a few years. Regional rules of origin will also facilitate doing business across the region, Smith said.

Smith underscored that Filipino exporters will greatly benefit from the improvement in market access because zero  tariffs level the playing field for Philippine exporters by removing the margin of preference that your competitors from Thailand, Singapore and

other countries have enjoyed into the Australian market under existing bilateral free trade agreements.

“It creates opportunities for exporters to link themselves better into global supply chains – for example in the automotive sector where Philippine auto part makers could supply Australia’s car industry, serving both the Australian and third-country export markets,” Smith explained. “On the import side, businesses can benefit from lower input costs. Consumers across  the AANZFTA region also stand to gain through lower retail prices,” Smith noted. Although the commercial relationship between the two countries is  significant, Smith said that it could be more because the Philippines accounts for just 2.8 per cent of Australia’s trade with the countries of ASEAN.

“Our key priority now is to ensure Philippine and Australian businesses are aware of AANZFTA and in a position to take early advantage of the opportunities that the agreement opens up,” Smith said. “AANZFTA locks in existing market access and  regulatory protections, speeds up administrative processes,  improves access to information, and locks in investment protection disciplines. These will have an important confidence- building effect,” he added.

Smith said that the other key outcomes include improved commitments on entry and stay for business people, professionals and skilled workers. Importantly also, the FTA is not static, and it provides a platform for further liberalization in the future, including a work program to improve investment market access.