Australian, NZ envoys urge traders to maximize free trade benefits

CEBU, Philippines - Australian Ambassador to the Philippines Rod Smith encouraged Cebuano businessmen to take advantage of the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), otherwise they will lost a significant market from these two countries.

“The trade opportunity in Australia and New Zealand is not fully taken advantage of by businesses in the Philippines,” said Smith in his recent visit to Cebu.

Smith said with the implementation of AANZFTA, Filipino traders, specifically the exporters are facing bright prospects, as the FTA levels the playing field between the ASEAN, Australia and New Zealand.

With this, he said Filipino exporters can trade with New Zealand and Australia, with over 600 million consumers.

For his part, New Zealand Ambassador to the Philippines Andrew Matheson said that the agreement will mean that Philippine exporters will be on an even footing in terms of tariffs with exporters from other countries, of which New Zealand has an existing FTA with, such as China, Malaysia, Thailand, Singapore, Brunei, and Australia.

“Philippine consumers and New Zealand exporters will also gain from the tariff commitments made by the Philippines. Tariffs on most of New Zealand’s dairy exports to the Philippines will disappear in 2010,” Matheson said.

Tariffs on kiwifruit and apples will go in 2011, and most beef products after that, he said.

“New Zealand wine will be tariff free from 2015. These are significant outcomes,” Matheson added.

Significantly, the Ambassadors emphasized that the FTA covers areas other than goods, such as service exports, investment and business mobility.

“That is why AANZFTA is what is called a ‘comprehensive single undertaking’. This is the first time Philippines has entered into such an arrangement, and the first time ASEAN has done this,” he said.

AANZFTA brings certainty on the level of openness for provision of services—a guarantee that current access conditions will not get worse, including in sectors such as education, mining and air transport services.

In business mobility, New Zealand will allow the entry of ASEAN member country business visitors and installers/servicers for up to three months in any calendar year.

This means, that executives, managers and specialists, such as intra-corporate transferees, are permitted to enter for up to three years.

Independent professional service suppliers on the other hand, from ASEAN countries are permitted for up to one year, subject to labor market tests.

The FTA also commits countries to provide protection from arbitrary expropriation of foreign investments. This minimizes the risk of arbitrary government action to expropriate established investments, and, if that does occur, ensures that appropriate compensation is paid.

New Zealand has agreed to work with the Philippines to help develop the local dairy industry, an industry that currently only caters to about one percent of this country’s demand.

“The exact terms of this cooperation are still being discussed with the Philippine government, but it will begin with a scoping study of what has been tried before in terms of dairying in the Philippines. Work is already underway on beginning that scoping study,” Mathenson concluded.