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Australia's largest trade agreement signed
Written on the 1 February 2010
Australia’s largest trade agreement came into force on January 1 this year.
The agreement between Australia, New Zealand and the Association of South East Asian Nations (ASEAN) provides progressive reduction, or (in most cases) elimination of tariffs facing Australian and New Zealand goods exports to ASEAN.
It also provides the elimination of tariffs on imports to Australia and New Zealand.
Currently the agreement is active with six ASEAN countries —Singapore, Vietnam, Malaysia, the Philippines, Burma and Brunei — the remaining four ASEAN nations are expected to ratify the agreement in the near future.
The ASEAN market
Globally ASEAN represents a market of more than 566 million people.
Australia’s two-way trade with ASEAN has grown by an annual average of 10 per cent over the past decade – faster than any of the Australia’s top 10 commercial partners, except China.
For New Zealand, ASEAN is the third largest export market — growing 110 per cent since 2003.
The eventual removal of tariffs on 99 per cent of New Zealand's current exports to the four key ASEAN markets of Indonesia, Malaysia, the Philippines and Vietnam, will bring an annual duty saving of NZ$50 million based on current trade.
The trade agreement will strengthen Australia and New Zealand’s commercial ties with the region.
Specific trade agreement benefit for franchises
Despite the removal of tariffs there is one other element which is anticipated to greatly benefit the franchise sector:
Poor intellectual property protection has been a major turn-off for franchisors looking to expand franchise operations in some international destinations.
This aspect of the trade agreement will reduce some of the risk for franchisors looking to expanding internationally and deliver some recourse should their intellectual property be misused.
What the agreement means for your franchise
Franchises are advised to check the Tariff Schedule of each country to confirm the treatment of specific tariff lines of interest to their industry.
The Tariff Schedule for Australian businesses click here (The Tariff Schedule is in Annex 1 of the Agreement to confirm the treatment of specific tariff lines of interest to them [link].)