WA Businesses get a Boost with Asian FTA
WA Businesses get a Boost with Asian Free Trade Agreements
West Australian businesses should take advantage of all the new opportunities opened up by free trade agreements, not focus on any one alone according to Austrade.
Speaking at an Australia-Indonesia Business Council event in Perth on Wednesday (7th July), Austrade’s Chief Economist, Tim Harcourt said the US FTA is dominating discussions, however the Singapore and Thailand FTA’s have much to offer.
“The Thailand-Australia FTA (TAFTA) just signed on Monday, 5 July by Prime Minister John Howard and Thailand’s Prime Minister Thaksin Shinawatra will enable more than three-quarters of Australian exports to Thailand to be tariff-free from the first day the agreement enters into force expected on 1 January 2005, subject to approval by both the Australian and Thai Parliaments,” Mr Harcourt said.
“Thai tariffs on food and beverage including whisky, lamb, ice cream, fruit and vegetables, and fisheries will go along with duties on automotives and steel.
“The Singapore-Australia FTA (SAFTA) signed in July 2003, is particularly important for West Australian professional services exporters with educational institutions, architects, banks and law firms being big winners,” he said.
Mr Harcourt said SAFTA and TAFTA have been forerunners to closer links between Australia and South East Asia.
“A major breakthrough occurred in April of this year, with the announcement by the Association of South East Asian Nations (ASEAN), to explore the possibility of closer trade relationship with both Australia and New Zealand,” he said.
“Australia is well-positioned to grow our already strong trade and investment links with South-East Asia, following an invitation to negotiate a trade deal with the ASEAN group of 10 countries. This would give Australia access to economies with a combined GDP of US$737 billion.
“These agreements show how enmeshed we have become in the Asia Pacific region in terms of trade and how this is likely to continue to the benefit of our Asian trading partners and ourselves.”
Mr Harcourt said other developments in the Asia Pacific Region should also be on the radar screen for West Australian exporters.
“According to UBS Warburg, China is expected to be Australia’s number one export destination by 2010 – overtaking Japan. However, commentators are also wondering whether the current rate of growth is sustainable and how the Chinese authorities can slow down the economy without doing any long-term damage,” he said.
“HSBC Chief Economist, John Edwards believes the China boom and bust scenarios are exaggerated and has argued that slower growth in China will not wreck the Australian economy, and faster growth will not create a boom.
“With China growing at a rapid rate, there has been questions about whether we’ll see the eventual demise of Hong Kong as a commercial hub, given the renaissance of Shanghai. Well, there’s no doubt that Hong Kong, as a mature services-based economy can no longer continue its growth rates of a decade or so ago but as a major trading hub the country still deserves its ‘entrepot’ status. After all, there are still 4920 Australian businesses with interests in Hong Kong, compared to 3101 in China (with a population of around seven million people compared to 1.3 billion). Likewise, Taiwan has been holding on quite well. There are Australian 2585 exporters with interest in the island economy (in a population of 23 million),” Mr Harcourt said.