House of Representatives

Explanatory Memorandum

Circulated By Authority of the Minister for Home Affairs, the Honourable Brendan O'Connor Mp

REGULATION IMPACT STATEMENT

The following regulation impact statement was tabled in the Joint Standing Committee on Treaties on 12 March 2009:

REGULATION IMPACT STATEMENT

ASEAN-AUSTRALIA-NEW ZEALAND FREE TRADE AREA

1. This Regulation Impact Statement relates to the Agreement Establishing the ASEAN (Association of Southeast Asian Nations ) ^[1] - Australia - New Zealand Free Trade Area (AANZFTA).

A. Problem Identification

2. The AANZFTA negotiations originated from efforts begun in the early 1990s to develop linkages between the ASEAN Free Trade Area (AFTA) and the Australia-New Zealand Closer Economic Relations (CER) Trade Agreement. A High Level Task Force report in 2000, entitled 'The Angkor Agenda', argued in favour of the formation of a free trade area between AFTA and CER. The report concluded that establishing an AFTA-CER free trade area was not only feasible but also advisable if both ASEAN and CER were to keep pace with global developments. Economic modelling by the Centre for International Economics at that time indicated gains of US$48.1 billion of GDP (US$19.1 billion for Australia). The report was produced against the background of: the 1997-98 East Asian Financial Crisis; the increasing competitive challenge from rapidly emerging economies such as China and India; and the global spread of free trade agreements (FTAs) that accelerated following the failure of the 1999 Seattle World Trade Organization (WTO) Ministerial meeting to launch a new WTO Round.

3. Australia's trading relationship with ASEAN and New Zealand is valued at $103 billion, representing 21 per cent of Australia's total trade in goods and services (2007-08 figures). ASEAN, as a group, is a larger trading partner for Australia than any single country, accounting for 17 per cent ($81 billion) of Australia's trade in goods and services in 2007-08 (China 13 per cent, Japan 12 per cent, and the United States 10 per cent). In 2007-08, ASEAN member countries purchased 11 per cent of Australia's merchandise exports ($20.5 billion) and 16 per cent of our services exports ($8.4 billion).

4. There is a significant difference between two-way trade, and investment flows, between Australia and ASEAN. Whereas Australia's trade with ASEAN accounts for around 17 per cent of total merchandise and services trade, only 5 per cent of Australia's direct investment abroad (i.e. direct physical investment in other countries) is held in ASEAN economies. Australian direct investment in ASEAN was around $16.4 billion at the end of 2007, having grown strongly by 26 per cent between 2005-06 and 67 per cent between 2006-07, as a result of strong growth in investment to Singapore and Malaysia. ASEAN investment in Australia represents around 4 per cent of the total stock of foreign direct investment in Australia: ASEAN direct investment stocks in Australia were around $14.8 billion at the end of 2007.

5. ASEAN member countries have committed to establishing an ASEAN Economic Community by 2015. This is aimed at bringing down barriers to goods, services, skilled labour and capital, to create a single market in a region with more than 570 million people and a combined GDP of more than US$1 trillion. This could help ASEAN to establish itself as a higher growth area in Asia.

6. While achieving a substantial outcome from the WTO Doha Round remains Australia's highest trade policy priority, FTAs are also an important plank of Australia's trade policy. Australia is pursuing FTAs with a number of countries, as is ASEAN. While Australia has a significant trading relationship with ASEAN, many goods and services exports continue to face substantial barriers to trade. The future growth prospects of ASEAN and its significance to Australia's trade and investment interests suggested substantial economic gains, including for Australia's manufacturing industry, from a comprehensive FTA with ASEAN and New Zealand.

7. The formal decision to launch the AANZFTA negotiations was taken by leaders at the ASEAN-Australia-New Zealand Commemorative Summit in November 2004. Leaders agreed to a comprehensive set of "Guiding Principles" for the negotiations and that the negotiations would commence in early 2005 and be completed within two years. The Guiding Principles committed countries to negotiate an agreement that covered goods, services and investment; the progressive elimination of all forms of barriers to trade and investment; and full implementation within ten years. The negotiations concluded at the ASEAN Economic Ministers-CER Trade Ministers meeting in August 2008, although it was also agreed that Australia would continue negotiating bilaterally with Indonesia and Malaysia with a view to improving automotive tariff commitments from those countries. These bilateral negotiations were subsequently finalised and AANZFTA was signed in Thailand on 27 February 2009. Although the negotiations were conducted between Australia, New Zealand and ASEAN as an entity, the completed FTA has resulted in separate market access commitments for Australia, New Zealand and each of the ten ASEAN member countries.

8. Australia's negotiating approach to the AANZFTA was aimed at reaching an outcome that would be WTO-consistent, support the multilateral trading system, preserve the benefits contained in Australia's existing bilateral FTAs and offer new opportunities for Australian exporters and investors.

9. Improved access and certainty in ASEAN markets resulting from the AANZFTA would be commercially significant for Australian industry, particularly in the Indonesian, Malaysian, Philippines and Vietnamese markets, where we do not have bilateral FTAs. In Vietnam's case, the AANZFTA provides an opportunity to build on the 2006 bilateral settlement agreed with Vietnam as part of its WTO accession. Australia's trade with Brunei and ASEAN's three Least Developed Countries (Burma, Cambodia and Laos) is modest, although Australian industry has growing interests in the Cambodian and Lao markets, especially investment in the mining and resource sectors.

10. The AANZFTA has the potential to generate broader benefits than a series of bilateral FTAs, by creating opportunities for Australian products to tap into regional supply chains. For example, Australian automotive component manufacturers could be expected to benefit from regional rules of origin (ROO) that would allow their products to be more readily integrated into regional production chains.

11. While many tariffs in ASEAN member countries are low, there are many sectors where tariffs are often high or at prohibitive levels. Barriers to Australian exports are significant in manufactures (e.g. automotive products and steel), processed foods and agricultural products. Tariffs, however, are only part of the problem. There are also significant non-tariff barriers, including non-automatic import licensing, differential excise duties, onerous labelling requirements and local content rules. Several ASEAN member countries impose import quotas on a number of agricultural products. Access to the services sector in most ASEAN member countries is limited with domestic regulations restricting market access for Australian service providers. Regulations and restrictions limit Australian investment in the region.

12. In contrast, ASEAN member countries face low barriers in the Australian market. Australia has a low overall average applied tariff of 3.6 per cent with over 86 per cent of Australian tariff rates ranging between zero and 5 per cent. Where tariff rates exceed 5 per cent - in Australia's textiles, clothing and footwear (TCF) and passenger motor vehicles (PMV) sectors - these tariffs are scheduled to be reduced through future unilateral tariff reductions. PMV tariffs will fall to 5 per cent in 2010 and TCF tariffs will fall to 5 per cent in 2015.

Trade Barriers by Sector:

Manufacturing

13. ASEAN member countries tariffs in some areas of manufacturing are extremely high, often effectively locking Australian exports out of the market, for example:

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tariffs on passenger motor vehicles are generally in the 30 to 80 per cent range;

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tariffs on automotive parts are generally in the 15 to 30 per cent range;

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aluminium tariffs are also generally in the 20 per cent (Indonesia) to 40 per cent range (Vietnam); and

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iron and steel tariffs are generally high and range up to 50 per cent (Malaysia).

14. Non-automatic import licensing, including for steel and PMVs and differential excise taxes, particularly for PMVs, restricts trade or creates uncertainty. Industry has identified local content requirements as an impediment to trade. Customs administration, including delays and lack of transparency, negatively impact trade.

Agriculture

15. There are significant tariffs on some agricultural products (e.g. horticulture products attract tariffs of up to 40 per cent) and the use of specific or mixed tariffs (tariffs generally based on volume, rather than value) increases the real duty paid for efficient, low-cost producers like Australia. Several ASEAN member countries impose tariff rate quotas on certain agricultural products which limit opportunities for Australian exporters. There are also non-tariff barriers which can be major impediments to trade. For example, discretionary import licensing applies to a large number of products in some countries. Sole importer status is granted to particular firms for imports of agricultural commodities such as wheat and sugar.

Services

16. Services sectors in ASEAN member countries generally contain significant barriers to foreign participation. Regulation is often fragmented (and poorly coordinated) across a number of government agencies and entry to the market may be either prohibited, constrained by limits on foreign equity participation or joint venture requirements, or depend heavily on the exercise of discretionary powers by Ministers or officials. Decision making is often characterised by a lack of both transparency and predictability.

Investment

17. There are impediments to investing in most ASEAN member countries which may have contributed to the fact that ASEAN accounts for a relatively small share of the total stock of Australian overseas investment. Australian investors confront a variety of impediments or other factors in the business environment which discourage investment. These include foreign equity restrictions, performance requirements (local content or export requirements), and a lack of legislative and regulatory transparency.

B. Objectives

18. Australia's overall negotiating objectives for the AANZFTA were to:

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Achieve a comprehensive and genuinely liberalising FTA that is supportive of the multilateral trading system;

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Deliver improved market access for Australian exporters of goods and services and investors to the ASEAN market ^[2] that provides commercial benefits and a platform for securing continuing trade and investment liberalisation in the future;

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Preserve the benefits of Australia's bilateral FTAs with individual ASEAN member countries and pursue opportunities to enhance them;

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Seek more transparent and predictable conditions for Australian traders, service suppliers and investors in ASEAN; and

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Position Australia to strengthen our strategic engagement with ASEAN.

19. Australia's detailed negotiating objectives can be found at Annex A.

C. Options

20. Australia has a number of options for addressing the market access problems identified in Section A above - through multilateral, bilateral and regional negotiations.

Multilateral

21. The Government's highest trade priority remains achieving a successful conclusion to the WTO. ^[3] Doha Round of multilateral trade negotiations. This is because the WTO negotiations offer the greatest opportunity to reduce barriers to trade and for Australia to increase access to overseas markets across agriculture, industrial products and services. Further liberalisation of trade through the conclusion of the Round will be key to stimulating growth in the global economy. Since it was launched in 2001 the Round has made important progress, particularly at the WTO Ministerial Meeting in July 2008.

Bilateral

22. The global spread of FTAs gained pace in the mid-1990s and accelerated following the failure of the Seattle WTO Ministerial Meeting in 1999. Australia was part of this trend in seeking to conclude FTAs where these offered the prospect of delivering significant benefits more quickly than might be possible through a WTO round. Since 2003, Australia has concluded bilateral FTAs with Singapore, Thailand, the United States, and Chile. Australia also has FTA negotiations underway with China, the Gulf Cooperation Council, Japan, Korea and Malaysia. In addition, a joint FTA feasibility study has been finalised with Indonesia and a study is underway with India. ASEAN member countries too have substantial FTA negotiating agendas, with Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam, all having completed bilateral FTAs.

Regional

23. Australia has continued to promote trade liberalisation at the regional level through the AANZFTA and the Asia-Pacific Economic Cooperation (APEC) ^[4] . In November 2008, the Minister for Trade, the Hon Simon Crean, MP, announced that Australia would participate in negotiations for a Trans-Pacific Partnership Agreement (TPP), expanding on the existing Trans-Pacific Strategic Economic Partnership Agreement (between Brunei, Chile, New Zealand and Singapore). Initial parties to the TPP negotiations are likely to comprise Brunei, Chile, New Zealand, Singapore, Australia, the United States, Peru and Vietnam.

24. The AANZFTA is the first time Australia has negotiated a plurilateral FTA, a key objective of which was to ensure that Australia maintains access to ASEAN markets at least as good as that provided to ASEAN's other FTA partners.

25. ASEAN has concluded FTAs with China (goods and services), Japan (goods), the Republic of Korea (goods and services) and is close to signing a goods agreement with India. ASEAN launched FTA negotiations with the European Union in May 2007. ASEAN's pursuit of region-wide FTAs is driven by wanting to attract more foreign investment and by its ambition to consolidate its position in the evolving regional economic architecture. The negotiation of bilateral FTAs by individual ASEAN member countries, notably Singapore and Thailand, was also an important factor motivating other ASEAN member countries to support ASEAN-wide FTA negotiations.

26. ASEAN-wide FTAs have been viewed by some ASEAN member countries as vehicles for driving internal ASEAN reforms. They have also provided the framework for developing ASEAN's economic linkages and ongoing engagement with key trading partners. However, the 'ASEAN first' policy has also meant that ASEAN has not been prepared to make commitments in ASEAN-wide FTAs that go beyond its own internally agreed commitments - which are modest in the non-goods areas. This is despite the fact that some ASEAN member countries have made more ambitious commitments in their bilateral FTAs with non-ASEAN trading partners.

27. The ASEAN region is marked by countries at different stages of development with varying capacities to negotiate across the full range of trade-related issues. The AANZFTA Guiding Principles recognise these differences and the need for them to be reflected appropriately in the FTA. In the main, the aim was to achieve such differentiation through different timeframes for implementing commitments: Australia and New Zealand having the shortest timeframes, followed by ASEAN's six more developed members (Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand), with Vietnam having additional time, and the three Least Developed Country members (Burma, Cambodia and Laos) the longest timeframes.

28. The Government remains committed to the achievement of the APEC Bogor Goals of free trade and investment in the Asia-Pacific region by 2010/2020. APEC has done useful work in support of the multilateral trading system and has made the successful conclusion of the WTO Doha Round its highest priority. APEC has also pursued the promotion of high-quality FTAs through best practices and model measures. It is now examining the feasibility of a Free Trade Area of the Asia-Pacific.

29. The East Asia Summit (EAS) ^[5] . participants are also pursuing work on free trade agreements. This includes Japan's proposed Comprehensive Economic Partnership for East Asia initiative, which is essentially a proposal for an FTA involving EAS countries.

The AANZFTA

30. The comprehensiveness of the AANZFTA agreement, covering all sectors, can be expected to encourage further trade liberalisation in the WTO or bilateral contexts individually within ASEAN. Australia's approach is aimed at utilising complementary supportive approaches to maximise Australia's trade, investment, commercial linkages and competitiveness across the ASEAN region and to provide new commercial opportunities for Australian industry and investors.

31. By its nature as a regional FTA, the AANZFTA has potential for broader benefits than a series of bilateral FTAs, including through the use of regional rules of origin to simplify the trade environment and expand trade opportunities. The AANZFTA establishes a framework for region-wide economic integration which should have long-term advantages in supporting the development of regional production chains and more efficient region-wide trading networks.

32. However, given the diversity of countries in ASEAN, and the differences in their level of development, there are limits to what the AANZFTA can achieve in the short to medium term. Therefore, there is scope for bilateral FTAs with ASEAN member countries to add value by focusing more intensively on particular market access (and other) priorities than has been possible in the AANZFTA, and by seeking to deliver some earlier or more far-reaching liberalisation in priority areas.

33. There are also strategic reasons for entering into the AANZFTA. ASEAN, as a group, has either signed or recently finalised FTAs with China, Japan, the Republic of Korea and India (i.e. all of its East Asian dialogue partners except Australia and New Zealand). Failure to secure improved access to ASEAN markets for Australian exporters through an FTA would not only risk seeing Australian industry's competitiveness erode over time as regional competitors negotiate better access through FTAs, but would also risk Australia's exclusion from participation in the emerging regional economic architecture.

D. Impact Analysis

34. A wide range of stakeholders identified an interest in the AANZFTA during a call for public submissions prior to the launch of negotiations. These stakeholders included groups and individuals from the agricultural sector, the manufacturing sector, the services sector, trade unions, employer organisations, state governments and public interest groups.

35. The AANZFTA, once implemented, could be expected to have impacts on a number of these stakeholders. There is considerable potential for the AANZFTA to create new trading opportunities and contribute to boosting Australia's modest investment relationship with ASEAN. As noted above, Australia's trade with ASEAN is substantial, with ASEAN accounting for 17 per cent ($81 billion) of Australia's total two-way trade in goods and services.

36. Negotiated over sixteen rounds and several intersessional meetings, the final AANZFTA package consists of:

(i)

the FTA text, containing commitments on goods, services, investment, temporary movement of natural persons, electronic commerce, intellectual property, economic cooperation and competition policy (see Annex B for summary of key obligations);

(ii)

schedules of tariff commitments, containing tariff reduction and elimination commitments (paras 37-42 and Annex C), and the associated rules of origin (paras 55-59);

(iii)

schedules of specific services commitments (paras 62-67 and Annex D);

(iv)

schedules of temporary movement of natural persons commitments (paras 68-70 and Annex E);

(v)

an 'implementing arrangement' containing an agreed work program of economic cooperation projects (Annex F);

(vi)

a letter from Australia's Minister for Trade to Vietnam's Minister of Industry and Trade, according recognition of Vietnam's Market Economy Status (para 54); and

(vii)

a Memorandum of Understanding on Article 1 (Reduction and/or Elimination of Customs Duties) of the Chapter on Trade in Goods (Annex G).

Separately, Australia and New Zealand exchanged letters outlining how the AANZFTA is to apply between Australia and New Zealand (Annex H).

Broad-based gains

37. The AANZFTA provides for the progressive reduction or elimination of tariffs facing Australian goods exports to ASEAN over a transition period, and the elimination of all Australian tariffs on imports from the AANZFTA Parties. Tariffs will be eliminated on a high percentage of tariff lines, with phasing commencing early in the transition period, using as a starting point applied most-favoured-nation (MFN) tariffs in the 2005 base period. Many tariffs currently at possibly prohibitive levels will be reduced to levels that should allow trade to flow within a few years. Exclusions from tariff commitments have been kept to a minimum, and generally do not exceed 1% of a country's national tariff lines. For those tariff lines where tariffs are not eliminated, but which are not in the exclusion category, tariffs will either be bound at the base period rate, or will be subject to tariff reductions ranging between 20% and 80%. The tariff commitments in the Agreement apply to those goods which meet the rules of origin (ROO).

38. The tariff outcomes provide for longer transition periods, and lower tariff elimination outcomes, for Vietnam and the three Least Developed Countries (Burma, Cambodia and Laos), in recognition of their status as newer ASEAN member countries with less developed economies.

39. A snapshot of the tariff elimination outcomes is provided by Table 1, which shows, for each Party, the number of tariff lines with tariff-free treatment in the base year of 2005, in 2010, in 2013, and at the end of the transition period for each country. The Table demonstrates the high levels of tariff elimination that will be achieved by the AANZFTA, and the fact that high levels of tariff-free treatment - generally around 90% - will be achieved as early as 2013 for the more developed ASEAN markets.

Table 1

Percentage of Tariff Lines with Tariff-Free Treatment

40. An additional perspective on the significance of the AANZFTA's tariff commitments is provided by Table 2 which shows the percentage of each country's tariff lines in the 0-5% range (i.e. tariffs that are zero or at such a low level they should not restrict trade) in the 2005 base period, in 2011, 2013, 2017, 2020 and 2025. The Table demonstrates that, within 2 years of the AANZFTA's entry into force, the tariff commitments should deliver some significant improvements in access to ASEAN markets for Australian exporters.

Table 2

Percentage of Tariff Lines with Tariffs in the 0-5% Range

41. Table 3 provides information on the percentage of base period (2005) imports from Australia with tariff-free treatment in 2005 (in relation to MFN tariffs), 2010, 2013, and at the final year of tariff elimination for each of the more developed ASEAN 6 countries and Vietnam. This table demonstrates the high level of current trade flows covered by tariff elimination commitments.

Table 3

Percentage of Base Period (2005) Imports from Australia with

Tariff-Free Treatment

42. Annex C provides a summary of the tariff outcomes for individual product sectors in relation to the four largest ASEAN markets with which Australia does not currently have an FTA, i.e. Indonesia, Malaysia, the Philippines and Vietnam.

43. Negotiations also recognised the wide range of non-tariff measures applied by ASEAN member countries which impact on Australia's trade in goods and that they can be a serious barrier to commercially meaningful market access. These include import licensing, differential excise duties and quantitative restrictions that may be applied in a way that favours domestic products over imports. These measures are a major concern for Australian exporters of manufactures, especially automotive and steel products, and have an impact on export conditions for a range of products of interest to Australia.

44. The AANZFTA incorporates WTO disciplines applying to non-tariff measures. However, it was not possible to negotiate any additional disciplines on such non-tariff measures as part of the AANZFTA outcome. Ensuring that such measures are effectively addressed will be a factor in determining the long-term success of the AANZFTA in facilitating Australia's trade with ASEAN member countries, however, and the Trade in Goods text includes a provision establishing a work program which aims to identify additional means of addressing such measures.

45. The FTA also delivers greater certainty and transparency for Australia's services exporters and investors, including through WTO-plus services market access commitments across a range of sectors and countries. These include key sectors of export interest, such as professional services, higher education, financial and telecommunication services.

Impacts on Specific Sectors and Stakeholders:

Agricultural Sector

46. ASEAN is an important market for Australian agriculture. ASEAN member countries have been among Australia's principal export market for sugar and among Australia's top ten markets for live animals, dairy, horticulture and wheat. Australia's agriculture exports to ASEAN were valued at around $3.9 billion in 2007-08.

47. The agriculture industry identified the following specific issues they sought to be addressed in the AANZFTA negotiations:

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reduction/elimination of specific and mixed tariffs (i.e. tariffs based on volume);

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immediate reduction of tariffs to ASEAN Common Effective Preferential Tariff (CEPT) rates, if tariffs are not eliminated immediately;

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elimination of tariffs on horticulture, especially in priority markets - Indonesia, Malaysia, the Philippines, Thailand and Vietnam? as a fall back, tariffs at the level provided to China under the ASEAN-China FTA;

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removal of tariff rate quotas on meat, including on goat products in the Philippines;

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removal of restrictive elements in SPS (i.e. quarantine) certification requirements of food products such as chicken, liquid milk and eggs;

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increased transparency of ASEAN food standards and labelling regimes for example the Philippines require pre-registration of labelling;

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disciplines to ensure wine labelling requirements are not used to restrict trade;

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reduction in burdensome customs procedures in some ASEAN member countries;

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reduction in the range of import licences on agricultural products whose conditions vary by product and are often limited to only a few domestic companies these include rice and rice products, sugar, milk and cereal flours (including wheat) livestock imports are subject to import licensing in addition to a requirement for veterinary certificates and pre-export quarantine periods (particularly in Indonesia and the Philippines).

48. The AANZFTA can be expected to facilitate an increase in Australia's exports of dairy products, some processed meat products, other processed foods and beverages. Exporters of a wide range of agricultural products would also benefit from the greater certainty resulting from the binding of current duty free entry, and elimination of some tariff quotas. The significance of the tariff outcomes for the agriculture sector is demonstrated in Annex C.

49. As a consequence of the AANZFTA, ASEAN member countries could be expected to increase their exports of some food products to Australia. However, as almost all Australian agricultural tariffs are currently applied at rates from zero to 5 per cent, tariff elimination under the AANZFTA would be unlikely to have a significant impact on the Australian agriculture industry. Nor would the AANZFTA commitments affect Australia's quarantine regime, as the FTA's provisions reaffirm the primacy of the WTO Agreement on Sanitary and Phytosanitary Measures.

Manufacturing and Resource Sector

50. High tariffs and tariff escalation (i.e. tariff levels rising in line with the degree of processing) were identified by Australian industry as barriers to increasing trade with ASEAN member countries. Non-tariff measures affect a number of industries. The lack of transparency in customs procedures adds substantially to the cost of doing business in ASEAN member countries. The manufacturing sector highlighted the following specific issues they sought to be addressed in the AANZFTA:

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significantly high tariffs in the automotive, steel, chemical and plastics and processed food sectors;

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rules of origin that allow for further integration with the ASEAN automotive supply chain;

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initial reduction of ASEAN textile, clothing and footwear tariffs to at least ASEAN Common Effective Preferential Tariff (CEPT) rates removal of non-tariff measures, such as restrictions on distribution, and domestic subsidies;

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elimination of differential excise taxes for cars which affect Australian exports of larger vehicles;

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removal of non-automatic import licensing (including for steel and passenger motor vehicles);

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improvements in transparency of customs administration; and

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enhanced standards and conformance cooperation to facilitate engagement.

51. In line with reducing and eliminating ASEAN tariffs, the FTA could be expected to result in increases in Australia's exports of manufactured items such as motor vehicles and components, transport equipment, ferrous metals, metal products, chemical, rubber and plastic products, textiles and paper products. The significance of the tariff commitments for the manufacturing and resource sectors is demonstrated in Annex C.

52. The set of rules of origin negotiated under the AANZFTA could also be expected to provide Australian exporters with better opportunities to link into regional supply chains. Products produced primarily from inputs sourced from the AANZFTA countries would receive preferential tariff rates when exported to the AANZFTA parties. This would provide a greater potential for Australian exports to, and imports from, ASEAN of intermediate products such as automotive parts and provide further investment opportunities in the region.

53. Reductions in Australian tariffs may result in ASEAN member countries increasing their exports to Australia of electronic equipment, machinery and equipment, motor vehicles and parts, metal products, wood products, chemicals, rubber and plastics and textiles and clothing. However, given Australia's already low tariffs (averaging 3.6 per cent), the overall impact on the Australian manufacturing industry is likely to be modest.

54. Vietnam is accorded WTO Market Economy Status as part of the AANZFTA package. This change puts Vietnam on the same footing as other WTO Members in relation to dumping, and subsidy and countervailing, investigations, as Australia agrees to not have recourse to special procedures allowed under Vietnam's terms of accession to the WTO. Industry representatives have noted that anti-dumping has not been a significant issue in relation to Vietnam, and highlighted Vietnam's level of market access opening in the AANZFTA as the key issue in developing a balanced package.

Compliance costs

55. The main area of additional costs for exporters associated with the AANZFTA would be in relation to complying with the rules of origin provisions required to claim preferential tariff treatment, including obtaining certificates of origin. These costs would be most relevant to the Australian manufacturing sector, due to its use of imported components and parts, but should not be significant.

56. For the majority of goods, there would be two options available to Australian exporters under the AANZFTA to comply with the rules of origin (ROO) provisions (i.e. there would be "co-equal" ROO). Exporters could utilise Australia's preferred Change of Tariff Classification (CTC) methodology - the same approach used in Australia's FTAs with the United States, Thailand and New Zealand, as it offers a simpler method of testing exports for their origin compliance - or exporters could also utilise ASEAN's preferred 'value-added' approach.

57. Consultations by the Department of Foreign Affairs and Trade (DFAT), the former Department of Industry, Tourism and Resources (DITR), the Department of Agriculture, Fisheries and Forestry (DAFF) and the Australian Customs Service (Customs) confirmed that industry generally supports a CTC-based approach on ROO as being less administratively burdensome than the alternatives. Under the AANZFTA co-equal ROO, for most products exporters will be able to choose whether to use CTC or value-added rules.

58. As with Australia's existing FTAs with Singapore and Thailand, origin status and consequent eligibility for preferential tariff treatment, would be based on certificates of origin which, in Australia's case, are expected to be issued by endorsed industry bodies such as the Australian Chamber of Commerce and Industry or the Australian Industry Group. The issue of these certificates would generally require a small fee-for-service payment by exporters.

59. We would not anticipate additional compliance costs for Customs in administering the AANZFTA's approach to ROO. While it is expected that most ASEAN exporters will use the 'value added' approach in the early years of the FTA, this choice will not provide a major additional burden for customs which has a strong familiarity with both the CTC and 'value added' approaches. Customs would not be directly involved in the issue of certificates of origin in Australia.

Services Sector

60. Two-way trade in services between Australia and ASEAN is worth around $18 billion and there is considerable potential for Australia's services exports (worth $8.4 billion) to increase. Services account for over 29 per cent of Australia's total exports to ASEAN. Both exports to and imports from ASEAN are dominated by travel and transportation services, with more than half of Australia's travel exports to ASEAN being education-related. Communication services, construction, and financial services and insurance, each accounted for less than 2 per cent of total services exports to ASEAN.

61. Most ASEAN member countries control foreign participation in their services sectors very tightly and maintain significant regulatory restrictions. These include foreign equity limits, joint venture requirements, geographic restrictions on the location of foreign firms; numerical or other limits on the temporary entry and stay of foreign personnel; and in the case of professional services, nationality restrictions on the right to practise. Some of these restrictions may be relaxed by regulatory authorities on a discretionary case-by-case basis, or on a unilateral basis (either indefinitely or for defined periods of time). Consequently, there can be significant gaps between applied levels of market openness and the levels that are "bound" in the WTO or other trade treaties, which creates uncertainty for foreign service suppliers.

62. The AANZFTA negotiations provided an important opportunity for Australia to enhance certainty and transparency for Australian services suppliers in sectors of priority trade interest, such as education, financial, professional and telecommunications services, including by closing the gap between applied and WTO-bound levels of market openness, strengthening regulatory disciplines and creating a platform for ongoing economic engagement on services trade issues.

63. Under the AANZFTA, ASEAN member countries have made market access and regulatory commitments that will enhance certainty and transparency for services suppliers in the region.

64. Some examples include 'WTO-plus' market access improvements in (see Annex D for more details of 'WTO-plus' gains in sectors of Australian priority trade interest):

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professional services from Malaysia (accounting, architecture and engineering), Philippines (accounting , engineering) and Vietnam and Indonesia (legal);

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higher education services from Malaysia, the Philippines, Indonesia and Vietnam (including an MFN commitment from Vietnam in relation to future ASEAN-wide FTAs on the cross-border supply of higher education services);

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telecommunications - all ASEAN member countries have agreed, subject to transitional arrangements in some cases, to pro-competitive regulatory disciplines to ensure that foreign suppliers can operate on a level-playing field with monopoly or former monopoly incumbent operators, which may own or control essential network facilities and infrastructure;

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financial services from the Philippines (banking), Indonesia (insurance and banking) and Malaysia (other financial services);

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construction services from Indonesia, Malaysia and Brunei;

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mining and energy related services from the Philippines and Thailand;

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temporary entry of business persons from Indonesia (intra-corporate transferees), Malaysia and Thailand (particularly in the education sector) and the Philippines (particularly in some professional services).

65. There is a built-in agenda to review market access commitments in services three years after entry into force of the Agreement, and periodically thereafter as determined by the FTA Joint Committee. The aim of these reviews is for Parties to further improve specific commitments so as to progressively liberalise trade in services.

66. Australia also has the right to request that an ASEAN member country extend to Australia any more favourable treatment (than provided for in the AANZFTA) which is afforded to a third country as part of a future ASEAN-wide FTA. This kind of "MFN on request" approach is consistent with the approach in Australia's bilateral FTAs with Singapore and Thailand.

67. Some examples of enhanced 'WTO-plus' regulatory disciplines in the AANZFTA which will benefit Australian services exporters in the region include requirements on Parties to:

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encourage competent bodies to enter into negotiations for recognition of professional qualifications, licensing and registration requirements and procedures;

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ensure that the use of business names under which service suppliers normally trade in their respective home country markets is not unduly restricted;

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publish measures of general application affecting trade in services on the Internet, to the extent possible;

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endeavour to provide interested persons of other Parties with a reasonable opportunity for comment prior to adoption of new measures;

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provide license applicants with an opportunity to remedy incomplete applications, status reports on the progress of applications on request, and reasons for the denial or termination of applications;

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publish information on temporary entry requirements, process completed applications for temporary entry and stay promptly and to notify applicants, on request, about the status or outcome of the application;

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observe minimum standards of procedural transparency, such as reasonable notice of administrative processes (e.g. licensing and rule-making in specific cases) and opportunities to present facts and arguments before final administrative action;

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afford services suppliers with a commercial presence certain post-establishment investment protections, as set out in the Investment chapter, including investor-state dispute settlement.

Movement of Natural Persons

68. The ability of investors, goods sellers and service suppliers from one country to enter and stay temporarily in another country to explore business opportunities, negotiate and enter into contracts and transact business (supply services) is a key hallmark of deeper economic integration. Business stakeholders in Australia have raised issues concerning delays in obtaining entry visas or other permits in some ASEAN member countries, difficulties in obtaining relevant forms and documentation and a lack of transparency in decision-making. The AANZFTA aims to provide a platform for addressing these concerns through a movement of natural persons (MNP) chapter.

69. The AANZFTA MNP chapter provides a framework for Parties to make commitments on temporary movement of service suppliers, investors and goods sellers and other persons engaged in regional trade and investment. The chapter contains obligations which require Parties to publish information on temporary entry requirements, process completed applications for temporary entry and stay promptly and to notify applicants, on request, about the status or outcome of the application. Any fees imposed in relation to the processing of immigration formalities are required to be reasonable and in accordance with domestic law.

70. From entry into force of the AANZFTA, the commitments of most ASEAN member countries under the MNP chapter will relate only to service suppliers, consistent with the WTO GATS framework. However, most ASEAN member countries have improved their WTO commitments in this area, including Indonesia, Malaysia, Singapore, the Philippines and Thailand (e.g. length of stay for intra-corporate transferees); Malaysia and Thailand (education services suppliers) and the Philippines (professional services) - see Annex E for details of 'WTO plus' gains. The MNP chapter provides a platform for countries to broaden and deepen their commitments in future and thereby facilitate freer movement of skilled labour within the region across all sectors of the economy.

Investment

71. There is a significant difference between two-way trade, and investment flows, between Australia and ASEAN. Whereas Australia's trade with ASEAN accounts for around 17 per cent of total merchandise and services trade, only 5 per cent of Australian's direct investment abroad (i.e. direct physical investment in other countries) is held in ASEAN economies. ASEAN investment in Australia also represents only around 4 per cent of the total stock of foreign direct investment in Australia. ASEAN direct investment stocks in Australia were around $14.8 billion at the end of 2007. Singapore accounts for about 51 per cent of total ASEAN investment. ASEAN direct investment in Australia declined sharply between 2001 and 2002, from $16.3 billion to $7 billion, but has increased steadily since 2003.

72. Australian direct investment in ASEAN was around $16.4 billion at the end of 2007. Direct investment grew only modestly between 2001 and 2005, but rose strongly by 26 per cent between 2005-06 and 67 per cent between 2006-07, driven by strong growth in investment to Singapore and Malaysia. Investments in the region vary widely. In Singapore, for example, the main investments are in information technology, financial services and investment holdings for regional operations. In Vietnam, there are important investments in manufacturing, food and beverages, financial services and education. Australian investors in Malaysia include prominent companies in industrial and infrastructure development as well as education, while in Indonesia, Australian companies have invested principally in mining, beverages and financial services.

73. The majority of Australian investment in ASEAN takes the form of portfolio investment (e.g. shares) and other investment rather than direct investment. The same is true of ASEAN investment in Australia. Total Australian investment in ASEAN was around $31.4 billion at the end of 2007. Total ASEAN investment in Australia at the end of 2007 was $52.8 billion. Australian investment in ASEAN is also highly concentrated, with Singapore having been the recipient of more than half of Australia's total investment in ASEAN over recent years.

74. Against this background, there is clearly scope to deepen the economic relationship between Australia and ASEAN through an expansion of direct investment and to broaden Australian investment across ASEAN. The AANZFTA cannot address all the factors and economic fundamentals that affect investor perceptions and decisions. However, to the extent that improved market access and legal safeguards can be realised in the AANZFTA, the FTA can contribute to improved investor confidence by providing a more certain, liberal and transparent environment for Australian investors.

75. With regard to market access in non-services sectors (agriculture, mining, forestry, fishing and manufacturing), Australian investors confront a variety of impediments. These include foreign equity restrictions, restrictions on organisational form, and a lack of legislative and regulatory transparency. While these issues may also adversely impact upon investor confidence, additional post-establishment factors such as the potential for expropriation, restrictions on profit repatriation and transfers, and the absence of adequate legal protection in some ASEAN member countries erode investor confidence and limit the potential to increase investment across ASEAN.

76. The AANZTA contains a significant regime of legal protections that will enhance certainty and transparency for investors during the post-establishment stages of investment. These obligations are comparable to Australia's existing bilateral Investment Promotion and Protection Agreements (IPPAs) with four ASEAN member countries. These include requirements on Parties to:

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apply fair and equitable treatment and full protection and security (the minimum standard of treatment at customary international law) to investments;

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ensure non-discriminatory treatment in relation to measures for investors that have suffered losses due to armed conflict, civil strife or states of emergency;

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allow funds of an investor relating to an investment to be transferred freely and without delay, subject to specified exceptions;

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ensure that any expropriation or nationalisation of an investment is only for a public purpose, applied in a non-discriminatory manner, is in accordance with due process of law and is accompanied by payment of prompt, adequate and effective compensation (the chapter includes an annex which elaborates on the nature and scope of "indirect" expropriation).

77. There are detailed provisions on investor-state dispute settlement (ISDS) which provide that where an investor alleges that a Party has breached specific obligations (including those mentioned in the previous paragraph) in such a way as to cause loss or damage, and it has not been possible to resolve the dispute by consultations, the dispute may be referred to international arbitration. Investor-state dispute settlement will not apply to investment screening or admission processes.

78. On market access restrictions (pre-establishment issues), Parties made the assessment that there was insufficient time to complete market access schedules to an appropriate standard within the timeframe of the negotiations. Therefore, the AANZFTA provides for a work program to develop market access schedules, covering pre-establishment issues such as foreign equity limits, within five years of entry into force of the Agreement, subject to agreement of the Parties. The assessment was based, in part, on the novelty of the agreed two-annex "negative listing" approach to scheduling for many ASEAN member countries. The work program notes, inter alia, that further discussions between the Parties will take place on the application of MFN treatment and procedures for the modification of schedules.

Intellectual Property (IP)

79. There are significant variations in intellectual property law and practice both within ASEAN and between some ASEAN member countries and Australia. This variation introduces complexity and uncertainty that impedes IP-related exports to the ASEAN region and adds to the transaction costs of those businesses which do seek to protect their intellectual property in ASEAN markets. Australian industry expressed concern regarding inadequate protection and enforcement of intellectual property in most ASEAN member countries. These concerns further undermine the confidence of IP-related exporters and raise apprehension regarding a flow of counterfeit and pirated goods from ASEAN into Australia. Australia's priority was to seek commitments and mechanisms for cooperation to enhance harmonisation of ASEAN's intellectual property systems with international standards, with a view to delivering efficiency gains to Australia's IP exporters and advancing the protection and enforcement of the rights of Australian intellectual property holders.

80. The outcome on IP under the AANZFTA reinforces the Parties' existing rights and obligations under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), including reiterating national treatment obligations, and builds on those rights and obligations in a number of areas. The Agreement contains specific obligations on protection of trade marks and geographical indications, copyright, government use of software and transparency. It provides for cooperation in many areas, including to promote the efficiency and transparency of intellectual property administration and registration systems, cooperation on border measures with a view to eliminating trade which infringes intellectual property and cooperation regarding accession to a number of international standard setting treaties which would facilitate further harmonisation of intellectual property systems in the region. Importantly, the Agreement also includes a Committee on Intellectual Property to drive implementation of the IP Chapter, providing a high level vehicle to enable closer cooperation with New Zealand and ASEAN for the benefit of IP owners and users in the region.

Trade Unions

81. One of the main concerns of trade unions, as highlighted in the public submission process, was the potential adjustment costs associated with the AANZFTA on the Australian manufacturing industry. The analysis for the manufacturing sector above has highlighted the opportunities for Australian industry from ASEAN tariff reductions, while also noting a reduction in Australian tariffs, including the higher tariffs in the textile, clothing and footwear (TCF) and passenger motor vehicle (PMV) sectors. The main adjustment costs for Australian industry are likely to be in these areas.

82. However, the overall adjustment costs from the FTA on the TCF and PMV tariff reductions are likely to be modest. Any increase in imports of motor vehicles from ASEAN member countries needs to be seen in the broader context of the potential benefits for the Australian manufacturing sector, including the automotive industry, from increased export opportunities and access to regional supply chains under the FTA. Similarly, trade in TCF with ASEAN is not large - imports from ASEAN are just under 6 per cent of total TCF imports. Adjustment costs from any increase in TCF imports from ASEAN are therefore unlikely to have major ramifications for employment in Australian TCF sectors.

Industry Groups

83. Industry groups were broadly in favour of negotiating the AANZFTA, provided the agreement was comprehensive in nature and delivered clear benefits to Australian industries. As discussed in the analysis above, liberalisation will occur across a broad range of tariff lines in all sectors - including agriculture and manufacturing - and will create substantial new market access opportunities for Australian exporters of goods and services.

State governments

84. Australia's state governments identified themselves as stakeholders in the negotiation of the AANZFTA. The nature of the issues raised by state governments related to the interests of the industries residing in their states, their regulatory responsibilities and administrative implications of AANZFTA commitments. There are no additional impacts on state governments beyond those discussed in other sections of this impact analysis.

Public interest groups

85. The AANZFTA is likely to have a positive impact on Australian consumers. There should be increased benefit for consumers as falling Australian tariffs provide greater choice across many product lines, including in TCF and PMV. The AANZFTA's new provisions on services should also see increased choice in service providers.

Small business

86. The overall impact of the AANZFTA on small business is likely to be positive. Many of the sectors which are expected to benefit from the FTA contain a significant number of small businesses. These include the dairy sector, beverages, construction, and a range of services industries where barriers to entry are high. No industry sectors are expected to experience a significant decline in activity as a result of the FTA. As noted above, the system of rules of origin should benefit access for business, including small business, into regional supply chains, at minimal administrative cost.

87. In addition, provisions designed to ensure transparency, consistency, and predictability, in the application of customs laws and regulations would increase certainty and also reduce costs for small businesses. Provisions which would assist in harmonisation of ASEAN intellectual property systems with international standards should also reduce the complexity and uncertainty that can impede IP-related exports to the ASEAN region and reduce transaction costs, particularly benefiting smaller businesses which seek to protect their intellectual property in ASEAN markets.

Federal Government

88. The main impact of AANZFTA on the Federal Government will be the loss of tariff revenue. The Treasury has estimated that the loss of tariff revenue to the Australian Government resulting from AANZFTA over the 2009-10 Budget forward estimates (four years from 2009-10 to 2012-13) will be $971 million. This estimate is based on an analysis of existing trade levels (as at November 2008) and does not take into account variations in the level of trade that will result from the FTA, either in terms of imports form ASEAN increasing faster than imports from other non-FTA countries or the positive impact on economic growth of the treaty. The estimates will be affected by revisions to forecasts and projections for the level of imports.

Broader strategic considerations

89. Continued engagement with Asia is a key element of Australia's foreign and trade policies. In part, this reflects the trade and economic importance of the region to Australia. Australia also has strong security and defence interests in the region. An FTA has the potential to:

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deliver significant benefits to the overall relationship between Australia and ASEAN member countries;

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complement the broader economic/political institutional frameworks of APEC, the ASEAN-Australia Forum and our various bilateral arrangements;

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encourage ASEAN to adopt a high standard and WTO-consistent approach to FTAs;

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assist ASEAN's own economic integration efforts; and

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help to position ASEAN as a positive influence in evolving regional economic architecture.

E. Consultations

90. Public submissions were sought prior to the commencement of the AANZFTA negotiations and around 50 written submissions were received, including from the South Australian, Victorian and Western Australian governments. Submissions from these governments recognised the potential benefits of an FTA between Australia and ASEAN, and agreed on the need to negotiate a comprehensive, high quality agreement.

91. During the negotiation of the AANZFTA, DFAT officials held regular consultations with relevant Commonwealth agencies, state and territory governments and other stakeholders, including industry, unions and public interest groups, to ensure that their views informed development of the Government's negotiating strategy. In addition to a large number of one-to-one and smaller group meetings, there were five large roundtable meetings between December 2006 and December 2008 with peak organisations representing industry, trade unions, professional bodies and other interested groups.

92. Commonwealth agencies were consulted via regular inter-departmental committee meetings and participation of relevant agencies in the Australian delegation to negotiating sessions. DFAT's web site was updated after each AANZFTA negotiating session, providing for wider dissemination of information to stakeholders.

93. State and territory governments were consulted through regular senior State and Territory Trade Officials Group (STOG) and Commonwealth-States Standing Committee on Treaties (SCOT) meetings, teleconferences and regular visits by the AANZFTA negotiators to state and territory capitals. The Minister for Trade also consulted state Premiers and territory Chief Ministers on Australia's services and movement of natural persons schedules and briefed his state and territory counterparts at the COAG Ministerial Council on International Trade.

94. Consultations with industry have been particularly substantial with DFAT attending more than 100 meetings and industry roundtables. These consultations helped identify commercially significant impediments to increasing Australia's exports to, and investment in, ASEAN markets. At the negotiating rounds in Perth in July 2007 and Brisbane in April 2008, business representatives participated in seminars with senior ASEAN and New Zealand negotiators.

95. Industry groups were broadly supportive throughout the AANZFTA negotiations, with most seeking improved market access to ASEAN member countries. The automotive industry was strongly supportive of the FTA and sees benefits in gaining market access to ASEAN's growing passenger motor vehicle market. The sector also sees benefits in attaining better access to regional supply chains for automotive parts, which is expected to be facilitated by the more liberal regional rules of origin negotiated under the AANZFTA.

96. The textile, clothing and footwear (TCF) industry saw both pluses and minuses in a potential FTA. For example, the Council of Textile and Fashion Industries of Australia indicated a preparedness to consider a reduction and elimination of tariffs on individual tariff lines of interest to ASEAN, but only on a reciprocal basis and only if these reductions were not used as a precedent in other FTAs. Similarly, the Australian footwear industry had both offensive and defensive interests. It was prepared to accept a lowering of footwear tariffs in Australia to zero, but only on the basis of reciprocity from ASEAN.

97. There were regular briefings of agricultural organisations, including through the Technical Working Group facilitated by the National Farmers' Federation. Australia's agriculture sector is broadly supportive of the AANZFTA and sought market access gains in a range of priority sectors such as dairy, red meat, pork, wheat and grains, and wine. In some cases (e.g. horticulture) high tariffs were the main concern, but most indicated the use of non-tariff measures as a priority for negotiation. A number of industries warned of the dangers of any weakening of Australia's quarantine regime.

98. Services industries generally supported an FTA with ASEAN, reflecting the potential for significant growth in exports due to high barriers to entry. Services stakeholders, including the Australian Services Roundtable, Certified Practising Accountants, Engineers Australia, Institute of Chartered Accountants of Australia, Insurance Council of Australia, Law Council of Australia, TAFE Directors Australia, Australian Nursing and Midwifery Council and the Australian Nursing Federation, were consulted closely on the emerging services outcomes, including market access.

99. Australia's financial services providers were particularly supportive of a comprehensive FTA. ASEAN regulations prevent foreign banks from offering full domestic banking services, and limit their ability to compete in the regional market. Equity limitations were a concern for some services providers. Members of the media and entertainment industries sought a positive list approach to services market access commitments in the FTA, either with no listing of cultural industries or a general cultural exception that would allow the Government to introduce protective legislation in the future.

100. Public interest groups and unions indicated concerns over environment, human rights abuses (especially the ACTU and Australian Manufacturing Workers Union (AMWU) in relation to Burma), and trade and labour standards. The ACTU and AMWU also expressed a preference for pursuing multilateral trade agreements over bilateral or regional FTAs. Some submissions raised concerns with Australia negotiating with a regional grouping that includes Burma. The AANZFTA does not change Australia's relationship with Burma. Negotiating an FTA with a country or, in the case of the AANZFTA, a group of countries, did not constrain or alter the approach Australia takes bilaterally, plurilaterally or multilaterally on human rights-related matters. Australia expects to continue its ongoing bilateral dialogue and engagement on these issues, as well as through all relevant international and regional mechanisms. At the August 2007 ASEAN Economic Ministers-CER Consultations it was agreed that government procurement and labour and environment provisions would not be included in the AANZFTA itself. Australia and New Zealand pursued their government procurement objectives as part of the AANZFTA package, but it was not possible to achieve any outcomes in this area. New Zealand pursued its labour and environment agenda with some individual ASEAN member countries in the context of the AANZFTA negotiations, and agreed a bilateral outcome with the Philippines which supplements instruments already secured separately with other ASEAN member countries.

F. Recommended Option

101. On balance, it is in Australia's interests to enter into the AANZFTA, given the Agreement will:

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deliver significant market access commitments that provide benefits to Australian producers, exporters, consumers and investors and a platform for securing continuing trade and investment liberalisation in the future;

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support greater economic integration in the region, including through greater use of supply chains, especially due to its use of regional rules of origin to determine eligibility for the AANZFTA tariff commitments;

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deliver these market access gains in a faster timeframe than appears possible through the WTO Doha Round;

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achieve sufficiently comprehensive and reform-oriented WTO-plus commitments to ensure that the AANZFTA is supportive of the multilateral trading system;

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preserve and build on the benefits in Australia's existing bilateral FTAs with New Zealand, Singapore and Thailand;

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strengthen Australia's strategic engagement with ASEAN and with the evolving regional economic architecture;

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impose small adjustment costs that would be outweighed by the overall economic gains to the Australian economy; and

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not detract from our ability to continue to negotiate trade liberalisation in other fora - WTO, regional or bilateral.

G. Implementation and Review

102. Once signed, the AANZFTA will enter into force when Australia, New Zealand and at least four ASEAN member countries complete their domestic implementation processes. In view of the time required for a number of the AANZFTA Parties to conclude their domestic processes, it is expected that the AANZFTA will enter into force in the second half of 2009 and, in any event, no later than 1 January 2010.

103. The AANZFTA contains a series of mandated reviews on aspects of the Agreement following entry into force (EIF):

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the FTA Joint Committee will meet within one year of EIF to review the implementation and operation of the FTA;

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the Committee on Investment will meet within one year of EIF and oversee discussions on investment market access and application of MFN, to be concluded within five years of EIF;

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the Sub-Committee on Rules of Origin will review the cumulative rules of origin provision between 12 and 18 months from EIF;

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a report on non-tariff measures in relation to trade in goods will be submitted by the Committee on Trade in Goods to the FTA Joint Committee within two years of EIF;

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a new round of services negotiations will commence within three years of EIF; and

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a general review of the AANZFTA will take place in 2016 and every five years thereafter, unless otherwise agreed by the Parties.