Trade

Morrison Govt welcomes ‘world’s largest free trade agreement’

Beef Central, November 16, 2020

THE Morrison Government says Australian farmers and businesses are set to benefit from better export opportunities following with the signing of the Regional Comprehensive Economic Partnership (RCEP) Agreement between Australia and 14 other Indo-Pacific countries on Sunday.

Prime Minister Scott Morrison said the signing of the long-awaited agreement signalled the region’s shared commitment to open trade and investment, despite the challenges of COVID-19.

“Our trade policy is all about supporting Australian jobs, boosting export opportunities and ensuring an open region with even stronger supply chains. RCEP builds on our trade successes and is good news for Australian businesses,” Prime Minister Morrison said.

“With one in five Australian jobs reliant on trade, the RCEP Agreement will be crucial as Australia and the region begin to rebuild from the COVID‑19 pandemic.

“This agreement covers the fastest growing region in the world and, as RCEP economies continue to develop and their middle classes grow, it will open up new doors for Australian farmers, businesses and investors.”

Trade Minister Simon Birmingham said RCEP would be the world’s largest free trade agreement and would improve export opportunities for Australian farmers and businesses, especially in the services sector.

“This deal will further integrate Australian exporters into a booming part of the globe, with RCEP countries making up nearly 30 per cent of world GDP and the world´s population,” Minister Birmingham said.

“RCEP has been driven by the ten ASEAN nations, who collectively constitute Australia’s second largest two-way trading partner and have successfully brought Australia, China, Japan, New Zealand and South Korea into this regional trading block with them.

“This agreement may have taken eight years to negotiate but it could not have come at a more important time given the scale of global economic and trade uncertainty.

“Economic cooperation of this scale sends a strong signal that our region is committed to the principles of open trade for the post COVID-19 recovery, just as we advanced them during the previous years of strong economic growth.

“Greater openness within our region, as well as the greater integration of value chains and more common rules of origin which this deal delivers, will make it easier for Australian businesses and investors to operate throughout our region, helping Australia to continue to grow our exports.

“There are particular gains for Australian providers within the financial services sector, education, health, engineering and other professional services, who can become better integrated within the region and have more access within RCEP countries.

“Australia is committed to fully ratifying RCEP as soon as possible so Australian farmers, businesses and investors can start to access the benefits of this agreement. It will also be an inclusive agreement, with the door open for others, especially India, to join if and when they are ready.”

Australia will also commit $46 million to provide technical assistance and capacity building to help eligible ASEAN countries implement their RCEP commitments, ensuring RCEP delivers on its full potential.

The Morrison Government says the main benefits from the deal, when it is finalised, will be:

  • A new single set of rules and procedures for accessing preferential tariffs in any of the 15 RCEP markets
  • New scope for trade in services throughout the region including across telecommunications, professional and financial services.
  • Improved mechanisms for tackling non-tariff barriers including in areas such as customs procedures, quarantine and technical standards.
  • Greater investment certainty for businesses.
  • Rules on e-commerce to make it easier for businesses to trade online.
  • A common set of rules on intellectual property.
  • Agreed rules of origin that will increase the competitiveness of Australian inputs into regional production chains.

For more on the Regional Economic Partnership Agreement visit: https://www.dfat.gov.au/trade/agreements/not-yet-in-force/rcep

‘Non-tariff barriers just as important in FTAs’: AMIC

In a statement this morning the Australian Meat Industry Council (AMIC) congratulated the Morrison government on reaching an agreed Regional Comprehensive Economic Partnership (RCEP) and recognised its achievement in reaching a signed deal after eight years of negotiation.

AMIC CEO Patrick Hutchinson said the council looked forward to it progressing the deal through domestic legal and parliamentary processes in each of the countries, towards ratification and entry into force.

“We hope the RCEP is utilised as an opportunity to improve Australia’s relationship on trade with China.

“Access will still be an issue and AMIC continues to work with government on a range of solutions for our industry,” said Mr Hutchinson.

“This trade deal allows us to solidify existing relationships and develop new ones, especially within ASEAN, however, this does not mean we can diversify from one market for another under this deal.

“Australia must realise that it is easy to try and diversify markets to achieve volume. It is a lot harder to diversify markets to achieve value.”

It is important to state that Free Trade Agreements are only one piece of the trade puzzle, as non-tariff barriers are just as important to solve,  in combination with FTAs, to achieve true Free Trade,  and we cannot forget it.

“Our industry continues, like others, to remain under pressure from non-tariff barriers. RCEP will provide additional avenues for tackling non-tariff barriers by promoting compliance with WTO rules and further improving cooperation and transparency,” said Mr Hutchinson.

Non-tariff barriers can include a range of things not carried by a Free Trade Agreement.

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