ASEAN members and its dialogue partners have gathered for the 40th and 41st ASEAN Summits in Cambodia held on 10-13 November 2022, where the substantial conclusion of the ASEAN, Australia, New Zealand Free Trade Area (AANZFTA) upgrade negotiations was announced.
Two years after formally launching upgrade negotiations in September 2020, the substantial conclusion conveys ASEAN, Australia, and New Zealand’s resolve to accelerate post-pandemic recovery. The upgraded AANZFTA is a high-quality and commercially meaningful agreement that will potentially open up new opportunities by considering modern trade practices and being responsive to emerging challenges.
ASEAN, Australia, and New Zealand introduced the inclusion of new Chapters on Government Procurement, Micro, Small, and Medium-Enterprises (MSMEs), and Trade and Sustainable Development to facilitate growth anchored on an inclusive and sustainable regional economy. With the inclusion of the new chapters, the upgraded AANZFTA is viewed to benefit both regions in a broad spectrum of areas.
Among others, the agreement will accelerate supply chain integration and resilience; ensure a smooth flow of essential goods during crises; deepen services and investment liberalization; and support electronic commerce and digital transformation.
“The substantial conclusion of the upgrade negotiations marks another milestone for both ASEAN and Australia-New Zealand, as we gain another high-quality FTA. The inclusion of a Chapter on Trade and Sustainable Development and MSMEs is expected to fuel inclusive growth and integration of businesses into the global value chain,” Trade Secretary Fred Pascual said.
Amidst an uncertain global environment, the respective leaders acknowledged that achieving and realizing the real benefits of the upgraded AANZFTA depends upon the early signing and timely implementation. Thus, the Parties aim to sign the second protocol to amend the agreement establishing the AANZFTA in 2023.
Australia and New Zealand were the Philippines’ top 16th and 28th trading partners in 2021, respectively, with a combined total trade value of PHP2.64 billion. In addition, Australia was the country’s top 14th origin of investment inflows in 2021, amounting to PHP664.32 million.
The AANZFTA entered into force for the Philippines in 2010, it is the first region-to-region trade agreement for ASEAN, Australia, and New Zealand and remains as ASEAN’s most ambitious single undertaking since it embarked on an outward-looking economic regime to integrate ASEAN into the global economy.