The Australian Free Trade Agenda through 2023 and Prospects for Further Initiatives

Australian businesses are active participants in international trade, both as importers and exporters. Over the years, the Australian federal government has progressively liberalised Australian trade policy, including reducing levels of tariffs and establishing a series of Free Trade Agreements (FTAs) with trading partners.

The FTAs are bilateral, plurilateral, and regional, and in many instances, Australia has more than one FTA with one trading partner. For example, Australia has a bilateral FTA with Singapore and both countries are also parties to the ASEAN-Australia-New Zealand FTA, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership Agreement. FTAs and other international trade agreements are negotiated by the Department of Foreign Affairs and Trade (DFAT). Once signed, the commencement of any FTA is subject to domestic implementation in contracting countries. In Australia, that requires review and endorsement of the FTA by the Joint Standing Committee on Treaties (JSCOT) and the passage of legislation required to implement the FTA, usually by way of amendments to the Customs Act 1901 and the associated regulation made pursuant to that Act.

Significant Developments during 2023

The most significant developments in the Australian Free Trade Agenda in 2023 can be summarised as follows.

India

The Australia-India Economic Cooperation and Trade Agreement (ECTA) commenced on 29 December 2022 (which is nearly 2023). This agreement was the first step in liberalising Australia’s trade with India and led to significant reductions in tariffs, increased quotas and included commitments to facilitate trade in certain goods in each country, such as wine and various spirits. During 2023, Australia and India continued negotiations towards a broader Australia-India Comprehensive Economic Cooperation Agreement (CECA). On commencement of the CECA, the ECTA will be “folded into” the CECA.

United Kingdom

After Brexit, Australia was able to advance negotiations with the United Kingdom. The longstanding and close relationship between Australia and the U.K. facilitated an early completion of negotiations. As a result, the Australia-United Kingdom Free Trade Agreement came into effect on 31 May 2023.

European Union

Australia and the European Union commenced negotiation on an FTA in June 2018. In subsequent years, the COVID-19 pandemic and Brexit delayed those negotiations. During 2023, active negotiations ceased, as the parties could not reach agreement on some essential items. Two of the main issues were (1) that the EU would not provide sufficient market access to Australian exporters and (2) that Australia was not prepared to accede to claims by the EU for “geographical indicators” for many EU food products. Conceding those indicators to the EU would have required many Australian producers of food to stop using descriptive terms which had been used for many years. Although the federal government continues to state that negotiations are ongoing, it is still not clear whether the FTA is dead or just resting. Ironically, New Zealand’s FTA with the EU commenced on 1 May 2024, although there has been significant debate as to the merits of that FTA.

Indo-Pacific Economic Framework Agreement

Australia is one of the 14 countries that commenced negotiations for an Indo-Pacific Economic Framework Agreement (IPEF). This is not considered an FTA in the traditional sense, as it does not deliver tariff reductions or other market-access provisions. Instead, the IPEF comprises negotiations on four core pillars of work. At this stage, there appears to be complete or substantial agreement on three of the four pillars, with negotiations continuing on the remaining pillar. Several other subsidiary agreements have been entered into pursuant to the pillars.

Ongoing Negotiations

Australia is continuing negotiations with the United Arab Emirates (UAE) for the Australia-UAE Comprehensive Economic Partnership Agreement and is considering entering negotiations for an FTA with the Gulf Cooperation Council. If the latter is to proceed, then the FTA with the UAE would be “rolled into” that agreement.

Conclusion

The Australian Free Trade Agenda has been a busy space for several years, and I have been fortunate to engage with DFAT on the negotiation process, focusing on Rules of Origin and related provisions to facilitate the operation of the FTAs. I have then been extensively involved in educating importers and exporters and their service providers (freight forwarders and licensed customs brokers) as to the terms of the FTAs and how to comply with the requirements to secure the intended benefits of the FTAs. I look forward to continuing that work in 2024.