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CHINA IN SPOTLIGHT
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AseanAffairs Magazine November - December 2010
CONTENT • ASEAN TRADE
ASEAN AVIATION • ASEAN TRAVELLER
• ASEAN ENVIRONMENT

• BEYOND ASEAN 

• ASEAN MONEY  INSIDE OUT
• ASEAN TALK • CHINA IN SPOTLIGHT

China in Spotlight
The emerging role of China in the 21st century is a focal point for conjecture and a certain degree of apprehension in the world outside of China. Is China an ally, a competitor, an adversary or perhaps all three?

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AUSTRALIA-ASEAN TRADE
NEARS  A$100 BILLION

ASEAN AFFAIRS interview with Australian Ambassador to Asean
Ms. Gillian Bird
   Here the ambassador answers questions on a wide range of Australia- Asean issues.

Q: In 2008-09, two-way Australia- Asean trade totalled A$83billion. Will the 2009-10 trade figures top that, or has the recession put a temporary damper on trade?

A: Trade between Australia and ASEAN in 2008-09 was particularly robust. The global financial crisis had a limited impact on some areas of our trade, with total trade in goods falling by 6.1 percent in 2009-10. We would also expect Australia’s services trade with Asean to have fallen slightly in 2009-10 (it fell by 6.6 percent in 2009), but we expect a return to growth in both goods and services trade in 2010-11.

Ms. Gillian Bird

Australia was Asean’s first dialogue partner, starting in 1974. Ms. Bird was appointed Australia’s first ambassador to the Association of Southeast Asian Nations (ASEAN) in September 2008. Before taking up her position as Deputy Secretary in 2004, she served as First Assistant Secretary, International Division, Department of the Prime Minister and Cabinet. Prior to this appointment, she was Head, Foreign and Trade Policy White Paper Task Force (Advancing the National Interest), within the Department of Foreign Affairs and Trade.

Ms. Bird has occupied positions in the South and Southeast Asia Division, International Organisations and Legal Division; Peace, Arms Control and Disarmament Branch; and Executive Branch, Department of Foreign Affairs.

She has served overseas in New York, Harare and Paris. She has also worked with the Office of the Minister for Trade Negotiations. Ms. Bird joined the department in 1980.

Ms. Bird holds a bachelor’s degree (First Class Hons), University of Sydney, and is a graduate of French Ecole Nationale d’Administration.

While the global financial crisis did have a negative impact on some areas of our trade with Asean, other aspects of our trade relationship have showed strong growth. For example, Australia’s exports of travel services to Asean were valued at A$5.2 billion in 2009 (including a 21.5 percent rise in education-related travel services exports to A$3.4 billion) and have increased by an 10.2 percent per annum over the past five years. Similarly, Australia’s imports of travel services from Asean were valued at $4.4 billion in 2009 and have increased by an average of 14.4 percent per annum over the past five years.

Australia’s economy remained strong throughout the global financial crisis _ the only advanced economy to report positive through-the-year growth. We expect to see strong increases in two-way trade with Asean in the near future.

Q: Has trade continued to expand at 10 percent a year?

A: For the 10-year period up to 2008-09, Australia’s two-way trade in goods and services with Asean grew by an 9.7 percent per annum. But the figures for the last five years are even more impressive _ Australia’s two-way trade in goods and services with ASEAN grew an average of 14.2 percent per annum. Figures for the 10-year period to 2009-10 are not yet available, but we expect two-way trade in goods and services with Asean to have grown by an average of 9 percent per annum in that period.

Q: What Australian industry sectors have benefited from the FTA with Asean? Have there been any sectors that have had negative consequences?

A: The landmark Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) entered into force on 1 January this year. Covering over 610 million people and a combined GDP of A$3.1 trillion, AANZFTA is the largest Free Trade Agreement (FTA) Australia has entered into and is the most comprehensive FTA that Asean has signed.

As AANZFTA only entered into force this year and has still not yet entered into force for a few countries (including Indonesia which is a major trading partner for Australia), it is too early to make an assessment of its impacts.

AANZFTA contains significant tariff liberalisation commitments. Many applied tariffs were already low _ and would not have prevented trade, but early tariff elimination for these products should still provide some incentive for improved purchases of them by consumers or industrial users. For a range of other products, particularly a range of more elaborately-transformed manufactures, tariffs in some Asean countries have been quite high. We would therefore expect new trade opportunities to be created over time as these tariffs are reduced and, in most cases, eliminated.

Importantly, as a regional FTA, AANZFTA should encourage continued growth of regional supply chains, with firms looking to source raw materials and components from within the region. However, this will only happen if traders are able to easily move goods across borders – both imports and exports – and are not hindered by unnecessarily complex or burdensome trade administration and customs procedures. Some businesses have been expressing concern that they have not been able to make use of AANZFTA because of what they see as unnecessarily bureaucratic elements in administering the Agreement at the frontier.

Q: What service sectors in Australia have benefited from the FTA?

A: AANZFTA will promote greater certainty and transparency for Australian services exporters and investors in the region. A built-in review provision will ensure that further improvements can be negotiated over time as Asean countries progressively liberalise their services sectors. AANZFTA guarantees certain legal protections for Australian investment in the Asean region and contains regulatory disciplines that will help to facilitate more efficient movement of Australians seeking to travel to Asean countries for temporary business purposes.

 Q: Has there been interest in a larger Asian regional institution that might include, for example, India?

A: Australia has been active in promoting the concept of an Asia Pacific community to strengthen regional arrangements. A core objective of this initiative was that we have a meeting where all key regional leaders could gather to discuss the full array of political and economic issues, as well as security and strategic issues confronting the region................

 


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