Michael Danby (Melbourne Ports, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Trade. Will the minister update the House on the free trade talks of the Association of Southeast Asian Nations, ASEAN, and New Zealand?

Simon Crean (Hotham, Australian Labor Party, Minister for Trade) Share this | Link to this | Hansard source

I thank the honourable member for his question. I can indicate to the House that in Singapore last week Australia and New Zealand concluded a free trade agreement with ASEAN. This agreement is the most comprehensive free trade agreement that ASEAN has ever entered into. It is Australia’s largest free trade agreement; ASEAN as a whole is our largest trading partner, with some $71 billion in two-way trade between us and them. This is a larger trading partner than China, a larger trading partner than the US, a larger trading partner than Japan.

As for the agreement itself, it will liberalise commerce on up to 97 per cent of Australia’s current trade with key ASEAN partner markets by 2015, a significant advance on the Bogor 2020 time line. It covers all three major sectors—agriculture, manufacturing and services. In the case of agriculture it will cap tariffs and phase them out over time. In respect of manufacturing it will cover over 30 per cent of our manufacturing exports and eventually eliminate tariffs on manufactured goods such as machinery and parts, electrical equipment and instruments and gaming machines. Australian pharmaceutical products as well will be tariff free in a few years. As far as the services sector is concerned, there will be greater security and certainty for the banks and insurance companies. The agreement will improve entry for teaching staff, allow education providers to supply more courses and give telecommunications providers access to essential network services.

This is a very significant free trade agreement. It will provide not only new export opportunities but, significantly, capacity to create new jobs in this country. As well, whilst I was in Singapore, where Austrade has headquarters, I also had discussions with the Austrade regional manager for the ASEAN region and I have instructed Austrade to work with industry to develop a strategic plan for all the sectors of industry not only to have a better knowledge of what this agreement holds but to develop a strategic plan to properly take account of it.

This is a significant advance. Australia was left a woeful record in trade by the previous government. We inherited a trade performance of 72 consecutive months of trade deficits. Never before in the history of this country has a government presided over such a performance. And in the 11 years that the previous government was in office it was only able to have net exports contribute to economic growth in two of those years. Not only did it leave us high inflation which drove up interest rates; it left us a woeful trade performance. Labor has a plan and has started to implement it to turn around that woeful trade performance. This ASEAN free trade agreement is part of that plan.