SINGAPORE: An upgraded agreement between Asean, Australia and New Zealand entered into force on Monday (April 21), enhancing business opportunities across a free trade area of over 703 million people, with a combined gross domestic product of more than US$5.6 trillion.
The deal to upgrade the Asean-Australia-New Zealand Free Trade Area (AANZFTA) was signed in Indonesia in August 2023 to promote opportunities in areas such as e-commerce, investment, services, sustainable development, consumer protection and government procurement.
The agreement enters into force at a time when US President Donald Trump appears bent on reversing decades of globalisation in favour of his protectionist policies that carry the risk of slowing down trade and economic growth worldwide.
Singapore’s Ministry of Trade and Industry (MTI) said: “The upgrade reflects parties’ commitment to uphold an open, inclusive and rules-based multilateral trading system.”
MTI said the upgraded AANZFTA will boost supply chain resilience for essential goods and simplify rules of origin, the criteria used to determine a product’s country of origin for preferential tariff treatment.
This will ensure greater certainty on the flow of essential goods in times of crisis by expediting their movement, release and clearance.
MTI said the upgrade will ensure more sourcing options for businesses, and higher efficiency by streamlining documentation for transit and shipment of goods.
Meanwhile, regulations in professional, educational, financial and telecommunications services will also be made more transparent and business-friendly.
The pact aims to improve digital connectivity through the alignment of digital trade standards and e-invoicing. It will also boost cooperation among governments to help businesses capture opportunities in the green economy.
Dispute settlement processes will also be improved, with better protection for businesses and consumers.
Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong said: “Amidst the uncertainties in the global trade environment, this agreement is a bright spot demonstrating Asean, Australia and New Zealand’s commitment to an open, inclusive and rules-based multilateral trading system.”
He said the three partners will continue to help businesses, particularly small and medium-sized enterprises, manage disruptions and find new opportunities for growth across the free trade area.
The upgraded agreement also has a new chapter that promotes collaboration between governments to enhance the capabilities of micro, small and medium-sized enterprises and improve the business environment for them.
The original agreement establishing the AANZFTA entered into force in 2010. In 2023, Asean’s total trade in goods with Australia and New Zealand amounted to US$138.4 billion. - The Straits Times/ANN
