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Select Committee Report on ASEAN-Australia-New Zealand FTA

04 May 2009

On 8 April 2009, the Foreign Affairs, Defence and Trade Committee of the New Zealand Parliament reported back on the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA).  AANZFTA will enter into force on 1 July 2009, provided Australia, New Zealand and at least four ASEAN countries have notified completion of necessary domestic procedures by that date.  Otherwise, it will enter into force 60 days after the date by which such notifications have been made (see Chapter 18, Article 7).

The Select Committee’s Report – the last to involve Helen Clark – concludes that the Agreement “provides opportunities for New Zealand businesses to export goods and services to the region, and to invest throughout the region.  Most importantly, the agreement locks in current levels of access to ASEAN markets in the current economic climate, thus providing certainty to New Zealand businesses.  We believe that failure to conclude the agreement would have disadvantaged New Zealand, as the East Asia nations move towards trade integration.”  The Report is very short and offers only a generalised summary of the AANZFTA provisions, but appends a National Interest Analysis drafted by officials.  The Green Party offered a minority view expressing concern about (but no analysis of) four “serious downsides”, being: (a) increased risk of New Zealand factory closures; (b) the parts of the FTA liberalising trade in services and investment; (c) the possible detrimental effect of the Agreement on manufacturing in Asia (with reference to a report by Jane Kelsey); and (d) the Agreement’s application to Burma/Myanmar.

Surprisingly, the Committee received only eight written submissions and heard one oral submission.  This would seem to support the contention in the Treasury report referred to in Brief Counsel Connected Asia Pacific (NZ second round submissions in the WTO Apples Case), that awareness and engagement by New Zealand stakeholders with international trade and investment developments could be improved.   

The Select Committee is now reviewing the ASEAN-Australia-New Zealand Free Trade Bill, which will incorporate the AANZFTA into New Zealand law.  Submissions are due by 5 May 2009 and the Committee’s final report by 25 May 2009.