A Quick Guide to Australia's Free Trade Agreements
If you’re looking to import or export goods, it pays to understand Australia’s Free Trade Agreements or FTAs. These international agreements are designed to make it easier for Australian businesses to trade with partner countries by removing or reducing trade and investment barriers. There are currently 14 FTAs in place with more being negotiated.
Free trade agreements make it easier and more economical for importers to bring goods into Australia by reducing costs. FTAs reduce or eliminate tariffs for exporters and open up markets to encourage international trade and investment.
To help you make the most of FTAs, here’s a quick guide to what importers and exporters should know about Australia’s free trade agreements.
What are Free Trade Agreements or FTAs?
The Department of Foreign Affairs & Trade (DFAT) defines FTAs as “treaties between two or more countries designed to reduce or eliminate certain barriers to trade and investment, and to facilitate stronger trade and commercial ties between participating countries.”
FTAs are international agreements that make it easier for businesses in partner countries to do business by reducing tariffs, taxes and duties that would normally apply to imports and exports.
How many FTAs does Australia have?
Currently, Australia has 14 FTAs with 20 countries, with negotiations underway for additional agreements. Australia’s FTAs are a mix of bilateral agreements with single countries and regional FTAs involving multiple partners.
Which countries have FTAs with Australia?
Australia’s FTAs are focused on building closer ties with regional and trans-Pacific partners including:
● Canada
● Mexico
● China
● Japan
● United States of America
● South Korea
● Malaysia
● New Zealand
● Singapore
● Thailand
● Chile
● Hong Kong
● Indonesia
● Peru
● Brunei
● Cambodia
● Laos
● Myanmar
● Philippines
● Vietnam
What do FTAs cover?
FTAs cover economic arrangements to ease barriers for Australian businesses looking to trade overseas, whether that involves importing or exporting goods. FTAs reduce or eliminate tariffs, helping businesses pay less taxes and duties on goods they import or export. This benefits Australian businesses as well as businesses operating in partner countries.
How do FTAs benefit importers and exporters?
In addition to reducing the costs of importing or exporting goods with partner countries, FTAs also provide an enhanced opportunity for importers and exporters to:
● export and invest in overseas markets
● maintain their competitiveness and grow
● reduce import input costs
● attract overseas investors to Australia
However, to enjoy these benefits, importers and exporters need to prove their product originates in one of the countries covered by an FTA.
What should businesses do to get the most out of FTAs?
While FTAs are designed to make it easier for importers and exporters to trade internationally, you don’t always get the tariff cuts associated with FTAs automatically. That’s why it’s important to check DFAT’s Free Trade Agreement Portal to understand current FTAs, how you can use them and what they could mean for your business, now and in the future.
The Free Trade Agreement Portal helps you understand the current tariffs in place for your goods, if a tariff reduction applies and what you need to do to prove that your products meet the rules of origin requirements under the FTA. Without this certification, you won’t be able to access reduced tariffs for your products.
The portal also provides information about international markets, giving exporters valuable insights. The import market snapshot provides information on other import source countries, the size of the import market and recent trends for your product.
Where can importers & exporters get more information on FTAs?
Department of Foreign Affairs & Trade (DFAT) is the lead agency on FTAs and maintains the Free Trade Agreement Portal.
Austrade provides a range of services and assistance to Australian exporters, including running FTA Information Seminars.
The Australian Government Business website also has guidance for importers and exporters on getting the most out of FTAs.
Whether you’re an importer or an exporter, it’s vital to understand Australia’s current FTAs to ensure your business is getting the most benefit when you trade with partner countries.
Experienced customs brokers, PJ's Customs is here to guide importers through the customs and import process. To find out how we can help, drop into our Darwin office, email us logistics@pjscustoms.com.au or give us a call on 1300 395 760 for more information.