Weekly Update from the Executive Director, Michael Roberts [9 November 2018]
The recent signing by the Australian Government of the Comprehensive Progressive Agreement for Trans Pacific Partnerships (CPTPP) means that now a majority of the 11 countries have signed the Agreement, it will enter in to force on the 30th December 2018, 60 days from Australia’s signing date. Vietnam’s General Assembly have also approved the Agreement, with signing likely to occur within the next week. While there is much excitement about the opening of new markets and tariff reductions into countries like Japan, Canada, Mexico and Peru, some of which are entering into trade agreements with Australia and Vietnam for the first time, there is also plenty of reason to be optimistic about increased trade liberalisation between Australia and Vietnam, with the CPTPP providing further reductions on tariffs and other trade barriers between the two countries. Many Australian products, such as cotton and wool, will benefit from regional supply chain tariff reductions where garment production occurs in Vietnam and the subsequent product is sold into another CPTPP country, Japan for example. Other Vietnamese manufactured products that rely on regional supply chains, furniture and smartphones, being just two, will also benefit from cost reductions across CPTPP countries. Australian seafood exported to Vietnam will have the majority of tariffs removed on entry into force, with the remaining tariffs removed within four years, and in-quota tariffs on Vietnam’s WTO sugar quota will be removed on entry in to force.
Australian wine, a product very close to my heart, which currently endures tariffs of up to 59%, will also see a reduction to zero within 11 years of signing, or if I have anything to do with it, much faster than that.
This of course is a very brief snapshot of a 700 odd page document, but it is a major step in global trade liberalisation with the signatories representing around 13% of global GDP worth an estimated USD $10 trillion. In early 2019 AusCham will be presenting briefings on the CPTPP and the benefits and opportunities that it creates in partnership with our friends at the Canadian Chamber of Commerce and others. Stay tuned.
Australian Chamber of Commerce in Vietnam
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