After marking the tenth anniversary of ASEAN-Australia New Zealand Free Trade Agreements (AANZFTA) this year, we should reflect on what the agreement has accomplished. Since AANZFTA entered into force ten years ago, the deal had a significant impact on ASEAN economic development as a result of tariff cutbacks, access to markets, legal protections, dispute settlement mechanisms, and inclusive access for business persons. Exporters and importers have had a great opportunity to explore the broader business market regionally and internationally. Moreover, AANZFTA could help ASEAN to achieve shared prosperity goals
As the most comprehensive agreement in the ASEAN region, AANZFTA is envisaged to be much closer to the agenda in the Comprehensive and Progressive Agreement for Trans-Pacific-Partnership (CPTPP) in the future.
Melbourne became the host for an 11th meeting of the AANZFTA Joint Committee on April 28- May 3, 2019. One of the primary focuses was to upgrade some key points of economic development programs that were not only limited to trade in goods and services but also other strategic sectors. This meeting reviewed and consulted some possible improvements for the future potential of trade in goods, trade in services, investment, rules of origin, e-commerce and competition. The intended outcome of this meeting is to enhance access for businesses in the regions through more comprehensive economic cooperation.
ASEAN continues to offer compelling trade partners for many developed countries. The existing free trade agreements among countries such as Australia, China, India, Japan, New Zealand, and South Korea have generated substantial results. Canada is likely to be the next partner to establish an ASEAN-Canada free trade agreement and pursue a golden opportunity to enter a massive market of 640 million people.
One of the other important focuses in the meeting was to encourage the potential of e-commerce. The rapid growth of internet users and mobile devices in Southeast Asia have made e-commerce a primary means of facilitating trade. AANZFTA renegotiation shall explore the enormous opportunity for e-commerce platforms to enter markets across ASEAN nations. With over 640 million people in total, Southeast Asia’s digital market is projected to exceed $200 billion by 2025. This tremendous number will bring significant economic development to ASEAN countries. Six ASEAN countries; Indonesia, Thailand, Malaysia, Singapore, the Philippines, and Vietnam have already increased online transactions of products and services.
While digital commerce is projected to take off across the region, the market diversity of ASEAN makes the implementation of AANZFTA challenging. Australia and New Zealand have spent $30 million in various training programs to accelerate the application of the agreement, but it seems that disruptions in trade policy, a lack of organizational unity, and limited infrastructural capacity are still issues for some ASEAN countries. Digital platforms in e-commerce are expected to boost inclusive access and eliminate barriers in the market. Furthermore, the implementation of the AANZFTA e-commerce agenda should focus on developing innovation among e-commerce trading platforms.
The AANZFTA e-commerce trading platform will support the expansion of trade and facilitate cross border services. The platform will create business connections for sellers and buyers that will reduce intermediate steps for both parties, ensure competitive pricing, lower trade costs, and gain market exposure. The platform has been used in the ASEAN’s e-commerce gateway with China that has allowed ASEAN businesses to enter Chinese markets more efficiently and safely. Moreover, Malaysia has launched its first commodities e-commerce trading platform backed by the government. This platform will hopefully make cross-border trade more efficient and effective. AANZFTA member countries may wish to develop their own global trading systems through this e-commerce trading platform.
Despite the numerous advantages of e-commerce to AANZFTA, the implementation of e-commerce should address some key questions such as security and reliability of payment, strong data protection, the costs and capabilities of logistics providers, stable telecommunication infrastructure, efficient customs and border administration, inclusive access for the market, and robust regulatory frameworks. As developed countries, Australia, New Zealand, Singapore, and Brunei have a crucial role in making sure that AANZFTA will also bring about a shared economic benefit for other members. It is hoped that the AANZFTA agenda in e-commerce can accelerate inclusive and sustainable economic development and achieve shared prosperity for all members.
