Semarang, 22 August 2023(TDI): In Semarang, Republic of Indonesia, the 28th ASEAN Economic Ministers – Closer Economic Relations (AEM-CER) Consultation took place on August 21. It marked the commencement of the signing of the 2nd Protocol to amend the agreement establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA).
Economic Ministers from four ASEAN Member States—Brunei Darussalam, Indonesia, Malaysia, and Singapore—joined their counterparts from Australia and New Zealand in signing this 2nd Protocol and the rest of the ASEAN Member States would sign it at a later time.
This amendment has modernized the original AANZFTA Agreement that came into force on January 1, 2010.
This signing demonstrates the parties’ determination to uphold the AANZFTA as the gold standard among ASEAN’s free trade agreements.
Furthermore, Dr Kao Kim Hourn, Secretary-General of ASEAN, highlighted the economic and strategic value of the AANZFTA, especially after its upgrade, in light of global uncertainties.
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This 2nd protocol marked the second amendment to the AANZFTA, following the initial agreement establishing the ASEAN-Australia-New Zealand Free Trade Area signed in February 2009.
The first Protocol, signed in August 2014, modified two chapters, Trade in Goods and Rules of Origin, as well as annexes on Operational Certification Procedures and Product Specific Rules (PSR).
The upgrade to the AANZFTA has not only modernized and expanded it but also made it resilient to future challenges and trade disruptions.
The 2nd Protocol enhanced 13 chapters from the original AANZFTA, including Rules of Origin, Customs Procedures and Trade Facilitation, Investment, Competition and Consumer Protection, and Electronic Commerce.
Additionally, three new chapters were added: Government Procurement, Micro, Small, and Medium Enterprises (MSMEs), and Trade and Sustainable Development. New provisions on education services under the Trade in Services chapter were also introduced.
These changes aim to improve efficiency, reduce transaction costs, strengthen supply chain resilience, promote digital technology use, enhance cooperation on trade and sustainable development, and facilitate the flow of essential goods during crises.
Economic cooperation would remain critical, especially for the least developed ASEAN Member States, to ensure the timely implementation of their commitments and obligations.
Additionally, MSMEs would benefit from these economic cooperation programs, which would promote technology adoption, support digital transformation and innovative start-ups, explore opportunities in new areas like the green economy, and build capacity to maximize FTA benefits.
The AANZFTA represents a market of around 711 million people with a combined GDP of US$ 5.9 trillion, based on data from the International Monetary Fund (IMF) and the World Economic Outlook as of April 2023.
Australia and New Zealand together have ranked as ASEAN’s eighth-largest trading partner.
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