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Leaders of Cambodia, the 2022 Chair of ASEAN, Brunei Darussalam, the ASEAN country coordinator for ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), Australia, and New Zealand, announced at the 40th and 41st ASEAN Summit the substantial conclusion of the negotiations for the AANZFTA upgrade as a key Priority Economic Deliverable of Cambodia’s Chairmanship of ASEAN.
Trade between ASEAN, Australia and New Zealand remained robust despite the global effects of the COVID-19 pandemic and geopolitical tensions. In 2021, the total merchandise trade between ASEAN and Australia reached US$ 81.6 billion, registering a year on-year increase by 49% that is higher than pre-COVID-19 rates. Meanwhile, merchandise trade between ASEAN and New Zealand in 2021 reached US$ 11 billion, growing by 22.5% year-on-year. In 2021, foreign direct investment (FDI) flows from Australia and New Zealand to ASEAN amounted to US$ 589 million.
The Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area, signed in Thailand on 27 February 2009, is being upgraded to ensure that it is fit-for-purpose and is future-proofed against emerging challenges. The upgrade also aims to maintain its high standard, remain relevant for businesses, enable it to effectively contribute to post-pandemic economic recovery efforts, and efficiently respond to global and regional challenges.
Businesses benefit from the AANZFTA upgrade through: improved transparency measures; lower costs and time for exports and imports; use of technological solutions for trade; cooperation in digital technology, sustainable development, and education services; increased participation of micro, small, and medium enterprises in economic activities, including government procurement; and smoother flow of essential goods during periods of crises.
Secretary-General of ASEAN Dato Lim Jock Hoi, one of the chief architects of the AANZFTA, welcomed the substantial conclusion of the negotiations for the AANZFTA upgrade. He further highlighted the AANZFTA’s instrumental role in strengthening not only the ASEAN-Australia Comprehensive Strategic Partnership and ASEAN-New Zealand Strategic Partnership, but also regional economic integration. “It is also a testament to the strength, durability and progressivity of an ASEAN-led regional economic architecture,” he added.