Today';s successful conclusion of negotiations on an Australia-Thailand Free Trade Agreement represents a significant breakthrough with substantial benefits for Australian exporters.
More than half of Thailand';s five thousand tariffs will be eliminated as soon as the Agreement enters into force. Virtually all the remaining tariffs will be eliminated by 2010.
Over $700 million of Australia';s current exports to Thailand will benefit from the tariff cuts under the Agreement. Many Australian companies currently locked out of the Thai market will now enjoy new export opportunities.
The main elements of the Agreement include:
The immediate elimination of Thailand';s 80 per cent tariff on large passenger motor vehicles and an immediate reduction by more than a half in Thailand';s tariff on medium sized passenger motor vehicles.
Substantial additional access for a range of Australian dairy products including milk, cream and milk powder.
Upfront tariff cuts of more than 15 per cent for wine, paving the way for a significant increase in Australia';s wine exports to Thailand.
Immediate elimination of Thailand';s very high tariffs in many other areas of interest to Australia, including wheat and grains, bakery products and processed foods.
Upfront additional market access for Australian beef, pork and some dairy products, as well as key fruit and vegetable exports, such as grapes and mandarins.
Immediate tariff elimination for major exports such as wool, cotton, lead, zinc, aluminium and a number of steel products.
The FTA also provides a strong foundation for expansion in the services sector including the operation of Australian education institutions in the Thai market. It will substantially improve the environment for two-way investment.
Under the Agreement, Australian majority ownership of mining ventures will be assured. The Australian business community will also benefit from an easing of Thailand';s visa and work permit rules.
This Agreement, with the second largest economy in South East Asia, is a further symbol of Australia';s close economic integration with the countries of East Asia. The Agreement is Thailand';s first with a developed country. It positions Australian exporters to take advantage of a rapidly growing Thai economy and will also strengthen the linkages between Australia and the ASEAN Free Trade Area (AFTA).
For Australia';s motor vehicle manufacturers, wine exporters, processed food producers, the farm sector and the metals and mining industry, this is a breakthrough agreement which will deliver tangible export opportunities.
Under the Agreement Thailand has secured improved access to the Australian market in a number of areas. For example, Thailand will receive enhanced access for its textile and clothing exports which account for about two per cent of Australian imports in that sector. Thailand will also achieve preferential access to the Australian market for light trucks which are not produced in Australia.
I congratulate the Trade Minister, Mark Vaile, and his negotiating team for the outstanding work they have done to promote Australia';s trade interests in these negotiations.