The path to the ASEAN Free Trade Agreement

In late November 2004, leaders from ASEAN, Australia and New Zealand agreed to launch negotiations for an FTA involving the 10 countries of ASEAN, as well as Australia and New Zealand. Leaders agreed that the FTA would be comprehensive, covering trade in goods, services and investment. Negotiations began in early 2005 and, after 16 rounds of negotiations, were substantively concluded in late August 2008. The ASEAN FTA was signed in February 2009 and will enter into force on 1 January 2010 for (and between) the following countries: Australia, Brunei, Malaysia, Myanmar, New Zealand, the Philippines, Singapore and Viet Nam.

New Zealand has a long history of economic and trade cooperation with ASEAN. With more than 70 percent of New Zealand's trade and investment occurring in the Asia-Pacific region, the potential contribution to broader regional integration initiatives that flows from entering into a comprehensive FTA with ASEAN is expected to be significant.

New Zealand and each of the ASEAN economies (with the sole exception being Laos) are members of the World Trade Organization (WTO). Trade reform and liberalisation through negotiations at the WTO remains New Zealand's primary trade policy objective. Entering into a comprehensive FTA with ASEAN is expected to help maintain momentum and provide a "building block" towards New Zealand's wider goal of multilateral trade liberalisation.

At the regional level, seven ASEAN economies (Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Viet Nam) are also members of the Asia Pacific Economic Cooperation Forum (APEC). APEC continues to make progress in facilitating trade and opening markets in member economies.

Additionally, New Zealand and the ASEAN countries are all involved in the East Asia Summit (EAS) process. Within the EAS, a Comprehensive Economic Partnership for East Asia (CEPEA) is proposed. The ASEAN FTA will help support further progress on CEPEA.

Together, the 12 countries involved in the ASEAN FTA have a combined population of 566 million people and an estimated GDP exceeding US$700 billion. Agreement to move to FTA negotiations followed four years of economic and technical cooperation under the AFTA-CER Closer Economic Partnership - which had been agreed in 2000.