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Monday, October 20, 2003

Australia sees export hike from Thai trade pact

Reuters
Canberra, October 20

Australia hailed on Monday the conclusion of a free trade pact with
Thailand, saying the agreement with its 12th largest export market would
significantly boost trade, particularly for its car and wine makers.

Prime Minister John Howard said the in-principle agreement, sealed with
Southeast Asia's second-biggest economy on Sunday, would tighten Australia's
trade ties in the region after talks to liberalise world trade collapsed in
Cancun, Mexico, last month.

This is Australia's third free trade pact. Canberra signed an agreement with
Singapore earlier this year and has a long-standing accord with trans-Tasman
neighbour New Zealand.

It is also in talks with the United States on a free trade deal.

"What we've achieved today is a real economic advance, a very important
economic agreement between two countries," Howard told Australian radio on
Monday from Bangkok, where he is attending the Asia Pacific Economic
Cooperation summit.

With world trade talks stumbling, the United States announced it would also
start talks with Thailand over a free trade pact.

Two-way trade between Australia and Thailand was valued at A$5.95 billion
($4.1 billion) in the year ended June 2003, according to the government
figures, weighed slightly in Thailand's favour.

Thailand is Australia's 12th largest export market, taking vehicles,
aluminium, cotton, copper, wool and dairy goods, and the 13th largest source
of imports, such as seafood, heating and cooling equipment, computers and
crude petroleum.

The deal will eliminate over half of Thailand's 5,000 tariffs on imports
from Australia when it comes into force within the next five months, with
virtually all other tariffs to go by 2010.

Howard said more than A$700 million ($480 million) of Australia's exports to
Thailand would benefit from the tariff cuts.

The deal includes the removal of an 80 per cent tariff on large-car exports,
halving tariffs on medium-sized passenger vehicles, and upfront tariff cuts
on wine -- more than 15 per cent of the current rate of about 55.2 per cent.
The deal will substantially improve access for Australian dairy products,
beef and pork, and axe tariffs on wheat and bakery products, wool, cotton,
lead, zinc and aluminium.

In turn Thailand will gain improved access for its textile and clothing
exports to Australia and preferential access for its light trucks.

Australia is hoping to use a visit by US President George W Bush this week
to add momentum to its talks with the United States, its second-largest
trading partner, for a free trade pact that the two nations hope to seal by
the end of the year.

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