Bigger chunk: Australia aims to double up trade with ASEAN

Australia aims to double its $187 billion trade with ASEAN compared to $300 billion with China, highlighting barriers and opportunities that both sides should work together to overcome as top leaders prepare to meet for the ASEAN-Australia Special Summit in Melbourne next month.

As part of a nine-day ASEAN-Australia Special Summit International Media Visit (IMV), journalists from Southeast Asia – Brunei, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Thailand, Timor-Leste, and Vietnam – had the opportunity to meet and discuss with Australian Minister for Trade and Tourism Don Farrell at Parliament House in Canberra.

During the interview, Minister Farrell emphasised the significance of trade connections with ASEAN nations, highlighting that while Australia is geographically part of the region, current trade activity falls short of its potential.

For instance, trade with China last year totalled $300 billion, whereas the entire trade with Southeast Asia amounted to only $187 billion, Farrell said.

“So we think we can do a lot more.”

He mentioned recent visits to Vietnam, Indonesia, and the Philippines, with plans to further engage with all Southeast Asian countries to strengthen trade links. He concluded by asking, “What can we do?”

ASEAN holds significant importance as a trading partner for Australia. In 2022, Australia’s bilateral trade with ASEAN nations reached approximately $178 billion, surpassing the trade volumes with Japan, the United States, or the EU. Moreover, the mutual investment with ASEAN in 2022 amounted to $289.7 billion.

Farrell highlighted numerous opportunities for collaboration between the two sides, particularly in agriculture.

He said his country cultivated a reputation for clean and sustainable practices, noting that Australia also produces an abundance of food beyond its domestic requirements.

With a relatively small population of 27 million people, Australia has the capacity to meet the protein demands of 70 or 80 million people, he added.

“So we want to engage in the region. And we look forward to the ASEAN conference as being one more step in the way where we engage in our region,” he said.

The robust trade connections are underpinned by both regional and bilateral free trade agreements. These agreements encompass the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) and the Regional Comprehensive Economic Partnership Agreement (RCEP), serving as avenues for Australian enterprises to access markets within ASEAN and the ASEAN Economic Community.

Responding to a question on specific measures Australia is planning to implement to further facilitate trade and investment flow between ASEAN and Australia, Farrell said the government has been implementing a “Southeast Asia Economic Strategy”.

In September last year, the Australian government unveiled its “Southeast Asia Economic Strategy to 2040”, designed to enhance the nation’s economic and trade partnerships with the region.

It is projected that by 2040, Southeast Asia will emerge as the world’s fourth-largest economy, experiencing a compound annual growth rate of four percent from 2023 to 2040.

“Through the strategy, Australians have been sent into the region, ‘boots on the ground’, to try and build those relationships and get the contracts that we need to increase our trading relationship,” he said.

According to Farrell, as a joint effort to boost trading, there will be a gathering of over 100 CEOs in Melbourne in the upcoming weeks, a mixture of Southeast Asian and Australian business leaders.

“We’re hopeful that will create some links that will build those trading relationships. In the past, we’ve relied too much on one trading partner,” he explained. “Now we want to broaden and diversify our trading relationships. And we see this region as being an important part of that.”

He suggested that both sides should be able to double trade by the end of the decade, saying Australia is looking forward to working with ASEAN to achieve these goals.

Farrell expressed confidence in strong relations as the leaders of both sides will attend the upcoming ASEAN-Australia Special Summit next month in Melbourne.

In terms of enhancing connectivity and resilience within ASEAN, Farrell highlighted some successful initiatives such as providing educational services to ASEAN students, working with the bloc to achieve renewable energy goals, and sharing new technologies.

“Australia intends to be a renewable superpower. We’ve got all the things we need to achieve that objective. And we want to work with you to achieve your goals,” he said.

He said Australia is lucky because it has either the largest or the second-largest reserves of all the critical minerals that are going to go into those new technologies of the future.

“So we need to work with Southeast Asia to ensure that we are producing all of the products that we’re going to need for a renewable future, a net zero future,” he said. “I think that will obviously be an important part of any of the discussions that are going to take place here in Melbourne in a few weeks’ time.”

The ASEAN-Australia FTA was signed on February 27, 2009. It aims to enhance trade and economic cooperation between the 10-nation bloc and Australia by reducing or eliminating tariffs and other trade barriers.

The agreement covers various aspects such as goods, services, investment, and intellectual property. By promoting trade liberalisation and facilitating smoother trade flows, the FTA fosters increased business activity, market access, and opportunities for exporters and investors from both ASEAN and Australia. Additionally, it encourages regional economic integration and strengthens diplomatic ties between the participating nations.

However, according to Farrell, two-way trade between the two sides is below $200 billion, indicating that “we don’t do enough trade”.

He said during the COVID-19 pandemic, there was no connection between Australian ministers and their ASEAN equivalents.

“So I think part of what now has to happen is we need to re-engage, and we need to re-engage face to face because it’s only really that face-to-face discussion that gives you the opportunity to meet and improve the relationships,” he emphasised.

He noted that he, Foreign Minister Penny Wong and Prime Minister Anthony Albanese have spent a lot of time in Southeast Asia building up those relationships.

Albanese will host the Special Summit in Melbourne from March 4-6, commemorating 50 years since Australia became ASEAN’s first Dialogue Partner.

It will be the second time Australia hosts leaders of ASEAN Member States.

In a recent interview with Khmer Times in Melbourne, Kung Phoak, Secretary of State at the Ministry of Foreign Affairs and International Cooperation and Cambodia’s ASEAN Senior Officials Meeting (SOM) Leader, said that at the upcoming Summit, the two sides will explore practical and comprehensive cooperation to advance the Comprehensive Strategic Partnership.

Phoak noted that the vision statement will be adopted, including the Melbourne Declaration.

In addition, during an interview in Canberra, Wong said Australia’s aspiration is “be the best dialogue partners we can be, the best comprehensive strategic partners we can be with ASEAN”.

Source:Khmer Times