Scaling the Andes for free trade
The Age (Australia)
Scaling the Andes for free trade
Tim Colebatch, Canberra
December 9, 2006
ANOTHER day, another free trade negotiation. Two days after announcing a study into a free trade agreement with South Korea, Trade Minister Warren Truss revealed Australia will start negotiating an FTA with Chile.
Australia has previously rejected overtures by Chile for a free trade agreement, seeing it as a low priority given the distance between the two countries, the similarity in their export mix, the small size of the Chilean market and its low tariffs.
But yesterday, Mr Truss said talks would begin next year, with the aim of eventually concluding "a comprehensive and ambitious bilateral FTA".
"These talks will determine the scope for achieving a bilateral FTA that would eliminate barriers to trade in goods, improve conditions for services exports and investment, and deliver meaningful commercial outcomes," he said.
The announcement means the Howard Government is now engaged in eight negotiations or studies for free trade agreements with 21 countries.
The Government already has four FTA negotiations under way - with China, Malaysia, the 10-member ASEAN group, and the six-member (Persian) Gulf Co-operation Council. It also has exploratory studies under way with Japan, and now Korea. Australia has also completed FTAs with the US, Thailand and Singapore.
Its trade deficit with all three countries has worsened since the deals took effect.
Last year, Chile ranked only 46th among Australia’s export markets. It bought $188 million of our products, mostly coal, and sold us $136 million worth, mostly paper, pig iron and explosives. The second-richest country in Latin America after Argentina, it lives largely off copper exports, and applies a flat 6 per cent tariff to imports. But it is also a significant exporter of wine, fish and agricultural products and is trying to build a manufacturing export base.
