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Tariff timetables may get complicated

Dominion Post, Wellington

Tariff timetables may get complicated

11 April 2006

New Zealand will probably end up dealing with 10 schedules for the gradual phase-out of tariffs, one for each of the Asean countries.

That is the view of negotiators working on a multilateral free trade deal with Asean, a bloc of 10 Southeast Asian countries with more than 500 million people that takes more New Zealand exports than China.

When negotiations began in late 2004, it was hoped to have a comprehensive agreement by next March.

That deadline is still in place, but the Asean, Australian and New Zealand lead negotiators told a trade summit in Auckland yesterday that it was likely the 12 countries would have their own schedule for eliminating tariffs and putting in place investment rules.

The Asean countries’ schedules would apply to Australia and New Zealand but not each other. Australia and New Zealand’s schedules would apply only to Asean.

Foreign Affairs and Trade lead negotiator Martin Harvey said New Zealand would push for zero tariffs across the board but the broad range of interests involved would make this a challenge.

Australia’s lead negotiator, Michael Mugliston, said it wanted to maximise the amount of tariff lines at zero. "But we need to recognise that the Asean countries are at various stages of development," he said. "The FTA will be a living document and will evolve over time."

Asean’s Lim Jock Hoi said in some areas there may be just two schedules - for Asean and for Australia and New Zealand. "But in areas like services and investment there will probably be a number of schedules."

He suggested tariffs would be reduced over 10 years.

Mr Harvey said the Asean negotiations must not detract from deals New Zealand already has with Asean countries Singapore, Brunei and Thailand. "If the Asean agreement produces a greater level of obligation that will prevail."

Trade Minister Phil Goff described as having potential a suggestion that the Asean FTA may evolve into an East Asian economic community.

Japan has said it will ask Asean as well as China, South Korea, India, Australia and New Zealand to consider free trade talks in 2008 as a precursor to such a community.