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The AANZFTA Treaty – Development of Trade and Relations Throughout Southeast Asia

For a number of island nations, the perceived notion of isolation implies that trade with other nations can prove challenging. In Southeast Asia, for example, resident nations have come to rely upon each other for goods, therefore it stands to reason that a trade agreement can benefit all involved. Nearly fifty years ago, the Association of Southeast Asian Nations was formed to improve the overall economic health of the region through joint participation in trade and development. Only recently have the ASEAN nations come together to expand relations with larger economies, namely Australia and New Zealand.


In early 2010, the ASEAN, Australia, New Zealand Free Trade Agreement was ratified by the following nations:

  • Australia - Australia is perhaps one of the largest countries in the southern hemisphere where mining is a primary industry. This nation exports coal and iron ores, in addition to livestock and beef. Their proximity to China and Japan afford these nations status as important trade partners.

  • Brunei Darussalam - An oil-rich nation, oil and natural gas rank among the country's largest export commodities. Japan, Indonesia, and Australia benefit from Brunei's petroleum production, which is one of the highest in the world.

  • Malaysia - One of Malaysia's top industries, computers and electronics, accounts for a good percentage of exports to the United States. The country also trades a variety of products with treaty partners Singapore and Thailand, including wood and petroleum and rubber.

  • Myanmar - Of the AANZFTA nations, Myanmar (Burma) has one of the smallest economies. The country relies heavily on trade with treaty partners, including Thailand, and exports mainly natural gas and wood products, seafood and rice.

  • New Zealand - New Zealand trades primarily with Australia, imports and exports. Largely agricultural in terms of outgoing commodities, New Zealand exports an average of $26 billion in dairy, meat, and fish.

  • The Philippines - This island nation maintains good trade relations with several countries, including the United States and Japan. Copper, electronics, and textiles are among the products exported.

  • Singapore - Like fellow AANZFTA members, Singapore also exports computers and accessories, and some petroleum products. Most of their trade, with the exception of the United States, is concentrated in Southeast Asia.

  • Vietnam - Vietnam is known for textile production, especially shoes and related athletic clothing. The country also exports some oil, wood products, and rice.

Subsequent entries into AANZFTA since the initial establishment have included:
  • Cambodia - Following years of internal conflict, Cambodia has worked in the early 21st century to improve trade. Agricultural commodities like timber, rubber, and seafood are popular exports, especially to the United States.

  • Indonesia - Most of Indonesia's outgoing trade is concentrated in Southeast Asia, with trade partners receiving the country's supply of natural gas, rubber, and textiles.

  • Laos - Laos produces timber products, coffee, and textiles to major export partners, which include AANZFTA members Thailand and Vietnam.

  • Thailand - While tourism is a major income generator for Thailand, the country ranks as a top exporter of rice. Other exports include fish and seafood, and textiles.

Goals of the treaty, aside from improving economies and trade across member borders, include protection of intellectual property and eCommerce interests. As we move deeper into the digital age, such concerns have become important as technology comes to the region. This may prove essential in 2015, when a proposed ASEAN Economic Community is established. This community is designed to unify the ASEAN nations involved in this trade agreement and create a single market and production base to meet the growing needs of member nations. A unified economy is also important in improving relations with outside economic powers.

With AANZFTA in force, the practice of lower tariffs in trade among member nations should assist those countries with smaller GDPs in obtaining needed goods and improving internal production. Modernization of business practices and the hope of extending relations beyond Southeast Asia may also benefit these smaller economies and eventually reduce the isolation of this region.


Published Mar 02 2012, 11:35 PM by admin
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