Cabinet archives: Regional accords high on economic wish-list

John Howard’s cabinet took key decisions to ramp up its pursuit of free-trade agreements in 2000, singling out the US and the ASEAN grouping as key markets.

Former trade minister Mark Vaile lin September 2000. Picture: Alan Pryke

John Howard’s cabinet took key decisions to ramp up its pursuit of free-trade agreements in 2000, singling out the US and the ASEAN grouping as key markets where deals could be struck to advance Australia’s interests.

On August 14, 2000, the Howard cabinet resolved that Aus­tralia’s political and strategic interests would be “well served by negotiating a free-trade agreement with the 10 ASEAN members”, which included Indonesia, The Philippines, Vietnam, Thailand, Myanmar, Malaysia, Cambodia, Laos, Singapore and Brunei.

Trade minister Mark Vaile was given authority to agree to Australia entering a free-trade negotiation with both ASEAN and New Zealand at the October 6, 2000, meeting of ASEAN economic and trade ministers.

He was also given the green light to commence talks to secure a free-trade deal with Singapore and “explore the scope for bilateral or plurilateral FTAs with other interested ASEAN members such as Thailand”.

Mr Vaile and foreign minister Alexander Downer prepared a cabinet submission arguing the pursuit of trade deals would promote greater economic integration in the region and remove discrimination against Australian products. They cited a DFAT-commissioned study by the Centre for International Economics estimating that GDP gains for Australia from an FTA with ASEAN and New Zealand “would be $US19.1bn in discounted terms of the period 2000-20.”

In 1999, ASEAN accounted for $11.2bn of Australian exports, while tariffs affecting Australian exports were 15-20 per cent. The most protected sectors in ASEAN included automotives, unprocessed agriculture, processed foods and textiles.

Mr Vaile and Mr Downer noted in their submission that tariff reductions would have implications for the textiles, clothing and footwear and automotive industries in Australia. ASEAN nat­ions most supportive of a deal included Singapore, Thailand and Brunei while the attitudes of Indonesia, Malaysia and The Philippines were more likely to depend on “broader relations with Australia”.

The submission also identified another strategy to initiate bilateral FTAs with the most interested and economically significant ASEAN nations, with Singapore identified as the clear standout.

In November 2000, cabinet also agreed that Australia’s trade, economic, political and strategic interests would be served by negotiating a free-trade agreement with the US.

The Australia-US free-trade deal came into effect on January 1, 2005, while the agreement establishing the ASEAN-Australian-New Zealand free-trade area entered into force on January 1, 2010.