The ASEAN-Australia-New Zealand Free Trade Area
AANZFTA is an agreement between ASEAN member states: Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand, Viet Nam and the Philippines, New Zealand and Australia.
AANZFTA entered into force in 2010. The number of countries involved in AANZFTA and the length of time it’s been in force make this agreement a key pillar in our relationship with South East Asia.
In November 2022, we announced the conclusion of an upgrade of our existing free trade agreement with ASEAN to modernise it, further reduce barriers impacting exports, and boost trade in the region. The AANZFTA Upgrade was signed in Indonesia on 21 August 2023.
The economies involved
ASEAN is at the heart of the Indo-Pacific region and is one of New Zealand’s most important trading relationships: the bloc is New Zealand’s third largest two-way trading partner. With of a population of almost 700 million, ASEAN is one of the fastest growing markets in the world. Its GDP has more than doubled since 2010 (currently $5.9NZD trillion), and continues to grow with a predicted increase of 4.7% in 2024.
Collectively ASEAN is one of New Zealand’s top trading partners – our third-largest two-way trading partner after China and Australia. In 2023, New Zealand exported $9.2 billion worth of goods to the ASEAN region, accounting for almost 10% of New Zealand’s total goods exports.
Benefits of AANZFTA
AANZFTA has played a significant role in growing New Zealand trade in the ASEAN region. Since AANZFTA was implemented in 2010, two-way trade between New Zealand and ASEAN has doubled — an increase of more than $11 billion.
Goods exports to ASEAN alone have grown by over 74% in this period, making ASEAN in our top four export destination for goods following Australia, China and the US. In addition, service exports to ASEAN almost doubled between 2012 and 2023 from $866 million to $1.67 billion.
New Zealand has gained almost full elimination of tariffs on goods through AANZFTA and the other 6 FTAs across the region, meaning 99% of goods already enter duty free.
AANZFTA also enabled us to open our markets and grow our trade to six countries where we do not have bilateral free trade agreements — most notably Indonesia, Philippines and Viet Nam, but also Cambodia, Myanmar, Brunei and Laos. New Zealand now also has a free trade agreement with ASEAN through the Regional Comprehensive Economic Partnership (RCEP).
Origins of AANZFTA
AANZFTA was the first plurilateral free trade agreement negotiation embarked upon by New Zealand and Australia as a joint party. It was also the first time ASEAN embarked on comprehensive free trade agreement negotiations that covered all sectors simultaneously.
AANZFTA originated out of the wish to explore a link between the ASEAN Free Trade Area (AFTA) and the Australia-New Zealand Closer Economic Relations Trade Agreement (CER). This resulted in the AFTA-CER Closer Economic Partnership (CEP) Agreement. This agreement primarily sought to deepen economic integration through a work program focused on trade facilitation and capacity building, but offered little comprehensive trade coverage.
In 2004, leaders announced their decision to launch formal AANZFTA negotiations. The subsequent negotiations concluded in 2008, with AANZFTA entering into force for New Zealand in 2010 and for all remaining parties in January 2012. Although AANZFTA negotiations were conducted between Australia, New Zealand and ASEAN as an entity, the completed free trade agreement resulted in separate market access commitments for Australia, New Zealand and each of the ten ASEAN member countries.
At the same time as negotiating AANZFTA, New Zealand successfully concluded bilateral free trade agreement negotiations with Thailand (2005) and Malaysia (2010).
More recently, New Zealand has also been successful in entering into two further region agreements - the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) in addition to the Singapore Closer Economic Partnership (2018).
AANZFTA in action
The upgrade of our existing free trade agreement with ASEAN aims to modernise it, further reduce barriers impacting exports, and boost trade in the region. The upgrade will be discussed at a working level AANZFTA Joint Committee hosted by New Zealand in May 2024. New Zealand last hosted the AANZFTA Joint Committee in 2017.
Features of AANZFTA
Goods
AANZFTA has provided significant benefits for New Zealand exporters across a range of sectors, saving New Zealand exporters approximately $100 million in duties per year. As of 2020, AANZFTA has eliminated tariffs on 99 percent of New Zealand’s exports to Indonesia, Malaysia, the Philippines and Viet Nam. This includes the elimination of tariffs on New Zealand dairy, beef, forestry, apples and kiwifruit exports.
AANZFTA has further liberalised market access for New Zealand goods through Rules of Origin that allow for ‘cumulation’. This means that New Zealand goods used in the manufacture of products in ASEAN countries or Australia are considered local content, making New Zealand products an attractive supply option for businesses trading in the region.
Services
AANZFTA provides improved opportunities and greater access for New Zealand service providers in the region, particularly in the education sector. AANZFTA also includes commitments to ensure greater streamlined and transparent procedures for immigration applications and processes for business people working in the ASEAN region.
Investment
AANZFTA supports investment in the ASEAN region by ensuring better protection, transparency and security through a range of investment protection disciplines. AANZFTA provides a solid framework to increase investment between participants over time.
Economic Co-operation
Economic Co-operation through AANZFTA supports ASEAN, New Zealand and Australia’s economic partnership in trade or investment areas where we have mutual interests. New Zealand and Australia have been supporting Economic Co-operation through AANZFTA since the Agreement entered into force. Economic Cooperation under the Agreement enhances New Zealand’s partnership with ASEAN, supports the implementation of the agreement and supports exporters and communities to make the most of the benefits the Agreement has to offer. You can find out more about the AANZFTA Implementation Support Programme here.
Associated documents
Alongside agreeing the free trade agreement, New Zealand entered into arrangements with the Philippines and Viet Nam to allow temporary employment entry into New Zealand. New Zealand also implemented a Working Holiday Scheme with both countries.
National Interest Analysis
Every time the New Zealand government signs a new international treaty, a National Interest Analysis (NIA) is produced by the lead government agency. The NIA is then presented to Parliament, together with the text of the treaty for consideration.
Read the AANZFTA Upgrade NIA.