Free Trade Agreements: What they mean and how to unleash opportunities for businessAustralian Business Solutions Group

WELCOMEGreg Williamson

Queensland State Manager

Australian Business Solutions Group

Nationwide presenceAustralian Business Solutions Group has a nationwide presence across Australia serving 60,000 clients.

Experts in Business for Business

Where could your business really go?• Better customer experience

• Grow brand awareness and market share

• Enter new markets

• Secure the right talent and skills to achieve growth

• Create a strong employer/employee relationship to drive productivity

• Reduce workplace risk and legal liabilities

Today’s agenda > Official welcome

Greg Williamson, Queensland State Manager

> FTAs: What they mean & defining the size of opportunity in China, Korea, and JapanIan Bennett, Senior Manager, International Trade

> Export Growth China program Paula Martin, GM, Consulting & Solutions Sara Cheng, Manager, Greater China Region

> Access to finance Greg Williamson, Queensland State Manager

> Panel discussion

> Close

Trade Connection

We are closely connected to the international

chamber network of 6 million businesses connected via 12,000 chambers from 130 countries

Sample tables

FREE TRADE AGREEMENTS:WHAT THEY MEAN FOR BUSINESSIan Bennett

Senior Manager, International Trade

Our International Trade Team

17 experienced trade specialists

China, India, Middle East and South East Asia

Comprehensive international trade consulting services

Export documentation – i.e. Certificates of Origin

Unique Export Readiness diagnostic

Trade events and trade missions

Business interpretation services – i.e. overseas missions

Trade knowledge centre

Australia’s Export DestinationsAustralia's top 10 export markets (A$ million)

Goods Services Total % share Rank

China 77,973 6,662 84,635 28.1 1

Japan 46,481 2,101 48,582 16.1 2

Republic of

Korea

19,116 1,698 20,814 6.9 3

United States 9,022 5,507 14,529 4.8 4

India 11,418 1,844 13,262 4.4 5

New Zealand 7,309 3,559 10,868 3.6 6

Spore 6,420 3,584 10,004 3.3 7

UK 5,520 3,927 9,447 3.1 8

Taiwan 7,531 647 8,178 2.7 9

Malaysia 5,197 1,663 6,860 2.3 10

TOTAL 249,088 52,411 301,499

Based on DFAT STARS database, ABS catalogues 5368.0 (Sep 2014) and unpublished ABS data.

Australia’s Top Exports Iron ore & concentrates

Coal

Gold

Education-related travel services

Natural gas

Personal travel (excl. education)

services

Crude petroleum

Wheat

Aluminium ores

Copper ores & concentrates

Beef

Business travel services

Professional services

Technical & other business svcs

Medicaments (incl veterinary)

Aluminium

Copper

Refined petroleum

Cotton

Meat (excl beef)

Wool & other animal hair

Passenger transport services

Oil-seeds & oleaginous fruits, soft

Other transport services

Alcoholic beverages

The “Noodle Bowl”

Australian FTAs

ASEAN-Australia-New Zealand FTA

Australia-Chile FTA

Australia-New Zealand Closer Economic Relations

Australia-United States FTA

Malaysia-Australia FTA

Singapore-Australia FTA

Thailand-Australia FTA

Australia-Korea FTA

Australia-Japan FTA

Australian FTAs In ProgressFTA Status

Australia-China FTA Not yet in force

Australia-Gulf Cooperation Council (GCC)

Australia-India Comprehensive Economic Cooperation Agreement

Indonesia-Australia Comprehensive Economic Partnership Agreement

Trans-Pacific Partnership Agreement

Regional Comprehensive Economic Partnership(ASEAN, Australia, China, India, Japan, Republic of Korea and New Zealand)

Pacific Agreement on Closer Economic Relations (PACER)

Trade in Services Agreement

TAFTA vs AANZFTA

Country

Base

Rate

(2005

MFN)

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

2025

and

subseq

uent

years

Brunei 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Burma

(Myanmar) 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 10.0% 10.0% 5.0% 5.0% 5.0% 5.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Cambodia 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 5.0% 5.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Indonesia 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 18.8%

Laos 40.0% 40.0% 40.0% 35.0% 35.0% 30.0% 30.0% 25.0% 25.0% 20.0% 20.0% 20.0% 10.0% 10.0% 5.0% 0.0% 0.0% 0.0%

Malaysia 5.0% 3.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Philippines 10.0% 7.0% 5.0% 3.0% 3.0% 3.0% 3.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Singapore 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Thailand

(AANZFTA) 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Thailand

(TAFTA)30.0% 18.0% 15.0% 12.0% 9.0% 6.0% 3.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Vietnam 40.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 7.0% 5.0% 5.0% 3.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

HS Code: 0805.20Description: Mandarins

JAEPA JAEPA equals the best commitments Japan has

made in any of its other trade agreements.

Strong outcome for

Under JAEPA, both governments will support work towards enhanced mutual recognition of professional qualifications.

Beef

Fruit

Vegetables

Nuts

Wine

Seafood

Processed food and other commodities

JAEPA

Beef: Rapid tariff reductions providing significant competitive advantage over our major competitor - United States.

Wine: Elimination of the 15% tariff on bottled wine over 7 years.

Tariff on bulk wine eliminated immediately.

Cheese: Duty-free quotas for Australian cheese.

JAEPA

Dairy: Immediate and preferential duty-free access.

Fruit, Vegetables, Nuts & Juice: Fast tariff elimination on the majority.

Seafood: Tariffs on lobsters, crustaceans and shellfish immediately eliminated.

KAFTA A major market.

Best terms Korea has agreed with any trading partner.

Australian exporters have improved market access in goods and services, and investment protections.

84% of exports to Korea will enter duty free.

Duty free rises to 99.8% on full implementation.

Australia will remove remaining tariffs on Korean goods on entry when in force or over several years.

KAFTA

Beef: Progressive elimination of the 40% tariff over 15 years.

Cheese, butter and infant formula: Duty free quotas.

Wine: 15% tariff eliminated immediately.

Pharmaceutical products: Tariff-free entry (incl. vitamins).

KAFTA

Mandarins: 144% Tariff will be eliminated over 18 years (April to September each year).

Excluded from FTA: Rice, unhulled barley, milk powders, condensed milk, some abalone, apples, pears.

Agricultural Safeguard Measures:

Year, Trigger Level (MT), Safeguard Duty (%).

KAFTA

Automotive parts: 8% tariffs eliminated immediately.

Australian services exporters: Best terms Korea has agreed with any trading partner.

Law Firms, Education, Engineering, Accountants, Telecomms providers and Financial Services: All get concessions.

.

KAFTA – Not-So-Good News

Agreement is 1,700+ pages long.

Contains 4,000+ separate product specific rules.

Another set of “origin rules”.

Korea’s FTAsIn effect: Korea-Chile

FTA

Korea-Singapore FTA

Korea-EFTA FTA

Korea-ASEAN FTA

Korea-India CEPA

Korea-EU FTA

Korea-Peru FTA

Korea-U.S. FTA

Under negotiation:

Korea-Canada FTA

Korea-Mexico FTA

Korea-GCC FTA

Korea-Australia FTA

Korea-New Zealand FTA

Korea-China FTA

Korea-Vietnam FTA

Korea-Indonesia FTA

Korea-China-Japan FTA

RCEP (Reg. Partnership)

Korea-Japan FTA

Concluded: Korea-Turkey Korea-Colombia

ChAFTA

Harnesses the opportunities of China’s changing economy.

Services – Best positioned to leverage emerging opportunities stemming from middle class expansion.

ChAFTA – Not Yet In ForceCovers:

Agriculture and food

Resources, Energy and Manufacturing

Services

Legal services

Financial services

Telecommunications services

Tourism and travel-related services

Health and aged care services

Education services + plus more sectors

ChAFTA Includes chapter on intellectual property that

reaffirms the parties’ existing international obligations.

Contains commitment to negotiate a reciprocal agreement on government procurement.

TPP - Trans-PacificPartnership Agreement The Trans-Pacific Partnership Agreement (TPP) is

one possible pathway toward realising the vision of a free trade area of the Asia-Pacific.

Currently, 12 parties negotiating the TPP.

8 already have an FTA:

Brunei, Chile, Japan , Vietnam, United

States, Singapore, New Zealand, Malaysia.

3 new countries: Canada, Mexico, Peru

Will it happen?

If so, when?

What’s been negotiated?

What are the benefits for Australia?

What have we given away?

This is just the beginning of an even more complicated “Noodle bowl”

TPP - Trans-PacificPartnership Agreement

All Is Not Lost!

We have a “TRIAGE” department!

Our team of experts know how to help you through and “un-noodle” the bowl.

They issue all the certificates you need for your exports to be compliant with Australia's FTAs.

Used our services to obtain your certificates and face a problem at destination port?

We can assist with interactions with

foreign customs authorities, DFAT and others.

Export Documentation issued by ABSG

Certificate of Australian Origin

Declaration of Origin

JEAPA, KAFTA, TAFTA , AANZFTA & Chile-Australia FTA

Various Certificates incl. Certificate of Free Sale/ Manufacture/Analyses etc.

Export Docs Certification

VISA Letter Authorization for Saudi Arabia

ATA Carnet

EXPORT GROWTH CHINA PROGRAM Paula Martin

General Manager, Consulting & Solutions

Sara Cheng

Manager, Greater China Region

Australia in the Asian Century

GDP: US$9.240 trillion

US$6,807GDP per capita

GDP growth: 7.7%

1.35 billion Population

Trade with Australia: AUD$150.9 billion

Source: The World Bank

Snapshot: The Chinese economy

China’s GDP per capita

0

10

20

30

40

50

60

70

80

90

100

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

Import from China

Export to China

AU$ bn

Source: Australian Statistics Bureau 2013

Australia – China Bilateral Trade

Services

Lifestyle services

Education for children, vocational training

Aged care, nursing homes

Tourism

Professional services: project management, advanced

technology

Products

Food and beverage

Health products

Products for children

Home decoration and renovation

Fashion, Jewellery and accessories

What is in demand in China?

Removal of tariffs to increase market competitiveness of Australian products

Removal/reduction of investment barriers for Australian service companies to set up operation in China

Simplified procedure to facilitate products entry into China

Impact of FTA for Australia

Regulation

Language barriers

Culture

Size

Diversity

Why aren’t more businesses exporting?

Low risk

Low cost

Fully supported

What is Export Growth China

Export Growth China program

Assessment of Company Readiness

Export experience

Marketing

Budget

Resources

Strategy / Planning / Vision

China specific export & business experience

Company background and ‘story’

Trademarks

OPTIONS

Present solution

Export Readiness Report

Assessment of Offering Readiness Regulations Branding & Design Qualities Current market USP

Technology Enabled Showroom

Actively driving buyer interest in China through:

Catalogue launches

China Website

Social media e.g. WeChat

Ongoing events

Conduct roadshows throughout China

Shanghai Mart promotions and events

Promotion of Products and/or Services

600 mln registered users

438 mln monthly active users

WeChat dominates mobile messaging in China with 82% of the market

Is emerging as the new giant in China social media

Kick off: China Roadshow

Dedicated team based in China

Proactive targeting of potential buyers

Engaging current distribution networks

Utilising established connections

Active Buyer Matching

A comprehensive report will be prepared detailing:

Market insights and intelligence

Product /service feedback

Any potential opportunities

A list of interested buyers

Market report

Export Growth Pricing for Showroom – ex GST

Step 1: Program Registration

$4500 Program Registration Fee (includes x1 SKU) ($4950 Inc. GST)Program includes: Translation services, 1xSKU on display, diagnostic report, Buyer matching, Buyer matching report for 6 months

Step 2: Select your product

spaceStandard space

dimensions 450x450x450mm

$500 ($550 inc. GST)

Sml Product Space 450 x 450 x 450mm

$750 ($825 Inc. GST)Med Product Space450 x 900 x 450mm or 900 x 450 x 450mm

POA. Starting from $1000 (Plus GST)Lge Product

Space

$1000 Service

($1100 Inc. GST)

(Onscreen Only)

Step 3: Select number of

SKU’s$250 per additional SKU ($275 Inc. GST)

Step 4: Total Cost Step 1 + Step 2 + Step 3 = Program Cost

Renewal Charges: Renewal Fee $1000 ($1100 Inc. GST)(Includes existing SKU’s)

Plus any new or alterations to SKU’s

$250 per SKU ($275 Inc. GST)

Investment

Now

April

July - Dec

Chamber member applications

Commence first round of road shows in China

Officially launch the first rotation

Timeline

ACCESS TO FINANCE

Greg Williamson

Queensland State Manager

Research shows:

30% of SMEs feel that they have missed out on an opportunity due to a lack of credit.

Of the SMEs rejected for a loan:

55% felt rejection significantly constrained firm growth

21% felt that it significantly increased the chances of bankruptcy

18% had to lay off staff

Common mistakes that may hurt your application

1. Asking for more than needed

2. Rushing

3. Using business assets as

security

4. Inflating value

5. Credit history

How do you prepare for success? 1. Know your business plan

2. Shop around

3. Give yourself time to do

some homework

4. Timing

5. Find a specialist

6. Find the right tools

7. The interview

Meet Our Panel

Sara Cheng

Manager

Greater China Region

Alana Paterson

Special Counsel

Lawyers & Advisors

Greg Williamson

Queensland State Manager

Ian Bennett

Senior Manager

International Trade

Q&A

Email: absg@australianbusiness.com.au

MORE QUESTIONS?

THANK YOU