Free Trade Agreement Australia and Vietnam

Free Trade Agreement between Australia and Vietnam: An Overview

The Free Trade Agreement (FTA) between Australia and Vietnam was signed on 15 March 2015 and entered into force on 12 December 2015. This agreement aims to eliminate tariffs on goods traded between the two countries and promote trade and investment.

What is a Free Trade Agreement?

A Free Trade Agreement (FTA) is a treaty between two or more countries that reduces barriers to trade and investment. These barriers include tariffs (taxes on imported or exported goods), quotas (limits on the amount of goods that can be traded), and other restrictions. FTAs aim to increase trade flows, promote economic growth, and create new business opportunities.

Benefits of the Australia-Vietnam FTA

The FTA between Australia and Vietnam has many benefits for both countries. These include:

1. Reduced Tariffs: The FTA eliminates tariffs on 99% of goods traded between Australia and Vietnam. This means that Australian exporters can sell their goods in Vietnam without paying tariffs, making their products more competitive in the Vietnamese market. Similarly, Vietnamese exporters can sell their goods in Australia without paying tariffs.

2. Increased Investment: The FTA also promotes investment between the two countries by removing barriers to investment and providing greater certainty for investors. This allows Australian businesses to invest in Vietnam and vice versa, leading to job creation and economic growth.

3. Improved Market Access: The FTA also provides improved market access for both countries` service providers. This means that Australian service providers, such as financial, education and legal services, can provide their services in Vietnam without restrictions. Vietnamese service providers can also provide their services in Australia.

4. Intellectual Property Protection: The FTA strengthens intellectual property protection in both countries. This includes copyright, trademarks, and patents, which protects businesses` intellectual property rights.

The Impact of the FTA on Australian and Vietnamese Industries

The FTA has had a positive impact on many Australian and Vietnamese industries. For example, the Australian agriculture industry has seen increased exports to Vietnam, particularly in beef, dairy, and horticulture products. The removal of tariffs on these products has made them more competitive in the Vietnamese market.

Similarly, the Vietnamese textile and footwear industry has benefited from the removal of tariffs on imports of fabrics and inputs from Australia. This has allowed the industry to access higher quality inputs at a lower cost, leading to increased competitiveness in the global market.

Conclusion

The Free Trade Agreement between Australia and Vietnam is a significant milestone in the bilateral relationship between the two countries. It provides many benefits to both countries by eliminating tariffs, promoting investment and improving market access. The FTA has also had a positive impact on key industries in both countries, leading to economic growth and job creation.