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Tue, Jul 06, 2004 - Page 12 News List

Australia and Thailand ink free-trade agreement

EYE ON ASEAN The pact is Canberra's second with a member of the Southeast Asian group and is seen as another step toward wider trade with the regional bloc

REUTERS , CANBERRA

Australian Prime Minister John Howard,right, shakes hands with Thai Prime Minister Thaksin Shinawatra after he signed the visitors book at Parliament House in Canberra yesterday ahead of the signing of a free trade deal.

PHOTO: EPA

Australia and Thailand signed a free-trade deal yesteday that could pave the way for the possible launch of free-trade talks between Australia and New Zealand and the ASEAN.

Prime Minister John Howard and his Thai counterpart Thaksin Shinawatra witnessed the signing of the deal in Canberra, after the Thai leader was greeted at Parliament House with a 19-gun salute.

Australia will eliminate tariffs on more than 5,000 items, or 83 percent of its imports from Thailand, including fruit, vegetables and automobiles. Thailand wipes out tariffs on 50 percent of the goods it imports from Australia, including fuel and chemical products.

The agreement is Australia's second with an ASEAN member after it signed a free trade deal with Singapore last year.

"The free-trade agreement is a good outcome for both countries," Howard told a joint news conference after a meeting during which the two leaders also discussed Iraq.

"The signing of this free-trade agreement is a further mark of our capacity and of our willingness and of our desire in every way to link our economy and our society as close as possible with the nations of our region," he said.

In April, ASEAN proposed launching free-trade talks with Australia and New Zealand by the end of this year, possibly at the ASEAN leaders' summit in Laos in Novem-ber, and trade ministers will meet in Jakarta on Sept. 4 to discuss the plan.

Australia, whose two-way trade with ASEAN totalled A$26 billion (US$18 billion) in 2002 to last year, has long sought free trade with ASEAN but had to settle in 2001 for talks on a closer economic partnership -- a looser trade framework short of tariff cuts.

"I see Australia as a strategic part of our neighborhood," Thaksin told reporters. "I hope the Australia-Thailand free-trade agreement will lead the way to other FTA's with other members of ASEAN as well."

Australian officials estimate the deal with Thailand will boost Australia's economy by A$2.5 billion over the next 20 years.

Australian Trade Minister Mark Vaile said: "By 2010, 95 percent of all current trade between Australia and Thailand will be completely free."

Trade between the two countries was valued at A$5.95 billion in the year to June 2003, weighted slightly in Thailand's favor, according to government figures.

Thailand is Australia's 12th-largest export market, taking vehicles, aluminum, cotton, copper, wool and dairy goods, and the 13th-largest source of imports, such as seafood, heating and cooling equipment, computers and crude oil.

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