NATIONAL: Industry is preparing for a dramatically altered trading landscape following a free trade agreement (FTA) between Australasia and the ASEAN countries.
Signed in Thailand on February 27 by Minister for Trade Simon Crean, the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) takes effect on January 1 2010 - pending ratification from Australia, New Zealand and at least four out of the 10 ASEAN countries: Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Burma (Myanmar), Cambodia, Laos and Vietnam. It will lock in low or non-existent import tariffs for ASEAN countries including Vietnam - where duties will be cut by 85 percent and 96.4 percent respectively for Australia and New Zealand by 2010, before complete tariff exemption is granted by 2020.
Ann Poppelwell, owner of Sydney womenswear importer Simply Silk, which sources 70 per cent of its product from Vietnam, said businesses like hers would benefit from the FTA.
"If there were less or no duty it would really be a boost to my margins, particularly as the weak Australian dollar has pushed prices up by between 25 to 30 per cent in recent months."
However the agreement also meant increased competition for Australian TCF manufacturers, according to the Council of Textile and Fashion Industries of Australia (TFIA).
"Because of lack of infrastructure and regulation (non tariff barriers) Australian manufacturers will not have the same ease of access to Vietnamese markets that they have to Australia," said TFIA executive director Jo Kellock. "Come January 1 2010 TCF will be facing a convergence of drastically reduced tariff protection and a 60 per cent reduction in [funding] assistance - all in a global financial crisis."
Meanwhile Peter Kane, senior trade commissioner for export body Austrade, which regularly stages events promoting Australian fashion in the region, said fashion exporters should be prepared to take advantage of burgeoning export opportunities.
"Most textiles items that Australia exports to ASEAN will have their tariff levels phased to zero over the course of the FTA. This puts Australia at a competitive advantage over suppliers from other countries that don't enjoy similar levels of market access."
Indonesia and Singapore were ASEAN's biggest markets for Australian fashion, he said. Australian urban and streetwear were in strong demand in Singapore and Thailand, while Malaysia was a major buyer of Australian accessories, with Australian swimwear, resortwear and intimates popular in the Philippines.