When it comes to global trade opportunities for Australian exporters, free trade agreements (FTAs) play an important role. For any locally based business wishing to expand their international reach, they are a way of linking otherwise unconnected economies and establishing new markets for reciprocal exchange of goods and services, as well as investments.
Those in the business of international shipping from here in Australia have previously enjoyed seven different FTAs with countries across the globe, including New Zealand, Singapore, Thailand, US, Chile, the Association of South East Asian Nations (ASEAN) (with New Zealand) and Malaysia.
In addition to allowing trades of goods and services, FTAs also typically encompass a range of other trading potential, such as the exchange of intellectual property rights, government procurement and also competition policy.
All exporters in any industry that freights goods internationally can benefit from FTAs. The fashion, textiles & footwear freight industry for example, under these established FTAs, make up around 26% of Australia’s total trade – a substantial figure and one that is now set to grow further. The addition of FTAs for Japan and Korea will be of interest to Australian garment manufacturers and local fashion exporters.
Japan and Korea Add New Export Market Opportunities
In April 2014, those in the Australian export business were pleased that Australia signed an FTA with Korea.
In other positive news for the local retail industry, in July 2014, Australia also signed an Economic Partnership Agreement (EPA) with Japan. An EPA is an economic arrangement – often described as a premium variation of a general free trade agreement – that opens up free movement of goods, services and investment between countries. It’s good news for anyone in the business of fashion freight shipments, whether as an importer, or exporter of garments and other goods – but also a positive step for any local retailer or manufacturer keen to tap into a wider international audience.
Then, there are economic partnerships, which are sometimes described as high standard variants of free trade agreements.
Using the fashion industry again for a quick snapshot, at the moment, Korea accounts for around 5% of Australia’s total trade, with Japan accounting for around 11%. With the increasing number of FTAs currently in negotiation to help Australian exporters access new markets and expand trade in existing markets, this is expected to increase.
If you’re an existing Magellan Logistics client, currently enjoying the export and import opportunities for your business, we’d encourage you to actively review your current marketing plans and shipment strategies to analyse whether these latest FTAs will be of benefit for your business.
To find out how your business can benefit from these new Free Trade Agreements, speak to our trusted freight specialist team here at Magellan Logistics, for more information on 1300 651 888.