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Getting down to business in SE Asia

A new market of 600 million people with an estimated GDP of around US$ 2.7 trillion – an opportunity few businesses can afford to miss out on. Can you?

After coming into effect on January 10th 2010, the Australia-ASEAN-New Zealand Free Trade Agreement (AANZFTA) is the largest FTA Australia has ever concluded. With six out of ten ASEAN markets expected to grow at rates at least double the forecast OECD average in 2010, Asia is leading the global recovery after the economic downturn and there is great potential for Australian businesses to get a piece of the pie.

Why care? If your business is exporting or importing any product (or part of a product) from Brunei, Burma, Malaysia, the Philippines, Singapore or Vietnam, for instance, then you should care. The AANZFTA is the first such agreement covering all sectors, including intellectual property rights, investment, goods and services, ASEAN has ever negotiated.

Among tariff reductions, the AANZFTA includes new safeguard measures for investors, a decrease in restrictions to business travel within the region, as well as greater stability and certainty in the regulatory and legal environment of ASEAN.

Still not sure why this affects you? Let’s say you want to go on a business trip to Manila, maybe to explore future market entry opportunities, but you don’t have an established professional relationship with a local business yet. AANZFTA includes commitments on temporary business entry of natural persons such as service suppliers, goods sellers and investors that make it easier for you to get in and around the country without having to justify every step you are taking.

42 per cent of our total exporter base – around 18,500 Australian businesses – already trade with ASEAN. Make sure you don’t miss out.

Considerations for new exporters to SE Asia

When considering entry into any of the ASEAN markets, a company should firstly consider their own capability of interacting with new or different business and social cultures. Each SE Asian country has its own culture, resources and stage of business development.

If this is your first expansion into this region, you would be best advised consider Singapore, a highly developed country, with similar legal, banking and business structures to Australia. English is the language of business and many business executives have been educated in Australia or other western countries.

Many Singapore companies have extensive networks throughout ASEAN and to north Asia, which can assist in developing sales in this region. Malaysia is closely linked with Singapore trading activities and many companies have operation in both countries.

If you are considering doing business in SE Asia, contact:
Ian Bennett, Senior Manager International Trade on 02 9458 7443.
 


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Gary Dawes
Senior Consultant, International Trade
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