THE recently agreed updates to the ASEAN, Australia and New Zealand Free Trade Area (AANZFTA) deal are expected to accelerate the growth of micro, small, and medium enterprises (MSMEs) in the country, the Department of Trade and Industry (DTI) said.
“The substantial conclusion of the upgrade negotiations marks another milestone for both ASEAN and Australia-New Zealand, as we gain another high-quality free trade agreement (FTA),” Trade Secretary Alfredo E. Pascual said in a statement on Monday.
“The inclusion of a Chapter on Trade and Sustainable Development and MSMEs is expected to fuel inclusive growth and integration of businesses into the global value chain,” he added.
The DTI said the changes to the FTA modernize trade practices which level the playing field for small businesses.
The DTI said signatories plan to sign the second protocol amending the AANZFTA in 2023. Negotiations to update the FTA started in September 2020.
“ASEAN, Australia, and New Zealand introduced the inclusion of new Chapters on Government Procurement, MSMEs, and Trade and Sustainable Development to facilitate growth anchored on an inclusive and sustainable regional economy. With the inclusion of the new chapters, the upgraded AANZFTA is viewed to benefit both regions in a broad spectrum of areas,” the DTI said.
“Among others, the agreement will accelerate supply chain integration and resilience; ensure a smooth flow of essential goods during crises; deepen services and investment liberalization; and support electronic commerce and digital transformation,” it added.
The AANZFTA took effect for the Philippines in 2010. It is the first region-to-region trade agreement involving the ASEAN, Australia, and New Zealand.
According to the DTI, Australia and New Zealand were the 16th and 28th largest trading partners of the Philippines in 2021, with a combined trade value worth P2.64 billion.
It added that Australia was the 14th largest source of investment last year with P664.32 million. — Revin Mikhael D. Ochave