A worker at a garment and textile factory.

Vietnam will have more opportunities to export its products to Australia and New Zealand after it signed a free trade agreement along with other ASEAN members, officials of both countries said Friday.

The agreement, slated to come into force early in 2010, was signed in February by the two countries and the Association of Southeast Asian Nations, a 10-nation grouping comprising Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

The agreement, known as the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), is aimed at bringing down barriers to trade as part of efforts to develop what has been called an ASEAN Economic Community. It covers an area with a combined population of 600 million and an estimated GDP of US$2.7 trillion.

Burchill noted that in 2005, Australia and New Zealand had cut 47.6 and 58.6 percent of their tariff lines respectively for products from Vietnam. This will increase to 96.4 and 84.7 percent respectively when AANZFTA takes effect.

He said the tariff-free commitment would be applied to fish and fish products, fresh and dried fruits and nuts, sugar, pulp and paper, wood and wood articles, plastics, minerals, textile and textile articles.

In turn, Vietnam has committed to tariff cuts on products like dairy, livestock, meat and automotive parts from next year but would achieve full tariff elimination later than its non-Asian counterparts.

The country would reduce by 5 percent a year its tariffs for dairy products with some products and livestock breeds enjoying tariff-free entry by 2016-2017.

Most tariffs on automotive parts would be eliminated or reduced to 5 percent by 2018.

Graham Sims, New Zealand consul general in Ho Chi Minh City, said the agreement would promote competitive advantages of each counterpart.

All members would benefit, but customers stand to gain the most, Sims said, responding to a comment that it was typically developed countries and not developing countries that benefited most from free trade agreements.

Nguyen Hong Ha, deputy director of Vietnam Chamber of Commerce and Industry in HCMC, said the two countries had relatively small markets but the agreement carried great potential for Vietnamese businesses to access them.

Ha said the free flow generated by the agreement would not only apply to products and services but also capital and skilled labor between developed and developing markets.

She said local businesses could use the agreement to widen their export base beyond traditional markets in Asia, Europe and the US.

Two-way trade including services between Australia and Vietnam grew an average of 22 percent a year over the last five years, reaching A$8 billion (US$6.4 billion) in 2007-2008, according to the Australian Department of Foreign Affairs and Trade.

The department said Vietnam exported products worth A$5.1 billion ($4.1 billion) and services worth A$524 million ($419 million) during this period.

Australia is set to recognize Vietnam’s Market Economy Status in the context of commitments made by the country under the AANZFTA agreement.

Bilateral trade between New Zealand and Vietnam was around $300 million last year, and the potential to expand this is high, officials said.

Reported by Minh Quang