Upgraded ASEAN-Australia-New Zealand Free Trade Agreement comes into effect - Trade Treasury Payments

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Upgraded ASEAN-Australia-New Zealand Free Trade Agreement comes into effect

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The upgraded ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), which as ratified in Feburary, entered into force on Monday. 

The agreement, which is between ASEAN Member States (Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam), Australia and New Zealand, delivers extensive tariff reduction and greater certainty for services suppliers and investors.

The upgraded AANZFTA introduces several key enhancements, including simplified rules of origin, supply chain resilience mechanisms, a dedicated digital trade chapter, and sustainability commitments.

The Upgrade improves document processes for traders to access AANZFTA’s existing tariff preferences. These preferences reduce or eliminate tariffs on approximately 97.7% of all tariff lines for Australian exports, according to the Department of Foreign Affairs and Trade.

Other technical updates include improved treatment of back-to-back shipments, third-party invoicing, and ASEAN cumulation — all of which help reduce administrative barriers and support regional value chains.

The free trade area is home to some 663 million people and a combined GDP in excess of $4 trillion. 

AANZFTA originally came into effect in January 2010 and has since served as a foundational agreement for regional trade, covering 100% of Singapore’s trade with Australia and New Zealand. It remains the most comprehensive ASEAN-Plus agreement to date.

In a post on LinkedIn, Singapore’s Deputy Prime Minister and Minister for Trade and Industry, Gan Kim Yong, said, “Amidst global trade tensions and uncertainty, Singapore will press on to deepen our integration with like-minded economic partners. This upgrade reflects ASEAN, Australia and New Zealand’s shared commitment to a predictable, inclusive, transparent and rules-based multilateral trading system. It also reflects ASEAN’s commitment to deepen regional economic integration and collaboration with our Dialogue Partners and keep trade flowing across borders.”