AUSTRALIA and the GCC countries may only be a few months away from signing a landmark Free Trade Agreement (FTA) deal “if a decision is made quickly,” with such a deal having multiple benefits for various Gulf-based businesses and stakeholders, said Australia Trade and Investment Minister Andrew Robb.
Speaking to Al Arabiya News in Dubai, Robb confirmed that in order to accelerate the signing of the FTA agreement, Australia is prepared to remove previous “road-blocks” such as car-tariffs and double taxation.
“Gulf states got 5 percent tariffs on imported cars... Free trade agreements normally remove protection. We had insisted previously that the [car] tariff must be removed. We now have all the international manufactures of the cars in Australia leaving Australia by 2017 so we can leave the car tariff in place,” said Robb.
“The double taxation is an agreement that if the Gulf states invest in companies in Australia they wouldn't get taxed in Australia and back in the Gulf states. So there will be no taxation. We won't have taxation in Australia; they will only have taxation in the countries that those companies come from,” he added.
Robb also said that there has been “lots of interest” from Australia regarding the imminent — and eagerly anticipated — opening up of the Saudi stock market for foreign investment and that such interest would be “turbo-charged” if Australia and the GCC signed a free trade deal.
Selling points
“If we were to begin a free trade agreement that would be one of the selling points that I would be making back in Australia that here is an opportunity into [the] stock market. There has been a lot of interest from Australia [even] without the free trade agreement and I am sure that there will be doing best and diversifying the portfolio into that new stock exchange [opportunity].”
Australia initially started negotiating a FTA deal with the United Arab Emirates in 2005. However, the negotiations were halted in 2009 when the GCC decided to negotiate collectively.
However, Robb is still positive that the deal could be sealed soon and that such an agreement would “reinforce what has been a very long and standing relationship, [particularly that] there is so much happening in the economic scene between the Gulf States and Australia that we should capitalize on.”
The minister also said that there is much to gain for the region's states and businesses from entering into such an arrangement — including providing a gateway for Gulf countries to piggyback off Australia's existing free trade deal with China.
Food opportunity Also, an agreement would secure more scope for reliable, high-quality, foodstuffs from Australia. Agriculture makes up around 12 percent of Australia's GDP.
“We got a long standing relationship in delivering food to the Gulf states; we want to continue that, there is a lot of investment in agriculture and agribusiness sector in Australia. With the free trade agreement would accelerate this agreement and secondly what would certain increasingly is high quality services from Australia that now are starting to set up in the Gulf States in particularly the UAE.”
Additionally, Australia would bring world-class skills training to the region as well as providing profitable business opportunities back in his country, he said.
The United Arab Emirates is the first stop for Robb — who is here with a large delegation of Australian CEOs and businesspeople — to inaugurate AU MENA 2015, an annual conference which aims to boost trade and investment relations between Australia and the Middle East.
“We don't want [to put] all our eggs in the Asian basket,” he said. “We are very keen to continue to grow while maintaining a long standing and a very solid relation between Australia and the Gulf states and to make contributions to the efforts that Gulf States are making towards stability in the region; we feel responsibility in that regard and that is why we are in the anti-Daesh (so-called IS) coalition.”
