The TPP delivers certainty and significant gains to Australian producers and exporters of resources and energy products.
The agreement locks in the duty- and quota-free access Australia currently enjoys into a number of TPP markets for major exports such as coal, iron ore and liquefied natural gas.
Other key market access gains include:
- Elimination of Vietnam’s tariffs on butanes, propane and liquefied natural gas within seven years of entry into force. Australian exports of these products to Vietnam were valued at AU$9 million in 2014
- Elimination of Vietnam’s 20 per cent tariff on petroleum (Australian petroleum exports to Vietnam were AU$11 million in 2014)
- Elimination of Peru’s tariffs on iron ore, copper and nickel upon entry into force of the TPP.
Australia’s mining equipment, technology and services (METS) and oilfield services sectors in countries like Vietnam, Malaysia, Mexico, Chile and Peru will gain several benefits. There will be major new commercial opportunities for Australia’s METS service providers, including through:
- Mexico’s liberalisation of its energy sector, which, for the first time will allow Australian companies to be able to bid to participate in the exploration, production, processing and distribution of oil, gas and geothermal resources.
- Brunei Darussalam and Vietnam locking in future reforms to local content regimes, or otherwise committing to a level playing field between Australian and foreign suppliers providing goods and services in the mining, oil and gas sectors.
- New rules on large state-owned enterprises like PETRONAS, PEMEX, VINACOMIN and PETROVIETNAM, which will help ensure that Australian goods and service providers can compete fairly for contracts.
- Prohibitions on the introduction of new export taxes and commitments for the elimination of existing export taxes in Malaysia and Vietnam, providing greater certainty for Australian mining and energy companies operating in these countries.
The TPP’s new rules on state-owned enterprises (SOEs) will level the playing field between Australia’s privately owned mining, oil and gas companies and the large SOEs that dominate these sectors in some TPP countries. The TPP will help ensure that the member countries do not provide financial support to their SOEs that would give them an unfair advantage over their Australian competitors.
Streamlined investment processes and greater protections
Greater investment protections and streamlined processes will help propel investment by Australian mining, oil and gas companies, METS and oilfield goods and service providers in TPP countries.
TPP countries have committed to not introducing new foreign investment screening regimes or have extended higher preferential investment screening thresholds to Australian investors. Australian investments into Canada of below CN$1.5 billion (currently AU$369 million) will be exempt from investment screening processes.