PERTH (miningweekly.com) – The Australian resources sector has welcomed the signing of the Trans Pacific Partnership (TPP), with the Minerals Council of Australia (MCA) saying it was a significant reform that would assist in increasing economic growth and creating jobs.
Australian Trade Minister Andrew Robb was one of 12 signatories to the agreement, which would eliminate 98% of the tariffs among 12 countries.
The 12 TPP countries, which include among others Canada, the US, Japan, Chile, New Zealand and Peru, make up about 40% of global gross domestic product. In 2015, one-third of Australia's total goods and services exports, about A$109-billion, were sent to TPP countries.
Robb said that the agreement signalled enormous promise across both traditional areas of trade and investment, and so-called twenty-first century areas like e-commerce and global value chains.
“The tariff cuts will deliver material gains for our exporters across the board and place downward pressure on the cost of imported goods for households and businesses, but the benefits that will flow from the creation of a more seamless trading environment are not well understood,” Robb said.
“The embrace of paperless trading, streamlined customs procedures and trading rules, assistance for small and medium-sized enterprises, more seamless data flows and greater flexibility with data storage, are all features of the TPP. The agreement also contains provisions to help stimulate new investment and as experience shows, when you deepen trading relations increased investment inevitably follows.”
MCA CEO Brendan Pearson said on Thursday that importantly, the agreement would also lock-in the duty- and quota-free access that Australian minerals exporters currently enjoy into a number of TPP markets for major minerals exports, including coal, worth A$12.8-billion a year, and iron-ore, worth A$8.4-billion a year.
The TPP would further benefit Australia’s A$90-billion mining equipment, technologies and services (METS) sector.
Pearson pointed out that over 50% of METS companies export their goods and services, with current exports exceeding A$27-billion or about 30% of the sector’s revenues.
“The TPP will also facilitate the injection of capital and technology into the Australian minerals industry by raising the foreign investment screening threshold (except for uranium-related activities) from A$252-million to over A$1-billion.
“The minerals sector urges opposition parties to recognise the benefits that the TPP will bring in the form of economic stimulus and jobs and look forward to their support to pass the TPP legislation.”