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Automotive Industry Cautiously Welcomes Tpp Announcement

FCAI urges the Australian Government to ensure it achieves genuine reciprocal market access for Australian automotive manufacturers through bi-lateral and multi-lateral trade agreements. 

While FCAI welcomes the involvement of Australia in the Trans-Pacific Partnership (TPP), this endorsement is conditional upon the Australian Government gaining genuine equivalent access to overseas automotive markets as exists in the Australian automotive market. 

The TPP should be a comprehensive and high quality free trade agreement which must involve, not just reciprocal reductions in tariffs, but also address non-tariff barriers to trade. 

The Australian Government should ensure that all participants in these negotiations are willing and able to demonstrate action to remove NTBs before Australia engages in negotiations. 

The Australian automotive industry is one of the most open and competitive in the world. The average rate of automotive tariffs in Australia (around 3.5%) is lower than for most agricultural products. 

Australian consumers have benefitted from the reduction of trade barriers and imported cars now represent around 85% of new vehicles sold in Australia. 

Australian vehicle manufacturing jobs are dependent on achieving a level playing field. All trade agreements, including the TPP, must ensure that Australian-made cars have equivalent reciprocal access to overseas markets. 

Previous FTAs negotiated by Australia have not resulted in equivalent market access for automotive products. Non-tariff barriers in particular have been used to restrict or prevent the import of motor vehicles from Australia. 

Examples of non-tariffs barriers that countries use to protect their auto industries include the maintenance of a discriminatory tax structure, the frequent introduction of new technical barriers, non-WTO-compliant customs valuation methodologies, currency manipulation and direct/indirect actions that reinforce anti-import bias against imported cars such as subsidised interest rates on the purchase of domestically produced vehicles. 

Exports of Australian-made vehicles grew from 35,000 vehicles in 1996 to a record 162,000 vehicles in 2008, worth $5 billion in export income for Australia. Exports have been essential in sustaining local manufacturing production volumes and could continue to grow if the Australian Government is able to gain access for automotive exporters to overseas markets. 

The Australian automotive sector is at the forefront of the export of elaborately transformed goods and forms a vital part of a balanced economy. The industry employs around 60,000 people in Australia directly. 

Exports of Australian made vehicles are already under pressure due the strength of the Australian dollar, high costs and intense competition from other automotive manufacturing nations to attract investment into the next generation of low-emission vehicle technology and production. 

It is essential that any future trade agreements do not result in competitive disadvantage for Australian manufacturers. 

For further information contact:
Sheena Ireland, Communications Manager
P: 02 6229 8221
M: 0458 038 555
E: sheena.ireland@fcai.com.au