More duty free cars after TPP ratified

FORD, Holden, Audi and Volkswagen will be among the beneficiaries of Australia’s freshly ratified Trans-Pacific Partnership (TPP) free-trade agreement that is set to come into force at the end of this year.

 

Ford’s Canadian-made Endura large SUV – due to be launched in Australia in December – will now escape the five per cent import tariff, as will the Mexican-built Holden Equinox, Audi Q5 and Volkswagen Tiguan Allspace.

 

Australia became the sixth country to ratify the agreement, joining Canada, Japan, Mexico, New Zealand and Singapore in the first group to sign up for the wide-ranging pact that the Australian government predicts will generate annual benefits of up to $15.6 billion by 2030.

 

Ultimately, 11 countries are expected to join the agreement, although they will not include the United States after president Donald Trump pulled that country from the negotiations.

 

The TPP has been welcomed by Australia’s peak automotive industry body, the Federal Chamber of Automotive Industries (FCAI), whose chief executive Tony Weber described TPP-11 as the latest piece in the trade agreement jigsaw.

 

He said the agreement would lower prices for the latest automotive technologies for Australian consumers.

 

“The agreement also enhances opportunities for Australian technology to supply chains across the growing Asia-Pacific region,” he said.

 

Because Australia already has separate free-trade agreements with several of the countries in the Asia-Pacific region, including Japan, South Korea and Thailand, the main TPP benefit for automotive importers will apply to those bringing in cars from Canada and Mexico.

 

So far this year, 7930 Mexican-built vehicles have been sold in Australia, a rise of 237 per cent over the first nine months of last year, according to official VFACTS sales data.

 

The new agreement leaves Europe, the United Kingdom and Argentina as the last major motor vehicle sources to be burdened with import duty on its vehicles shipped to Australia.

 

Mr Weber called for all automotive import tariffs to be dumped, along with the luxury car tax.

 

The TPP-11 will kick in on December 30 when the first of two tariff reductions will apply. The second will apply three days later, on January 1.

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