Increased trade volume is expected to offset revenue losses from the zero duties on imports following the implementation of the ASEAN Australia New Zealand Free Trade Agreement (AANZFTA).

Bureau of Customs Commissioner Napoleon Morales said that with the tariff elimination scheme they would be collecting zero duties but said that expected increase in trade volume would make up for the losses.

“We would still be collecting value added tax and because of the expanded trade volume we would be collecting more,” Morales said.

Trade and Industry Assistant Secretary for International Trade Group Ramon Vicente Kabigting said that total Philippine-Australia-New Zealand trade only accounts for a little less than 2 percent of the country’s global trade. The port of Manila exported 2,500 metric tons of imports value at $8 million to Australia and New Zealand.

As of January 1 this year, 96 percent of the country’s exports to Australia have gone down to zero and 80 percent for New Zealand. The AANZFTA will be completed by 2020, meaning all products are already at zero duty including dairy products, kiwi, canned pineapple juice, tuna and auto parts.

Other Philippine exports to the two countries include car batteries, parts and other accessories, coconut products, foodstuff, handicrafts, furniture and a host of other export goods.

At the media launch, Philippine exporters presented testimonials on their respective experiences under the new system, including Phelps Dodge International, Kemwerke and Nito Seiki to confirm the benefits of the AANZFTA.

Phelps Dodge alone said that the AANZFTA expects their exports to surge to $46 million this year from $1 million.

In a speech, Australian Ambassador Rod Smith noted that the AANZFTA is Australia’s largest free trade deal eliminating tariffs and other barriers to trade in goods, services and investment across a region that is home to more than 600 million people with annual GDP of 2.7 trillion US dollars.

On a bilateral basis, Smith said that Philippines accounts for just 2.8 percent of its trade with ASEAN. Two-way merchandize trade is worth $1.4 billion and total investment of $1.7 billion.

“We think there is more room for both countries to build on our trade relationship,” Smith said.

Other key component in the FTA is improved commitments on entry and stay for business people, professionals and skilled workers.

“The FTA is not static, and it provides a platform for further liberalization in the future, including a work program to improve investment market access,” the Ambassador said.

New Zealand Ambassador Andrew Matheson said that tariffs on New Zealand’s dairy exports to the Philippines will disappear in 2010.

Matheson said that tariffs on kiwi fruit and apples go in 2011, and on most beef products the year after that while wine will be free from 2015.

“This deal goes much further than just tariff elimination. That is why the AANZFTA is what’s called a comprehensive single undertaking. It is time the Philippines has entered into such as arrangement, and the first time ASEAN has done this,” said Matheson.