The AANZFTA, a comprehensive trade agreement, was modernized with the Second Protocol in 2025, streamlining customs, expanding digital trade, and enhancing competitiveness for regional businesses.
Modernization of AANZFTA
The ASEAN–Australia–New Zealand Free Trade Area (AANZFTA), established in 2009, is one of the region’s most comprehensive trade agreements. Over time, it has facilitated tariff reductions and fostered cross-regional commerce. The agreement’s first update in 2014 introduced some changes but retained its core structure. Recognizing the rapid growth of digital trade, ESG standards, and complex supply chains, a significant modernization was needed.
Introduction of the Second Protocol
Set to take effect in April 2025, the Second Protocol modernizes AANZFTA to better suit current trade realities. For example, a Vietnamese textile exporter sourcing wool from New Zealand can now treat both inputs as originating from the region. This simplifies qualifying for preferential tariffs when exporting garments to Australia, boosting competitiveness. The updates also streamline customs procedures, making cross-border trade more efficient.
Streamlined Customs and Trade Facilitation
The new protocol introduces paperless processing, clearer direct consignment rules, and faster clearance mechanisms. These changes align AANZFTA with global best practices, reducing transaction costs and friction points for businesses operating in ASEAN and Oceania. These improvements support just-in-time supply chains and expand opportunities for regional trade growth.
Read the original article : What the AANZFTA Second Protocol Means for ASEAN Trade
