PERTH (miningweekly.com) – The resources sector has welcomed recommendations from the Joint Standing Committee on Treaties (JSCOT) to ratify Australia’s free trade agreements (FTAs) with Indonesia and Hong Kong, saying it will grow trade in minerals and mining services.

The JSCOT earlier this week tabled a report on Australia’s proposed FTAs with Indonesia and Hong Kong, saying that Australia needed to stand up for the principle of free trade and shore up the foundations of the global trade system.

“While dealing with different issues and contexts, these free trade agreements will create new opportunities for Australian-owned businesses in the region, and help bolster the global trading system at a time of growing uncertainty,” committee chairperson Dave Sharma said.

Minerals Council of Australia CEO Tania Constable said that reducing barriers to trade and opening new markets was critical to supporting all Australians and would also provide an important buffer to economic and protectionist pressure.

“Australia needs free trade agreements to support and grow resources exports, which reached a record of A$273-billion in 2018/19 and accounted for 58% of Australia’s total exports. More broadly, trade has increased the income of the average Australian family household by an estimated A$8 448 a year. One in five Australian jobs are directly linked to trade – Australia is a trading nation.

“Liberalised trade with Indonesia and Hong Kong will increase trade and investment, benefiting Australia’s minerals industry and the mining, equipment, technology and services (METS) sector.”

Indonesia has agreed to reduce tariffs on iron-ore and steel, which are as high as 20%, to 5% or less by 2025, and will also allow Australian businesses to own up to 67% of mining services companies based in Indonesia, the first time Indonesia has ever made such a commitment in a trade agreement, providing significant opportunities for more than 140 Australian METS companies which export to Indonesia.

Australia’s exports to Hong Kong are dominated by gold, with gold exports worth A$7-billion in 2018, accounting for nearly 70% of Australia’s total exports to Hong Kong.

The FTA with Hong Kong locks in duty-free access for gold and other resources including iron-ore, coal and petroleum.