Asian Exporters Voice Support for Free Trade Agreements
Asian free trade agreements (FTAs) are providing the region’s exporters with a competitive edge despite their complexities, according to research conducted by the Economist Intelligence Unit (EIU) and sponsored by HSBC.
The findings are based on a survey conducted in the first quarter of 2014 of senior executives from 800 companies in Australia, China, Hong Kong, India, Indonesia, Malaysia, Singapore and Vietnam – with 100 participants from each country.
The survey resulted in three main findings about Asian FTAs. Firstly, complexity is holding back their usage: FTAs in Asia are used by only 26% of the region’s exporters on average, with the complexity of FTA terms and signing with unattractive markets are main reasons for not using FTAs.
Forty-four per cent of survey participants said they have limited or no understanding of FTAs, while half of these companies want to know more but don’t feel as though they are sufficiently publicised.
The second main finding was that despite the limitations FTA usage providing exporters with a competitive edge; with 86% of firms reporting that their exports have increased as a result of the FTAs they use; 79% agreeing that signing more FTAs will increase their exports and 69% agreeing that FTAs are the best hope for the future of their overseas business.
The third finding is that as a result, companies want more FTAs and believe they should be more ambitious; 78% want their governments to sign more FTAs and the same percentage want FTAs with more comprehensive provisions, while 73% want more support in terms of education and advice on FTAs.