At the end of last month, Australia launched into negotiations for a new free-trade agreement with the Pacific Alliance – a regional trading bloc comprising of Mexico, Chile, Peru and Colombia. The four countries together account for 37 per cent of Latin America's population, 35 per cent of its nominal gross domestic profit (GDP), 46 per cent of its exports, and 50 per cent of its total imports.

The Pacific Alliance goods and services imports for 2016 were worth US$600 billion. Currently, Australia's ability to capitalise on this demand is limited by high tariffs. Tariffs of up to 80% are imposed on Australian beef, while dairy products and sugar attract tariffs of up to 45% and 30% respectively. An FTA will bring down these barriers and ensure that Australian businesses have competitive access to the market.

The Pacific Alliance is a growing market for Australian goods and services exporters. In 2016, total two-way trade in goods and services with Pacific Alliance members was worth $5.8 billion, more than double what it was ten years ago. An FTA with the Pacific Alliance will create new export opportunities for Australian farmers, miners, manufacturers, educators, service providers. It is also an attractive investment destination for Australia, with currently over 300 Australian businesses operating in the Pacific Alliance region.

This free trade agreement will allow Australian businesses to access the opportunities presented by the growing market, strengthen our economic relationship with Latin America and provide an opportunity for Australian businesses to diversify their export markets.