Australia appears likely to sign a revised Trans-Pacific Partnership trade deal, ending the five per cent import duty imposed on cars from Mexico and Canada in the process.
The agreement, dubbed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, has been revived after a backflip from Justin Trudeau, Canadian Prime Minister, at the World Economic Forum in Davos, Switzerland.
Trudeau nixed an earlier iteration of the deal last year, in a move described as "disappointing" by Australian Trade Minister, Steven Ciobo.
Along with Canada and Australia, the agreement includes Japan, Mexico, Chile, New Zealand, Singapore, Malaysia, Peru, Brunei Darussalam and Vietnam.
Australia already has a free-trade agreement with Japan, but the five per cent import duty on cars built in Mexico and Canada would no longer apply under the revised proposal. The Holden Equinox and Audi Q5 are built in Mexico, while the upcoming Ford Endura is assembled in Canada.
"It makes cars sourced from Canada and Mexico cheaper, and I think that's obviously an advantage to consumers because they will get cheaper cars, and they will also get cars with more safety and environmental features," Tony Weber, chief executive of the Federal Chamber of Automotive Industries, told CarAdvice.
"It also puts impetus on removing the tariffs from those other jurisdictions which we don't have free-trade agreements with at the moment," he continued.
Although cars from the 11 Pacific Rim nations in the TPP would no longer be subject to import duties, vehicles manufactured in Europe, Great Britain, Argentina and China are still hit with taxes initially introduced to protect our now-defunct automotive industry.
"We are in discussions with the Europeans on a free-trade agreement," Weber said, but talks are being "delayed by the Brexit issue".
Rather than waiting for a full-blown deal, Weber called on the Federal Government to remove vehicle import tariffs "across the board", arguing the move would "benefit motorists by giving them cheaper cars with... the capacity to have greater safety and environmental features on them".