Australia and Thailand have signed a free trade agreement, which is expected to boost both economies by billions of dollars over the next two decades.
Australian Prime Minister John Howard and his visiting Thai counterpart, Thaksin Shinawatra, were present for the signing of the free trade deal Monday in Canberra.
The Thai prime minister was welcomed at Parliament House in Canberra by a 19-gun salute. It is his country's first comprehensive free trade accord.
The agreement is to come into force early next year, under which Australia will cut 83 percent of its tariffs and Thailand will cut its duties by 50 percent.
Exceptions are in agriculture, where quotas will be gradually increased. Australia's makers of wine and beef and sugar producers will have to wait at least 10 more years for unfettered access to Thai markets.
Thailand's economy is one of the fastest growing in Southeast Asia, but it is highly protected by tariffs and quotas.
Australia's John Howard says this deal is a huge step forward. "The Free Trade Agreement is a good outcome for both countries. It's good for Australia and it's good for Thailand," he says. "Thailand's economy is strong. It is an economy that we were very ready to assist in the time of the Asian economic downturn. We continue to enjoy growing and improving relations with between our two nations."
Thai Prime Minister Thaksin Shinawatra stressed the benefits to Thailand - countering critics who accused him of ignoring public concern about making trade deals with larger, richer nations. He also thanked Australia.
"Our co-operation has never been more broad-based and strategic in nature," he said. "I just want to pay special tribute to Prime Minister Howard for his leadership and determination to deepen Australia's partnership with Thailand."
Some 95 percent of bilateral trade is expected to be tariff free by 2010.
Australia signed a similar deal with Singapore last year and hopes in November to discuss a regional free trade accord with the Association of Southeast Asian Nations - ASEAN.
Australia is also close to ratifying a free trade agreement with the United States.