Tariffs between Australia, New Zealand and the 10 countries of the Association of Southeast Asian Nations (ASEAN) will be wound back over the next decade under the deal, which started on January 1st.
Trade Minister Simon Crean said the deal provided "important opportunities" for Australian consumers to access cheaper goods.
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He denied it could jeopardise Australian jobs in areas such as textiles, clothing and footwear, where goods can be made more cheaply in Asia.
Mr Crean said Australia didn't want to compete on price in these areas and would focus instead on design, creativity and marketing.
"I think that we don't want to compete with the low-wage end of the scale. If we want to compete at that end, let's just throw up the white flag and say we want a low-wage economy," he told ABC Radio.
The ASEAN free trade deal would provide opportunities for Australian companies that produce cheese or lamb, or work in "smart manufactures", services and education, according to Mr Crean.
