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Free Trade Agreements
Edward Jackson
Regional Trade Agreements Division
Department of Foreign Affairs and Trade
WHAT IS A FREE TRADE AGREEMENT?
A free trade agreement (FTA) is
an international treaty that
reduces or eliminates certain
barriers to trade and
investment.
FREE TRADE AGREEMENT BENEFITS FOR
AUSTRALIAN EXPORTING BUSINESSES
Tariff cuts and reduced regulations
deliver export opportunities
Greater access to more competitively
priced products and more investment
funds.
AUSTRALIA’S 13 FREE TRADE AGREEMENTS
4
New Zealand Singapore United States Thailand Chile AANZFTA
Malaysia Korea Japan China CPTPP Hong Kong Peru
KOREA - AUSTRALIA FREE TRADE AGREEMENT: BEEF EXPORTS
Prior to the Korea – Australia
FTA (KAFTA), the tariff on our
beef exports was 40 per cent.
This tariff has been reduced
under KAFTA to 21.3 per cent
in January 2020.
Australia’s exports of beef
grew to $1.4 billion in 2019.0
200
400
600
800
1000
1200
1400
1600
2014 2015 2016 2017 2018 2019
KAFTA enters into
force in December
2014
COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR
TRANS-PACIFIC PARTNERSHIP: OUTCOMESGoods exports:
Services
exports:
FREE TRADE AGREEMENTS: YET TO ENTER INTO FORCE
Indonesia-Australia Comprehensive Economic Partnership Agreement
Pacific Agreement on Closer Economic Relations Plus
IA-CEPA
PACER Plus
INDONESIA-AUSTRALIA COMPREHENSIVE ECONOMIC
PARTNERSHIP AGREEMENT (IA-CEPA)
GOODS SERVICES
USING A FREE TRADE AGREEMENT
Preferential tariff outcomes from
free trade agreements do not
occur automatically.
Need to meet the “rules of
origin” and documentation
requirements.
USING FREE TRADE AGREEMENTS: CLAIMING A LOWER TARIFF
What you are exporting
How are your goods treated
Does the good meet the FTA rules of origin
Origin documentation
Claiming FTA tariff preference
1 52 3 4Determine the applicable
HS (tariff) Code
Use the HS (tariff) code to identify the tariff rate
Certificate or Declaration of Origin
Submit origin documentation to the importing customs authority
> > > >
PERU – AUSTRALIA FREE TRADE AGREEMENT:
CERTIFICATION REQUIREMENTS
• Claim for preferential access
by Certificate of Origin.
• No requirement for third party
certification.
• No prescribed format, but
needs to be in writing.
11
Peru
Comprehensive and Progressive Agreement for
Trans-Pacific Partnership – Certification requirements
• Claim for preferential tariff treatment using a Certification of Origin.
• No requirement for third party certification.
• No prescribed format, but must contain minimum data requirements
12
CURRENT AND FUTURE NEGOTIATIONS
1
3
Australia-European Union FTA negotiations
Pacific Alliance FTA negotiations
RCEP FTA negotiations
Australia-United KingdomFTA negotiations
FTA PORTAL: FTAPORTAL.DFAT.GOV.AU
The FTA Portal provides
easy-to-access information
about exporting and
importing goods and
services using Australia’s
free trade agreements.
FURTHER INFORMATION ON AUSTRALIA’S FREE TRADE
AGREEMENTS: FTA.GOV.AU
Sally Phillips
Manager, Free Trade Agreement Program,
Austrade
NEED MORE BUSINESS?
FTAs offer your clients a competitive edge in key markets
• Helping both importing and exporting SMEs take advantage of FTAs could be an additional service you offer your clients = more business for you
• Government agencies keen to help
Free Trade Agreements 17
WHAT DRIVES FTA UNDER-UTILISATION?
Do not have an
understanding of FTAs 1
Do not know to access an FTA
preference – many thought it
automatically applied5
Do not know how my business
can benefit from FTAs2
Believe that accessing FTA benefits is
too costly and burdensome 6
Do not know the Rules of Origin
requirements to access FTA
benefits3
Do not know how to comply with
FTAs, so avoid them4
INSIGHTS FROM THE BUYER
19
EXPORTER DOESN’T HAVE THE PAPER WORK IN ORDER:o No COO at the time of import - duty is paid upfronto COO becomes available later, but no refunds allowed
CHANGE IN COUNTRY SOURCES FOR MAJOR INPUTS:o RVC rule no longer qualifies but the COO is not updated o Importer forced to pay duty but price was negotiated on meeting FTA requirements o Overseas importer faced compliance risk, subject to increased customs interventions
HS CODES ARE NOT CORRECT or not accepted by local customs authorities. o Calls for advance rulings
EXPORTERS FOB FOCUSED o They don’t see themselves as exporters, rather their customer is an importer…. o Lost opportunity to optimise competiveness
WHAT DO YOU NEED FROM US?
20
So - we want to work with you to boost FTA use by
your exporting clients as much as possible
And we’d be keen to hear ideas from you.
Questions?
Free Trade Agreements 21
It is important that gains made
through free trade agreements and
other trade negotiations are not
eroded by non-tariff barriers
TAKING ACTION ON NON-TARIFF BARRIERSPRESENTER: LARA ADAMS, NON-TARIFF BARRIERS COORDINATION TEAM
Non-TARIFf BARRIER EXPLAINER VIDEO
Video
Definitions: what is a non-tariff Barrier?
Non-Tariff Barrier ACTION PLAN 24
Tariffs Non-Tariff Measures
Definitions: what is a non-tariff Barrier?
Non-Tariff Barrier ACTION PLAN 25
Tariffs Non-Tariff Measures
Non-Tariff
Barriers
Trade barrier EXPORT ASSISTANCE
• All Australian exports
• non-tariff measures
• non-tariff barriers
RED TAPE
QUANTITY RESTRICTIO
NS
SANITARY, PHYTOSANIT
ARY AND TECHNICAL
REGULATIONS
GOVERNMENT RULES/PROCED
URES
ARBITRARY RULES/DECISI
ONS
• Australian goods and services
• Foreign government policies, regulations and rules to regulate the consistency and quality of goods and services
• Unjustified trade restrictions affecting an industry
Agriculture: work with industry and
trading partners on
technical market access
Austrade: assist exporters directly
Industry, Science
Energy and Resources: assist industry and
resources sector
Foreign Affairs & Trade: works with governments
in trading partners to
shape trading environment
Australian
Government
and Industry
NTB Action Plan
Whole-of-government
efforts
Non-TARIFF BARRIERS Website
Non-Tariff Barrier ACTION PLAN 27
