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2016-2017-2018
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CUSTOMS AMENDMENT (COMPREHENSIVE AND PROGRESSIVE
AGREEMENT FOR TRANS-PACIFIC PARTNERSHIP IMPLEMENTATION)
BILL 2018
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Law Enforcement and Cyber Security,
the Honourable Angus Taylor MP)
CUSTOMS AMENDMENT (COMPREHENSIVE AND PROGRESSIVE
AGREEMENT FOR TRANS-PACIFIC PARTNERSHIP
IMPLEMENTATION) BILL 2018
OUTLINE
The purpose of the Customs Amendment (Comprehensive and Progressive
Agreement for Trans-Pacific Partnership Implementation) Bill 2018 (the Bill) is to
amend the Customs Act 1901 (the Customs Act) to introduce new rules of origin for
goods imported into Australia from a Party to the Comprehensive Agreement for
Trans-Pacific Partnership (the TPP-11).
The TPP-11 is a new treaty that incorporates, by reference, the provisions of the
original Trans-Pacific Partnership (the TPP) as signed by Ministers on
4 February 2016 in Auckland, New Zealand. Under the TPP-11, signatories will
implement the TPP between them, with the exception of a limited number of
provisions, which will be suspended. Suspensions will remain in place until the
Parties agree to end them, by consensus. The text of the TPP-11 is to be read in
conjunction with the text of the TPP.
The TPP-11 amendments contained in the Bill will enable eligible goods that satisfy
the new rules of origin to be entered into Australia at preferential rates of customs
duty. The amendments will also impose obligations on exporters of eligible goods to a
Party to the TPP-11 for which a preferential rate of customs duty is claimed, and on
manufacturers who produce such goods.
Complementary amendments will also be made to the Customs Tariff Act 1995 by the
Customs Tariff Amendment (Comprehensive and Progressive Agreement for
Trans-Pacific Partnership Implementation) Bill 2018, to give effect to the preferential
treatment of customs duty in accordance with the TPP-11.
FINANCIAL IMPACT STATEMENT
The cost of implementing TPP, signed on 4 February 2016, was included in
the 2016-17 Budget and was estimated to reduce customs duty collections by
$195 million over the forward estimates. The 2018-19 Budget estimated that there
would be no additional cost in implementing the TPP-11.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
A Statement of Compatibility with Human rights in respect of the amendments
contained in the Bill is at Attachment A. The Statement assesses the amendments to
be compatible with Australia's human rights obligations.
REGULATION IMPACT STATEMENT
A regulation impact statement in respect of all amendments to give effect to the new
rules of origin requirements in accordance with the TPP-11 and related preferential
treatment of customs duty is at Attachment B.
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CUSTOMS AMENDMENT (COMPREHENSIVE AND PROGRESSIVE
AGREEMENT FOR TRANS-PACIFIC PARTNERSHIP
IMPLEMENTATION) BILL 2018
NOTES ON CLAUSES
Clause 1 Short title
1. This clause provides for the 'Customs Amendment (Comprehensive and Progressive
Agreement for Trans-Pacific Partnership Implementation) Bill 2018' (the Bill), when
enacted, to be cited as the Customs Amendment (Comprehensive and Progressive
Agreement for Trans-Pacific Partnership Implementation) Act 2018.
Clause 2 Commencement
2. This clause sets out, in a table, the date on which provisions of the Bill, when enacted,
will commence.
3. Table item 1 provides for clauses 1 to 3 and anything in the Bill not elsewhere
covered by the table to commence on the day the Bill receives the Royal Assent.
4. Table item 2 provides for Schedule 1 of the Bill, when enacted, to commence on the
later of, the day the Bill receives the Royal Assent, and the day the Comprehensive
and Progressive Agreement for Trans-Pacific Partnership (TPP-11), done at Santiago
Chile on 8 March 2018, enters into force for Australia. However, the provisions do
not commence at all if the TPP-11 does not enter into force for Australia.
5. The TPP-11 will enter into force 60 days after the date on which at least six or at least
50 per cent of the number of signatories to the TPP-11, whichever is smaller, have
notified the Depository in writing of the completion of their applicable legal
procedures (i.e. ratified the TPP-11). For any signatory that is not among the ratifying
parties on the entry-into-force date, the TPP-11 shall enter into force 60 days after the
date on which that signatory has notified the Depositary in writing of the completion
of its applicable legal procedures.
6. The date on which the TPP-11 enters into force will be announced by the Minister for
Law Enforcement and Cyber Security by notifiable instrument, which has the same
meaning as in the Legislation Act 2003 (the Legislation Act).
Clause 3 Schedules
7. This clause enables the Schedule to the Bill, when enacted, to amend or repeal
provisions of legislation specified in that Schedule in accordance with the applicable
items. In the context of the Bill, the Customs Act 1901 (the Customs Act) is being
amended.
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Schedule 1-Amendments
Part 1-Trans-Pacific Partnership originating goods
Customs Act 1901
Introductory Comments
8. The TPP-11 was signed on 8 March 2018 in Santiago in Chile, by the Minister for
Trade, Tourism and Investment, the Hon. Steve Ciobo MP for Australia and by
representatives for Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New
Zealand, Singapore, and Vietnam.
9. The TPP-11 is a new treaty that incorporates, by reference, the provisions of the
original Trans-Pacific Partnership (the TPP) as signed by Ministers on
4 February 2016 in Auckland, New Zealand (Article 1 of the TPP-11 refers). By way
of an example, this means that Chapters 1 and 3 of the TPP are Chapters 1 and 3 of
the TPP-11.
10. On entry into force, the TPP-11 provides in part for new rules of origin to determine
'Trans-Pacific Partnership originating goods' and for the preferential treatment of
customs duty to apply to such goods. 'Trans-Pacific Partnership originating goods' in
accordance with the TPP-11 are those goods that satisfy the requirement in new
Division 1GB inserted by the Bill; see the notes on clauses below in respect of
relevant requirements.
Item 1 Subparagraph 105B(3)(b)(ii)
11. Section 105B of the Customs Act sets out circumstances where the liability to pay
import duty on excise-equivalent goods is wholly or partly extinguished. The liability
to pay import duty on excise-equivalent goods is wholly or partly extinguished in
circumstances where: the goods are entered for warehousing; the goods are used to
manufacture excisable goods; the goods are subject to customs control throughout the
manufacturing process; and the manufacturing occurs at a place that is both a
warehouse described in a warehouse notice granted under Part 5 of the Customs Act,
and a premises specified in a manufacturer licence granted under the Excise Act 1901.
12. 'Excise-equivalent goods' is defined in subsection 4(1) of the Customs Act to mean
goods prescribed by the regulations for the purposes of this definition. Section 9 of
the Customs Regulation 2015 (the Customs Regulation) provides that for the
definition of 'excise equivalent goods' in subsection 4(1) of the Customs Act, clause 1
of Schedule 1 prescribes for such goods.
13. However, under subsection 105B(3) of the Customs Act, those circumstances do not
apply to an amount of duty if the excise-equivalent goods are classified to
subheading 2207.20.10 (denatured ethanol) or 3826.00.10 (biodiesel) of Schedule 3 to
the Customs Tariff Act 1995 (the Customs Tariff Act), or an item in the table in
Schedule 4A, 5, 6, 7, 8, 9, 10, 11 or 12 to that Act that relates to a subheading
mentioned.
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14. As part of the implementation of the TPP-11, a separate Customs Tariff Amendment
(Comprehensive and Progressive Agreement for Trans-Pacific Partnership
Implementation) Bill 2018 (the Customs Tariff Amendment Bill) will insert new
Schedule 8B into the Customs Tariff Act. New Schedule 8B will provide for excise-
equivalent rates of duty on certain alcohol, tobacco, and fuel products in accordance
with the TPP-11, and the related preferential rates of customs duty.
15. This item amends subparagraph 105B(3)(b)(ii) of the Customs Act to insert a
reference to Schedule 8B of the Customs Tariff Act.
16. The purpose of this amendment is to ensure the collection of the correct customs duty
for biofuels and biofuel blends imported under the TPP-11.
Item 2 Subsection 105B(4) (paragraph (b) of the definition of biofuel blend)
17. Subsection 105B(4) of the Customs Act defines 'biofuel blend', in part, as goods
classified to certain subheadings under Schedule 3 of the Customs Tariff Act or an
item in the table in the Schedules relating to originating goods under Free Trade
Agreements (FTAs) that relate to the relevant subheadings.
18. This item amends the definition of 'biofuel blend' under subsection 105B(4) of the
Customs Act to insert a reference to new Schedule 8B of the Customs Tariff Act.
19. As for item 1, the purpose of this amendment is to ensure the collection of the correct
customs duty for biofuels and biofuel blends imported under the TPP-11.
Item 3 Before Division 1H of Part VIII
20. This item amends Part VIII of the Customs Act to insert new Division 1GB.
21. New Division 1GB is titled 'Trans-Pacific Partnership originating goods' and sets out
the new requirements for determining whether goods are Trans-Pacific Partnership
originating goods and therefore eligible for a preferential rate of customs duty under
the Customs Tariff Act, as amended by the Customs Tariff Amendment Bill. These
new rules give effect to Chapter 3 of the TPP-11.
22. New Division 1GB contains seven Subdivisions (Subdivision A to Subdivision G)
and they are set out below.
Subdivision A-Preliminary
23. Subdivision A contains a simplified outline of Division 1GB (new section 153ZKT)
and the interpretation provision for that Division (new section 153ZKU).
24. New section 153ZKT sets out a simplified outline of each of Subdivision B to
Subdivision G of Division 1GB.
25. New section 153ZKU sets out new definitions for the purposes of new Division 1GB
as follows (new subsection 153ZKU(1) refers):
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Agreement means the Comprehensive and Progressive Agreement for Trans-Pacific
Partnership, done at Santiago, Chile on 8 March 2018, as amended and in force for
Australia from time to time. Note 1 to this definition indicates that in 2018, the text of
the TPP-11 will be accessible through Australian Treaties Library on the AustLII
internet website.
As per the introductory comments at paragraphs 8 and 9 above, Article 1 of the
TPP-11 provides for provisions of the TPP (with the exception of a few Articles
specified in the TPP-11) to be incorporated into and made part of the TPP-11.
Therefore, Chapters in TPP becomes Chapters in the TPP-11. The purpose of note 2
under the definition of 'Agreement' is to reflect this and explain the relationship
between the TPP-11 and the TPP.
aquaculture has the meaning given by Article 3.1 of Chapter 3 of the TPP-11.
certification of origin means a certification that is in force and that complies with the
requirements of Article 3.20 of Chapter 3 of the TPP-11.
Convention means the International Convention on the Harmonized Commodity
Description and Coding System done at Brussels on 14 June 1983, as in force from
time to time. The note to this definition indicates that in 2018, the text of the
Convention is accessible through the Australian Treaties Library on the AustLII
internet website. This term is necessary and is referred to in the definition of
'Harmonized Commodity Description and Coding System'.
customs value of goods has the meaning given by section 159. In most cases, it will
be the transaction value but there are other valuation methods if this value cannot be
ascertained.
Harmonized Commodity Description and Coding System means the Harmonized
Commodity Description and Coding System (the HCDC System) that is established
by or under the Convention.
The HCDC System is the worldwide classification system that has been adopted by
all countries that are members of the World Customs Organization (WCO). In
Australia, the HCDC System has been adopted in the Customs Tariff Act.
The HCDC is a structure for classifying goods based on internationally agreed
descriptors for goods and related six-digit codes administered by the WCO. This six-
digit classification uniquely identifies all traded goods and commodities and is
uniform across all countries that have adopted the HCDC System. The WCO reviews
the system every five years to reflect changes in industry practice, technological
developments and evolving international trade patterns.
This term is referred to in the definition of 'Harmonized System' which sets out the
version of the HCDC System on which the TPP-11, particularly the product-specific
rules, is based.
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Harmonized System means:
(a) Harmonized Commodity Description and Coding System as in force
immediately before 1 January 2017; or
(b) if the table in Annex 3-D to Chapter 3, or in Annex 4-A to Chapter 4, of the
TPP-11 is amended or replaced to refer to Chapters, headings and subheadings
of a later version of the Harmonized Commodity Description and Coding
System--the later version of the Harmonized Commodity Description and
Coding System.
As per the notes for the definition of 'HCDC System', updates to that System are
undertaken every 5 years. The last review of the HCDC System (the fifth review) was
completed in June 2014 and related amendments made entered into force on
1 January 2017.
Australia, simultaneously on the entry into force date, implemented, and currently
uses, the latest HCDC System of 2017. Because the TPP-11 was negotiated based on
the HCDC System of 2012, it is necessary to specify the Harmonized System that is
required for the TPP-11. This is because the tariff classification codes set out in
Annex 3-D to Chapter 3, and in Annex 4-A, of the TPP-11, and incorporated by
reference into the Customs Act for the purpose of the new rules of origin, are those
codes from the HCDC System of 2012.
In light of this, the definition of 'Harmonized System' will expressly recognise, in the
Customs Act, the version of the HCDC System on which the TPP-11 was based, and
allow subsequent versions of that System to also be recognised when the relevant
Annexes to the TPP-11 are formally amended.
To avoid causing any disruption to international trade, Australia, through the
Department of Home Affairs, publishes the changes between HCDC System updates
and relevant concordance associated with those updates on its website, at no charge,
so that anyone can readily identify the appropriate tariff classification codes for goods
imported from other countries into Australia.
indirect materials means:
(a) goods or energy used in the production, testing or inspection of goods, but not
physically incorporated in the goods; or
(b) goods or energy used in the maintenance of buildings or the operation of
equipment associated with the production of goods;
including:
(c) fuel (within its ordinary meaning); and
(d) tools, dies and moulds; and
(e) spare parts and materials; and
(f) lubricants, greases, compounding materials and other similar goods; and
(g) gloves, glasses, footwear, clothing, safety equipment and supplies; and
(h) catalysts and solvents.
This term, together with the definition of 'originating material', new Subdivision C
and new Subdivision D give effect to Article 3.16 of new Chapter 3 of the TPP-11.
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Interpretation Rules means the General Rules (as in force from time to time) for the
Interpretation of the Harmonized System provided for by the Convention.
non-originating materials means goods that are not originating materials.
Non-originating materials are goods that are not originating materials because they do
not satisfy the requirements of new Division 1GB in their own right. For example,
where a shirt is manufactured by a Party to the TPP-11 from material produced in the
territory of that Party, and the buttons affixed to the shirt are produced in the Thailand
which is not a Party to the TPP-11, the material used to manufacture the shirt would
be originating and the buttons would be non-originating materials.
non-Party has the same meaning as it has in Chapter 3 of the TPP-11, which is a State
or separate customs territory that is not a Party to the TPP-11.
This term is necessary and is referred to in new section 153ZKZA, which deals with
the consignment of Trans-Pacific Partnership originating goods; specifically, the
circumstances in which goods are not Trans-Pacific Partnership originating goods
under Division 1GB if they are transported through the territory of one or more non-
Parties. See notes below for new subsection 153ZKZA.
originating materials means:
(a) goods that are originating under a law of a Party that implements the TPP-11
and that are used in the production of other goods; or
(b) recovered goods derived in the territory of one or more of the Parties and used
in the production of, and incorporated into, remanufactured goods; or
(c) indirect materials.
This term, together with new Subdivision C and new Subdivision D give effect to
Article 3.2 of Chapter 3 of the TPP-11.
Party has the meaning given by Article 1.3 of Chapter 1 of the TPP-11.
person of a Party has the meaning given by Article 1.3 of Chapter 1 of the TPP-11.
production has the meaning given by Article 3.1 of Chapter 3 to the TPP-11. That is,
production means the methods of obtaining goods including growing, cultivating,
raising, mining, harvesting, fishing, trapping, hunting, capturing, collecting, breeding,
extracting, aquaculture, gathering, manufacturing, processing or assembling a good.
The term 'production' is defined in the TPP-11 and the Bill as 'methods of obtaining
goods'. That definition includes an indicative list of the processes most likely to be
covered by the term. This list is non-exhaustive - the term 'production' is also
capable of capturing any other process that falls within the meaning of 'methods of
obtaining goods', including any currently existing methods that have not been listed
and any new methods which may arise in the future. The determining factor will be
whether something is a 'method of obtaining goods'.
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recovered goods means goods in the form of one or more individual parts that:
(a) have resulted from the disassembly of used goods; and
(b) have been cleaned, inspected, tested or processed as necessary for
improvement to sound working condition.
remanufactured goods means goods that:
(a) are classified to any of Chapters 84 to 90 (other than heading 84.18, 85.09,
85.10, 85.16 or 87.03 or subheading 8414.51, 8450.11, 8450.12, 8508.11
or 8517.11), or to heading 94.02, of the Harmonized System; and
(b) are entirely or partially composed of recovered goods; and
(c) have a similar life expectancy to, and perform the same as or similar to, new
goods:
i. that are so classified; and
ii. that are not composed of any recovered goods; and
(d) have a factory warranty similar to that applicable to such new goods.
territory, for a Party, has the meaning given by Article 1.3 Chapter 1 of the TPP-11.
textile or apparel good has the meaning given by Article 1.3 of Chapter 1 of the TPP-
11.
Trans-Pacific Partnership originating goods means goods that, under this Division,
are Trans-Pacific Partnership originating goods.
wholly formed, in relation to elastomeric yarn, has the same meaning as it has in the
TPP-11.
26. New subsection 153ZKU(2) provides that the value of goods for the purpose of
new Division 1GB is to be worked out in accordance with the regulations and that the
regulations may prescribe different valuation rules for different kinds of goods. The
value of goods is relevant, for example, in determining whether goods satisfy the de
minimis requirement in Article 3.11 of Chapter 3 of the TPP-11. The value of goods is
to be distinguished from the customs value of goods, which is to be worked out under
section 159 of the Customs Act.
27. New subsection 153ZKU(3) provides that in specifying tariff classifications for the
purposes of new Division 1GB, the regulations may refer to the Harmonized System.
The product specific rules of origin in Annex 3-D to Chapter 3, and in Annex 4-A to
Chapter 4, of the TPP-11 refer to the tariff classifications of the Harmonized System.
28. New subsection 153ZKU(4) provides that subsection 4(3A) of the Customs Act does
not apply for the purposes of new Division 1GB. Subsection 4(3A) provides that a
reference to the tariff classification under which goods are classified is a reference to
the heading in Schedule 3 to the Customs Tariff Act. This is a consequence of new
subsection 153ZKU(3).
29. New subsection 153ZKU(5) provides that, despite subsection 14(2) of the Legislation
Act, regulations made for the purposes of new Division 1GB may make provision in
relation to a matter by applying, adopting or incorporating, with or without
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modification, any matter contained in an instrument or other writing as in force or
existing from time to time. The subsection will override subsection 14(2) of the
Legislation Act should it be necessary in order to implement the TPP-11 by applying,
adopting or incorporating an instrument or other writing that is not an Act or
disallowable legislative instrument. Any instrument and other writing so incorporated
will be limited to those that are required for the operation of the TPP-11 and will be
accessible through the Department's website, and free of charge, to ensure they are
readily available and at no cost to persons concerned. For example, in implementing
other FTAs, this provision has enabled the regulations to refer to the general
accounting principles of a country other than Australia for the purposes of the
regional value content calculations.
30. New subsection 153ZKU(6) provides that the Minister (for Law Enforcement and
Cyber Security) must announce, by notifiable instrument, the day on which the TPP-
11 enters into force for a Party (other than Australia). This means that the Minister
will be required to publish by notifiable instrument the date the TPP-11 enters into
force for each Party to the TPP-11 (other than Australia). The notice for Australia
will be published in accordance with the commencement provision.
Subdivision B-Goods wholly obtained or produced entirely in the territory of
one or more of the Parties
31. Subdivision B contains new section 153ZKV, which sets out the rules in relation to
goods that are wholly obtained or produced entirely in the territory of one of more
Parties to the TPP-11.
32. New subsection 153ZKV(1) provides that goods are Trans-Pacific Partnership
originating goods if they are wholly obtained or produced entirely in the territory of
one or more of the Parties and either the importer of the goods has, at the time the
goods are imported, a certification of origin, or a copy of one, for the goods, or
Australia has waived the requirement for a certification of origin.
33. New subsection 153ZKV(2) provides that goods are wholly obtained or produced
entirely in the territory of one or more of the Parties if, and only if, the goods are:
(a) plants, or goods obtained from plants, that are grown, cultivated, harvested,
picked or gathered in the territory of one or more of the Parties; or
(b) live animals born and raised in the territory of one or more of the Parties; or
(c) goods obtained from live animals in the territory of one or more of the Parties;
or
(d) animals obtained by hunting, trapping, fishing, gathering or capturing in the
territory of one or more of the Parties; or
(e) goods obtained from aquaculture conducted in the territory of one or more of
the Parties; or
(f) minerals, or other naturally occurring substances, extracted or taken from the
territory of one or more of the Parties; or
(g) fish, shellfish or other marine life taken from the sea, seabed or subsoil
beneath the seabed:
i. outside the territories of the Parties; and
ii. outside the territorial sea of non-Parties in accordance with
international law;
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by vessels that are registered, listed or recorded with a Party and are entitled to
fly the flag of that Party; or
(h) goods produced, from goods referred to in paragraph (g), on board a factory
ship that is registered, listed or recorded with a Party and are entitled to fly the
flag of that Party; or
(i) goods, other than fish, shellfish or other marine life, taken by a Party, or a
person of a Party, from the seabed, or subsoil beneath the seabed, outside the
territories of the Parties, and beyond areas over which non-Parties exercise
jurisdiction, but only if that Party or person has the right to exploit that seabed
or subsoil in accordance with international law; or
(j) waste or scrap that:
i. has been derived from production in the territory of one or more of the
Parties; or
ii. has been derived from used goods that are collected in the territory of
one or more of the Parties and that are fit only for the recovery of raw
materials; or
(k) goods produced in the territory of one or more of the Parties, exclusively from
goods referred to in paragraphs (a) to (j) or from their derivatives.
34. New section 153ZKV gives effect to Articles 3.2(a), 3.3, 3.10(1), 3.20(1) and 3.23(b)
of Chapter 3 of the TPP-11 in respect of rules of origin for goods produced
exclusively from originating materials. The purpose of this new section is to enable
goods that satisfy relevant requirements to be subject to preferential treatment of
customs duty in accordance with the TPP-11.
Subdivision C-Goods produced from originating materials
35. Subdivision C contains new section 153ZKW, which sets out the rule for goods that
are produced entirely in the territory of one or more of the Parties from originating
materials only. Such goods are Trans-Pacific Partnership originating goods if the
importer has, at the time the goods are imported, a certification of origin, or a copy of
one, for the goods; or Australia has waived the requirement for a certification of
origin for the goods.
36. New section 153ZKW gives effect to Articles 3.2(b), 3.20(1) and 3.23(b) of Chapter 3
of the TPP-11 in respect of rules of origin for goods produced exclusively from
originating materials. The purpose of this new section is to enable goods that satisfy
relevant requirements to be subject to preferential treatment of customs duty in
accordance with the TPP-11.
Subdivision D-Goods produced from non-originating materials
37. Subdivision D contains new sections 153ZKX and 153ZKY.
38. New section 153ZKX deals with goods produced from non-originating materials and
provides (new subsection 153ZKX(1) refers) that goods are Trans-Pacific Partnership
originating goods if:
(a) they are classified to a Chapter, heading or subheading of the Harmonized
System that is covered by the table in Annex 3-D to Chapter 3, or in Annex 4-
A to Chapter 4, of the TPP-11; and
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(b) they are produced entirely in the territory of one or more of the Parties from
non-originating materials only or from non-originating materials and
originating materials; and
(c) the goods satisfy the requirements applicable to the goods in that Annex; and
(d) either:
i. the importer of the goods has, at the time the goods are imported, a
certification of origin, or a copy of one, for the goods; or
ii. Australia has waived the requirement for a certification of origin for
the goods.
39. Where goods covered by new subsection 153ZKX(1) are put in a set for retail sale,
further requirements are also applicable. For this reason, the note under the new
provision refers to new subsection 153ZKX(12) in respect of a limitation that applies
to set of goods for retail sale.
40. Where goods covered by new subsection 153ZKX(1) are a textile or apparel goods,
and without limiting the operation of new paragraph 153ZKX(1)(c), new
subsection 153ZKX(2) provides for paragraphs 7 and 9 of Article 4.2 of, and
Appendix 1 to Annex 4-A to Chapter 4 of the TPP-11 to have effect for the purposes
of determining whether paragraph 153ZKX(1)(c) is met.
41. Paragraph 7 of Article 4.2 deals with the treatment of short supply list materials, and
provides for a material listed in Appendix 1 that meets any requirement, including the
end use requirement, specified in that Appendix to be an originating good under
Article 3.2(c) of Chapter 3 to the TPP-11. Where the material concerned is marked as
temporary in Appendix 1, paragraph 9 of Article 4.2 provides that such materials may
be considered as originating under paragraph 7 of Article 4.2 for five years from the
date of entry into force of the TPP-11.
42. The purpose of new subsection 153ZKX(2) is to give effect to the applicable
requirements set out in paragraphs 7 and 9 of Article 4.2 of, and Appendix 1 to
Annex 4-A to, Chapter 4 of the TPP-11.
Change in tariff classification
43. New subsection 153ZKX(3) refers to the first of several provisions that may be
prescribed in regulations made for the purposes of Subdivision D. It provides that, if a
requirement that applies in relation to the goods is that all non-originating materials
used in the production of the goods must have undergone a particular change in tariff
classification, the regulations may prescribe when a non-originating material used in
the production of the goods is taken to satisfy the change in tariff classification.
44. The regulations made under this head of power include provisions to give effect to the
cumulative rules of origin contained in Article 3.10 of Chapter 3 of the TPP-11, which
apply where non-originating materials that are used or consumed in the production of
the good do not satisfy the change in tariff classification.
45. The concept of the change in tariff classification requirement applies to non-
originating materials. Goods that have been sourced outside a Party to the TPP-11 and
that are used in the production of other goods are non-originating materials. Goods
sourced from a Party to the TPP-11 that have not fulfilled the requirements of new
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Division 1GB and that are used in the production of other goods are also non-
originating materials.
46. Non-originating materials used to produce other goods may not have the same
classification under the Harmonized System as the final good. For example, non-
originating materials used to produce a good may be classified to one tariff
classification before the production process, and the final good may be classified
under a different tariff classification after the production process. To satisfy the
requirement of classification change, and therefore satisfy a requirement for the
purposes of claiming preferential treatment of customs duty in accordance with the
TPP-11, the goods concerned must be sufficiently transformed such that they can be
classified to a different tariff classification to that of the non-originating materials
from which they are produced.
47. For example, frozen fish fillets (classified to tariff code 0304) are produced from fish
caught in a party to the TPP-11 and combined with herbs and spices produced in
Thailand (which is not a Party to the TPP-11) (classified to tariff code 0907 to 0910)
to make crumbed fish fillets (classified to tariff code 1604 in Chapter 16 of the
Harmonized System). The applicable tariff change for crumbed fish is 'a change to
Chapter 16 from any other chapter'. As the herbs and spices are classified to
Chapter 9 of the Harmonized System, these non-originating materials meet the tariff
change requirement, considering that the fish concerned is the produce of a Party to
the TPP-11, and is therefore an originating material and is not required to change its
classification.
48. As per the above example, it is necessary for the tariff classification of the final good
and each of the goods that are non-originating materials used in the production of the
final goods to be known in order to determine the applicable change in tariff
classification.
Rules for goods that are not a textile or apparel good
49. New subsection 153ZKX(4) provides that, if:
(a) a requirement that applies in relation to the goods is that all non-originating
materials used in the production of the goods must have undergone a particular
change in tariff classification; and
(b) the goods are not a textile or apparel good; and
(c) one or more of the non-originating materials used in the production of the
goods do not satisfy the change in tariff classification;
then the requirement is taken to be satisfied if the total value of the non-
originating materials covered by paragraph (c) does not exceed 10% of the
customs value of the goods.
50. The provisions of subsection 153ZKX(4) incorporate the de minimis provisions that
are set out in Article 3.11 of Chapter 3 of the TPP 11. Therefore, even if all the
non-originating materials used to produce a final good do not satisfy a particular
change in tariff classification, the final goods may still be Trans-Pacific Partnership
originating goods because the change in tariff classification will be taken to be
satisfied.
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51. As new subsection 153ZKX(4) only deals with goods covered by new
subsection 153ZKX(1) that are not textile or apparel goods, the purpose of the note
under new subsection 153ZKX(4) is to indicate the other provisions that apply in
relation to goods that are textile or apparel goods.
52. New subsection 153ZKX(5) provides that in applying new subsection 153ZKZ(4)
non-originating materials covered by paragraphs (a), (b), (c), (d) or (e) of Annex 3-C
to Chapter 3 of the TPP-11 are to be disregarded in relation to non-originating
materials used in the production of goods.
53. Article 3.11.1 of Chapter 3 to the TPP-11 provides for goods contained in Annex 3-C
to Chapter 3 of the TPP-11 to be excluded from the de minimis requirement.
For example, non-originating dairy preparations containing over 10% by dry weight
of milk solids of subheading 1901.90 or 2106.90, used in the production of a good of
heading 04.01 through 04.06 other than a good of subheading 0402.10
through 0402.29 or 0406.30.
54. The purpose of new subsection 153ZKX(5) is to ensure only eligible goods are
subject to the de minimis requirement.
Rules for goods that are a textile or apparel good
55. New subsection 153ZKX(6) provides that, if:
(a) a requirement that applies in relation to the goods is that all non-originating
materials used in the production of the goods must have undergone a particular
change in tariff classification; and
(b) the goods are a textile or apparel good; and
(c) the goods are classified other than to Chapter 61, 62 or 63 of the Harmonized
System; and
(d) if the goods contain elastomeric yarn--the yarn is wholly formed in the
territory of one or more of the Parties; and
(e) one or more of the non-originating materials used in the production of the
goods do not satisfy the change in tariff classification;
then the requirement is taken to be satisfied if the total weight of the non-
originating materials covered by paragraph (e) does not exceed 10% of the total
weight of the goods.
56. This new provision gives effect to the de minimis requirement under Article 4.2.2 of
Chapter 4 of the TPP-11. Under the TPP-11, for goods that are textile of apparel
goods, Article 4.2.2 provides for the relevant threshold to be a maximum of 10% of
the total weight of the final goods.
57. Similar to the operation of new subsection 153ZKX(6), new subsection 153ZKX(7)
sets out a separate requirement that, if met, would provide for non-originating
materials that are textile or apparel goods and that are classified to Chapter 61, 62
or 63 (i.e. textile or apparel goods containing fibres or yarn) to be taken to satisfy the
change in tariff classification requirement.
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Regional value content
58. New subsection 153ZKX(8) provides that, if a requirement that applies in relation to
the goods is that the goods must have a regional value content of not less than a
particular percentage worked out in a particular way:
(a) the regional value content of the goods is to be worked out in accordance with
the TPP-11; or
(b) if the regulations prescribe how to work out the regional value content of the
goods--the regional value content of the goods is to be worked out in
accordance with the regulations.
59. This new provision provides the head of power to prescribe formulas for calculating
regional value content and in doing so gives effect to Article 3.5 of Chapter 3 of the
TPP-11.
60. New subsection 153ZKX(9) provides that, without limiting paragraph 8(b),
Appendix 1 to Annex 3-D to Chapter 3 of the TPP-11 has effect in working out if
materials used in the production of goods are originating materials or non-originating
materials.
61. Appendix 1 to Annex 3-D to Chapter 3 of the TPP-11sets out additional requirements
that are applicable to certain vehicles or parts of a vehicle. The purpose of new
subsection 153ZKX(9) is to give effect to the requirements in the relevant Appendix.
62. New subsection 153ZKX(10) provides that, if
(a) a requirement that applies in relation to the goods is that the goods must have
a regional value content of not less than a particular percentage worked out in
a particular way; and
(b) the goods are imported into Australia with accessories, spare parts, tools or
instructional or other information materials; and
(c) the accessories, spare parts, tools or instructional or other information
materials are classified with, delivered with and not invoiced separately from
the goods; and
(d) the types, quantities and value of the accessories, spare parts, tools or
instructional or other information materials are customary for the goods;
then the regulations must provide the value of the accessories, spare parts, tools or
instructional or other information materials to be taken into account for the
purposes of working out the regional value content of the goods (whether the
accessories, spare parts, tools or instructional or other information materials are
originating materials or non-originating).
63. The note to this section indicates that the value of the accessories, spare parts, tools or
instructional or other information materials is to be worked out in accordance with the
regulations: see subsection 153ZKU(2).
64. New subsection 153ZKX(10) provides for a head of power to prescribe regulations to
give effect to Article 3.13.1(b) of Chapter 3 of the TPP-11 in respect of the value of
the accessories, spare parts, tools or instructional or other information materials for
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working out regional value content. This new provision is necessary because such
goods would not normally form part of the value of materials that are used in the
production of the underlying goods.
65. New subsection 153ZKX(11) gives effect to Article 3.13.1(a) of Chapter 3 to the
TPP-11 and provides that, for the purposes of subsection 153ZKX(10), disregard
section 153ZKZ in working out whether the accessories, spare parts, tools or
instructional or other materials are originating materials or non-originating materials.
This provision ensures that consideration of applicable change in tariff classification
only applies to final goods produced from non-originating materials and not the
accessories, spare parts, tools or instructional or other information materials for the
final goods.
Goods put up in a set for retail sale
66. New subsection 153ZKX(12) gives effect to Article 3.17 of the TPP-11 and provides
that if:
(a) goods are put up in a set for retail sale; and
(b) the goods are classified in accordance with Rule 3(c) of the Interpretation
Rules;
the goods are Trans-Pacific Partnership originating goods under this section only
if:
(c) all of the goods in the set, when considered separately, are Trans-Pacific
Partnership originating goods; or
(d) the total customs value of the goods (if any) in the set that are not Trans-
Pacific Partnership originating goods does not exceed 10% of the customs
value of the set of goods.
67. This provision enables goods that are put up for retail sale and that comprised of
multiple components to be classified under two or more tariff headings under
Rule 3(c) of the General Rules for the Interpretation of the Harmonized System (the
Interpretation Rules). That is, when goods cannot be classified to a single heading or
subheading, they shall be classified under the heading or subheading which occurs
last in numerical order among those which equally merit consideration.
68. By way of an example, a mirror, brush and comb are put up in a set for retail sale.
This set is classified under Rule 3(c) of the Interpretation Rules according to the tariff
classification applicable to combs. This is because combs is the heading which occurs
last in numerical order among the three items concerned.
69. The effect of new paragraph 153ZKX(12)(c) is that the set will not be considered to
be Trans-Pacific Partnership originating goods unless all three of the goods in the set,
when considered separately, are such originating goods. However, if one or more of
the goods in the set is non-originating, then the set of goods may still be Trans-Pacific
Partnership originating goods under new paragraph 153ZKX(12)(d) if the value of the
non-originating goods does not exceed 10% of the customs value of the set of goods
concerned.
70. New section 153ZKY deals with packaging, materials and containers in accordance
with the TPP-11.
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71. New subsection 153ZKY(1) gives effect to Articles 3.14 and 3.15 of Chapter 3 of the
TPP-11 and provides that if:
(a) goods are packaged for retail sale in packaging material or a container; and
(b) the packaging material or container is classified with the goods in accordance
with Rule 5 of the Interpretation Rules;
then the packaging material or container is to be disregarded for the purposes of
this Subdivision.
72. This provision has effect that packaging materials or containers do not need to satisfy
the change in tariff classification requirement that may apply to the goods packaged
within the materials or containers.
73. However, in accordance with Article 3.14.2 Chapter 3 of the TPP-11, new
subsection 153ZKY(2) provides one exception to subsection 153ZKY(1). This
exception applies where the goods are required to have a regional value content of not
less than a particular percentage worked out in a particular way. In this context, the
regulations must provide for the value of the packaging material or container to be
taken into account for the purposes of working out the regional value content of the
goods (whether the packaging materials or container is an originating or non-
originating material).
74. Without this provision, the value of packaging materials or containers would not
normally form part of the value of the materials that are used in the production of the
goods. The value of packaging materials and containers for the purposes of this
section is to be worked out in accordance with the method that will be included in the
regulations.
75. The note to this section indicates that the value of packaging material or container is
to be worked out in accordance with the regulations: see subsection 153ZKU(2).
Subdivision E-goods that are accessories, spare parts, tools or instructional or
other information materials
76. Subdivision E contains new section 153ZKZ, which gives effect to Article 3.13 of
Chapter 3 to the TPP-11 and sets out a specific rule that applies to goods that are
accessories, spare parts, tools or instructional or other information materials.
77. New section 153ZKZ provides that goods are Trans-Pacific Partnership originating
goods if:
(a) they are accessories, spare parts, tools or instructional or other information
materials in relation to other goods; and
(b) the other goods are imported into Australia with the accessories, spare parts,
tools or instructional or other information materials; and
(c) the other goods are Trans-Pacific Partnership originating goods; and
(d) the accessories, spare parts, tools or instructional or other information
materials are classified with, delivered with and not invoiced separately from
the other goods; and
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(e) the types, quantities and value of the accessories, spare parts, tools or
instructional or other information materials are customary for the other goods.
78. Under this new provision, accessories, spare parts, tools or instructional or other
information materials in relation to other goods will be deemed Trans-Pacific
Partnership originating goods even if, in fact, they are non-originating goods,
provided all of the requirements in this new section are satisfied.
79. However, subsection 153ZKX(11) provides that for the purposes of
subsection 153ZX(10), section 153ZKZ is to be disregarded in working out whether
the accessories, spare parts, tools or instructional or other information materials are
originating materials or non-originating materials.
Subdivision F-Consignment
80. Subdivision F contains new section 153ZKZA, which deals with the consignment
requirements applicable to Trans-Pacific Partnership originating goods in accordance
with the TPP-11.
81. New subsection 153ZKZA(1) provides goods are not Trans-Pacific Partnership
originating goods under this Division if the goods are transported through the territory
of one or more non-Parties and either or both of the following apply:
(a) the goods undergo any operation in the territory of a non-Party (other than
unloading, reloading, separation from a bulk shipment, storing, labelling or
marking for the purpose of satisfying the requirements of Australia or any
other operation that is necessary to preserve the goods in good condition or to
transport the goods to the territory of Australia);
(b) while the goods are in the territory of a non-Party, the goods do not remain
under the control of the customs administration of the non-Party at all times.
82. New subsection 153ZKZA(2) provides that section 153ZKZA applies despite any
other provision of new Division 1GB.
83. This new provision gives effect to Article 3.18 of Chapter 3 of the TPP-11 which sets
out the consignment rules.
Subdivision G-Regulations
84. Subdivision G contains new section 153ZKZB, which provides a head of power to
prescribe regulations to make provisions for and in relation to determining whether
goods are Trans-Pacific Partnership originating goods under new Division 1GB.
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Part 2-Verification Powers
Customs Act 1901
Item 4 Before Division 4F of Part VI
85. This item amends Part VI of the Customs Act to insert new Division 4EB, which is
titled 'Exportation of goods to Parties to the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership'.
86. Division 4EB contains four new sections, these being sections 126AKI, 126AKJ,
126AKK and 126AKL. These new sections impose obligations on people who export
eligible goods to a Party to the TPP-11 and who wish to obtain preferential treatment
of customs duty in respect of those goods, and on people who produce such goods.
Section 126AKI Definitions
87. New section 126AKI defines the terms 'Agreement', 'customs administration',
'Party', 'producer', 'production', 'territory' and 'Trans-Pacific Partnership customs
official' for the purposes of new Division 4EB. With the exception to the terms
'customs administration' 'producer' and 'Trans-Pacific Partnership customs official',
the other terms have the same meaning as defined in new Division 1GB of Part VIII
of the Customs Act, inserted by item 3 of Part 1 of the Bill.
88. 'Customs administration' is defined under this section, as having the same meaning
given by Annex 1-A to Chapter 1 of the TPP-11. This term is referred to in the
definition of 'Trans-Pacific Partnership customs official' for the purposes of new
sections 126AKK and 126AKL.
89. 'Trans-Pacific Partnership customs official' is defined under this section, for a Party
to the TPP-11, to mean a person representing the customs administration of that Party.
This term is referred to in new section 126AKK and 126AKL.
Section 126AKJ Record keeping obligations
90. New section 126AKJ inserts a head of power to prescribe record keeping obligations
that will apply in respect of goods that are exported from Australia to a Party to the
TPP-11.
91. New subsection 126AKJ(1) enables regulations to prescribe record keeping
obligations that apply in relation to goods that are exported to the territory of a Party
and that are claimed to be originating under a law of that Party that implements the
TPP-11 for the purpose of obtaining a preferential tariff in that Party. Record keeping
obligation under the TPP-11 are broader than the general record keeping obligations
under the Customs Act.
92. It is intended that the method of keeping the documents, such as the length of time for
which they must be kept and the manner in which they must be kept, will be similar to
current record keeping obligations set out in Division 2 of Part XIII of the Customs
Act. However, the type of documents that will be required to be kept will be much
broader than current requirements.
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93. The requirements will extend to all records relating to the origin of the goods for
which preferential tariff treatment is claimed in a Party to the TPP-11 and may
include, amongst other things, records associated with the tariff classification of the
goods and the origin or value of the materials used to produce the goods.
94. New subsection 126AKJ(2) provides that regulations for the purposes of
subsection 126AKJ(1) may impose such obligations on an exporter or producer of
goods.
Section 126AKK Power to require records
95. New subsection 126AKK(1) provides that an authorised officer (as defined in existing
section 4 of the Customs Act) may require a person who is subject to record keeping
obligations under regulations made for the purposes of section 126AKJ to produce to
the officer such of those records as the officer requires.
96. Under Article 3.27 of Chapter 3 of the TPP-11, the Customs Administration of a Party
to the TPP-11 may take action to verify the eligibility of goods for preferential tariff
treatment, including a written request for information from the exporter of producer of
the good (paragraph 3.27.1(b) of Chapter 3 to the TPP-11). New section 126AKK
gives effect to this Article in respect of goods that are exported to a Party of the TPP-
11 and that are claimed to be originating goods for the purpose of obtaining a
preferential tariff in that Party.
97. New subsection 126AKK(2) provides that an authorised officer (as defined in existing
section 4 of the Customs Act) may disclose any records so produced to a Trans-
Pacific Partnership customs official for the purpose of verifying a claim for a
preferential tariff in that Party. Records obtained by an authorised officer under new
section 126AKK may be Immigration and Border Protection information within the
meaning of Part 6 of the Australian Border Force Act 2015 (the ABF Act).
98. Section 42 in Part 6 of the ABF Act prohibits the disclosure of Immigration and
Border Protection information except, amongst other things, where the disclosure is
authorised by or under a law of the Commonwealth.
99. New Section 126AKK permits the disclosure of information that may be classified as
Immigration and Border Protection Information under section 44 and 45 of the ABF
Act to a Trans-Pacific Partnership customs official. The inclusion of new
section 126AKL expressly authorises the disclosure of such information as required
or authorised by a law of the Commonwealth for the purposes of Part 6 of the ABF
Act.
100.The note to new section 126AKK indicates that, where an authorised officer has
requested a person who is subject to record keeping obligations under regulations
made for the purposes of section 126AKK, a failure to produce documents or records
by that person may be an offence under existing section 243SB of the Customs Act.
The note also indicates that, under existing section 243SC of the Customs Act, a
person does not have to produce a record if doing so would tend to incriminate the
person.
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Section 126AKL Power to ask questions
101.New subsection 126AKL(1) provides that an authorised officer (as defined in existing
section 4 of the Customs Act) may require a person who is an exporter or producer of
goods that:
(a) are exported to the territory of a Party; and
(b) are claimed to be originating, under a law of a Party that implements the TPP-
11, for the purpose of obtaining a preferential tariff in the Party;
to answer questions in order to verify the origin of the goods.
102.It is considered that the power to ask questions in the circumstances set out in this
new provision is a necessary adjunct to the power to require records in new
section 126AKK, and enables an authorised officer to obtain information for the
purposes of verifying a claim for preferential tariff treatment.
New subsection 126AKL(2) enables an authorised officer (as defined in existing
section 4 of the Customs Act), for the purpose of verifying a claim for a preferential
tariff in a Party, to disclose any answers to questions covered by new
subsection 126AKL(2) to a Trans-Pacific Partnership customs official for that Party.
103.The answers to an authorised officer's questions obtained under new section 126AKL
may also be Immigration and Border Protection information within the meaning of
Part 6 of the ABF Act and therefore cannot not be disclosed to a Trans-Pacific
Partnership customs official except as allowed by Part 6. By including an express
provision in the Customs Act allowing for this information to be disclosed to a
Trans-Pacific Partnership customs official, the disclosure is required or authorised by
a law of the Commonwealth for the purposes of Part 6 of the ABF Act.
104.The note to new section 126AKL indicates that, where an authorised officer has
requested a person to answer questions in order to verify the origin of goods in
accordance with this section, a failure to answer questions by that person may be an
offence under existing section 243SA of the Customs Act. The note also indicates
that, under existing section 243SC of the Customs Act, a person does not have to
produce a record if doing so would tend to incriminate the person.
Part 3-Application Provisions
Item 5 Application provisions
105.This item gives effect to Article 3.28 of Chapter 3 of the TPP-11 and operates such
that:
(a) the amendments made by Part 1 of Schedule 1 to the Bill, apply in relation to:
i. goods imported into Australia on or after the commencement of that
Part; and
ii. goods imported into Australia before the commencement of that Part,
where the time for working out the rate of import duty on the goods
had not occurred before the commencement of that Part.
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(b) the amendment made by Part 2 applies in relation to goods exported to the
territory of a Party on or after the commencement of that Part (whether the
goods were produced before, on or after that commencement).
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Attachment A
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011
Customs Amendment (Comprehensive and Progressive Agreement for Trans-
Pacific Partnership Implementation) Bill 2018 (the Bill)
The Bill is compatible with the human rights and freedoms recognised or declared in
the international instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011.
Overview of the Bill
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (the
TPP-11) was signed on 8 March 2018 in Santiago in Chile, by the Minister for Trade,
Tourism and Investment, the Hon. Steve Ciobo MP for Australia and by
representatives for Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New
Zealand, Singapore, and Vietnam.
The TPP-11 is a separate treaty that incorporates, by reference, the provisions of the
original Trans-Pacific Partnership (the TPP) as signed by Ministers on
4 February 2016 in Auckland, New Zealand (Article 1 of the TPP-11 refers). By way
of an example, this means that Chapters 1 and 3 of the TPP are Chapters 1 and 3 of
the TPP-11.
The purpose of the Bill is to amend the Customs Act 1901 (the Customs Act) to
introduce new rules of origin for goods imported into Australia from a Party to the
TPP-11. In particular, the Bill will:
introduce new rules of origin to determine eligible goods to be subject to
preferential treatment of customs duty in accordance with the TPP-11. Goods
that satisfy the new rules of origin are referred to as Trans-Pacific Partnership
originating goods;
impose record keeping obligations on exporters that export goods to a Party to
the TPP-11 and who make a claim that the goods exported are originating
goods in accordance with the TPP-11; and
enable an authorised officer (as defined in subsection 4(1) of the Customs Act)
to disclose personal information (including Immigration and Border Protection
information within the meaning of the Australia Border Force Act 2015)
to a Trans-Pacific Partnership customs officials for the purposes of verifying
the claims for origin of goods exported to a Party to the TPP-11. Trans-Pacific
Partnership customs official means a person representing a Customs
Administration to a Party to the TPP-11.
The amendments contained in this Bill will be operative on the later of, the day on
which this Bill receives the Royal Assent, and the day on which the TPP-11 done at
Santiago Chile on 8 March 2018, enters into force for Australia.
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Complementary amendments will also be made by the Customs Tariff Amendment
(Comprehensive and Progressive Agreement for Trans-Pacific Partnership
Implementation) Bill 2018, when enacted, to the Customs Tariff Act 1995 to give
effect to the preferential treatment of customs duty in accordance with the TPP-11.
Human rights implication
This Bill engages the Right to not be subjected to arbitrary or unlawful
interference with privacy in Article 17 of the International Covenant on Civil
and Political Rights (ICCPR).
Under Article 15 of Chapter 3 of the TPP-11, a certification of origin document
completed by the exporter or producer or an authorised representative of the exporter
or producer shall support a claim that goods are eligible for preferential tariff
treatment in accordance with the TPP-11. The key information that must be included
in a 'certification of origin' document is detailed in Article 3.20 of, and Annex 3-B to,
Chapter 3 of the TPP-11 and includes personal information.
The Bill in part inserts new sections 126AKJ, 126AKK and 126AKL into the
Customs Act to enable regulations to prescribe record keeping obligations that apply
in relation to originating goods in accordance with the TPP-11 exported from
Australia to another Party to the TPP-11.
The obligations imposed reflect those set out in Article 3.27 of Chapter 3 of the TPP-
11 in respect of the retention of records and the verification of origin. The new
sections allow a Party to the TPP-11 to which originating goods are exported to verify
the origin of such goods. This may include the collection and disclosure of personal
information, including those set out in a 'certification of origin' document, for limited
purposes. This information may be disclosed to a Trans-Pacific Partnership customs
official for the purpose of verifying claim for a preferential tariff in a Party to the
TPP-11.
To the extent the Bill will allow for the collection and disclosure of information, the
Bill engages the right to privacy under Article 17 of the ICCPR. Article 17(1) sets out:
No one shall be subjected to arbitrary or unlawful interference with his
privacy, family, home or correspondence, nor to unlawful attacks on his
honour and reputation.
Following the enactment of the Bill, the collection and disclosure of personal
information in relation to goods claiming to be originating goods, will be permitted.
Further, the collection and disclosure of personal information is authorised under
Australian law and the Bill will not alter the existing protections.
The verification of the eligibility for preferential treatment is required under the TPP-
11 and the measure in the Bill is directed at the legitimate purpose of facilitating and
supporting Australia's international obligations under the TPP-11. This collection and
disclosure of personal information will only be permitted for the limited purpose of
verifying a claim made by a person for preferential tariff treatment making it a
reasonable and proportionate response to a legitimate purpose. As such, the collection
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and disclosure of personal information in these circumstances will not constitute an
unlawful or arbitrary interference with privacy.
Conclusion
The Bill is compatible with human rights because to the extent that it may engage the
right to privacy, will not constitute an unlawful or arbitrary interference with privacy.
MINISTER FOR LAW ENFORCEMENT AND CYBER SECURITY
THE HONOURABLE ANGUS TAYLOR MP
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Attachment B
COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR
TRANS-PACIFIC PARTNERSHIP (TPP-11)
ANALYSIS OF REGULATORY IMPACT ON AUSTRALIA
21 March 2018
CONTENTS
PART 1: INTRODUCTION ........................................................................................27
PART 2: PROBLEM IDENTIFICATION ..................................................................27
PART 3: OBJECTIVES OF GOVERNMENT ACTION ...........................................30
PART 4: ALTERNATIVE MEANS BY WHICH TO ACHIEVE THESE
OBJECTIVES ..............................................................................................................31
PART 5: IMPACT ANALYSIS ..................................................................................34
PART 6: TRADE IMPACT ASSESSMENT ..............................................................58
PART 7: CONSULTATION .......................................................................................61
PART 8: CONCLUSION ............................................................................................63
PART 9: IMPLEMENTATION AND REVIEW ........................................................63
ATTACHMENT: REGULATORY BURDEN AND COST OFFSET ESTIMATE ..65
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PART 1: INTRODUCTION
1. This Analysis of Regulatory Impact on Australia (ARIA) relates to the Comprehensive
and Progressive Agreement for Trans-Pacific Partnership (TPP-11), which was signed by
Australia on 8 March 2018 in Santiago, Chile. The TPP-11 is a regional free trade
agreement (FTA) negotiated between 11 economies in the Asia-Pacific: Australia, Brunei
Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, and
Vietnam. The TPP-11 incorporates the provisions of the Trans-Pacific Partnership (TPP)
Agreement by reference, with the exception of a limited set of provisions which are
suspended.
2. The Australian Government is now seeking to implement and ratify the TPP-11 in
accordance with Australia's domestic treaty making processes. An interim Regulatory
Impact Statement (RIS) was completed prior to concluding negotiations and signing the
TPP-11. This ARIA will be tabled in Parliament with the TPP-11 treaty. It builds on and
updates the interim RIS as well as the ARIA submitted on 27 November 2015 in respect
of the original TPP, which has not entered into force. The analysis and conclusions in the
original TPP's ARIA remain highly relevant for current purposes.
PART 2: PROBLEM IDENTIFICATION
Entry into Force of the TPP without the United States
3. The original TPP, signed by Australia on 4 February 2016, was the world's most
significant trade and investment agreement finalised in more than two decades, with
member countries accounting for around 40 per cent of global GDP. On 30 November
2016, the Joint Standing Committee on Treaties issued a report recommending that
Australia take binding treaty action to ratify the TPP.
4. On 30 January 2017, the Acting United States Trade Representative sent a letter to the
Depository of the TPP and all TPP signatories notifying them that the United States did
not intend to become a Party to the TPP. A direction to issue this notification was
formalised in a Presidential Memorandum issued on 23 January 2017. The TPP as
originally negotiated cannot enter into force without the United States. If the TPP does
not enter into force, Australia would miss out on new and improved market access to the
remaining TPP countries (Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico,
New Zealand, Peru, Singapore, and Vietnam).
5. To explore options to bring the TPP into force expeditiously, ministers from the
remaining TPP signatories met in Hanoi on 21 May 2017. This process culminated in the
signing of the TPP-11 on 8 March 2018 in Santiago, Chile.
6. If Australia does not implement the TPP-11, it would lose the gains made under the TPP,
which the TPP-11 incorporates. These gains are further detailed below.
Background to the TPP
7. The TPP negotiations emerged amidst uncertainty about the future of the Doha
Development Agenda Round, which was launched in 2001. Since the conclusion of the
Uruguay Round in 1994, members of the World Trade Organization (WTO) have failed
to agree on further liberalisation of global trade. Furthermore, the mandate for the Doha
Development Round did not cover a range of areas of relevance to trade and business,
such as competition policy, investment, environment, labour and government
procurement.
8. International production, trade and investments are increasingly organised within global
value chains (GVCs) where the different stages of the production process are located
across different countries. There have also been significant technological advancements
allowing for a rapid take up of e-commerce by businesses and consumers from a diverse
range of economies. There is a need for a framework that better supports global trade in
the 21st century.
9. As multilateral negotiations have stalled, major trading economies have entered into
bilateral and regional FTAs. Australia has negotiated 11 bilateral and regional FTAs
since 2001.1
10. In the past two decades, the Asia-Pacific has become the fastest growing economic region
in the world and will continue to be the world's fastest growing region in the 21st century.
With close to half of all global trade and around 70 per cent of Australia's trade flowing
through this region, expanding and deepening Australia's trade and investment
relationships is critical to our future economic growth and prosperity.
11. For Australia, the Asia-Pacific is the logical region to define the new rules for global
trade that covers all barriers and all sectors. Being a participant in TPP and TPP-11
negotiations since the beginning has enabled Australia to seize a strategic opportunity to
shape the rules that will govern trade in the region and beyond.
12. In light of the region's growing importance in the world trading system and the
opportunities offered by its growing economies, the absence of a FTA integrating the
Asia-Pacific economies is constraining Australia's ability to realise its full trading
potential within the region.
13. Conclusion of both the TPP and TPP-11 negotiations is the first concrete step towards
realising the long-term vision of a Free Trade Area of the Asia-Pacific (FTAAP).
TPP-11 membership is open to other economies and Australia is committed to expanding
TPP-11 membership over time.
14. More specifically, Australia's existing FTAs with TPP-11 parties have not fully addressed
the barriers and restrictions in those markets, which limit the extent to which our goods
and services exports can expand. In addition, Australia does not have FTAs with Canada
and Mexico, and our exporters are disadvantaged due to existing FTAs between these
countries and our competitors. Canada and Mexico2, in particular, provide significant
new opportunities because Australia has underdeveloped economic relationships with
1
Australia has concluded FTAs with: ASEAN and New Zealand (2009), Chile (2008), China (2015), Japan
(2014), Peru (2018), Republic of Korea (2014), Malaysia (2012), New Zealand and eight Pacific island
countries (2017), Singapore (2002), Thailand (2004), and the United States (2004).
2
In 2016-17, Australia's two-way merchandise trade with Canada and Mexico was $3.8 billion and $2.8 billion
respectively. Services trade was worth approximately $3 billion with Canada and $287 million with Mexico.
Two-way investment with Canada in 2016 totalled more than $85 billion. Australian investment in Mexico was
more than $5 billion over the same period. (Source: DFAT country-specific trade and economic fact sheets.)
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both of these G20 economies. The TPP-11 presents an opportunity to address both these
issues.
Tariff barriers still faced by Australian exporters
15. With Japan, Australia has secured increased access for many products under the Japan-
Australia Economic Partnership Agreement (JAEPA), but will continue to face high
tariffs and quota-limited access on Japan's sensitive products. In dairy, products face ad
valorem tariffs ranging up to 40 per cent and specific tariffs up to ¥1,199/kg ($12.62/kg).
Beef tariffs, while significantly reduced under JAEPA, would still be as high as 23.5 per
cent after 15 years. Wheat and barley face tariffs of up to ¥50/kg ($0.58/kg) and ¥39/kg
($0.45/kg) respectively, rice is subject to a ¥341/ kg tariff ($3.93/kg) and sugar is subject
to a levy on high polarity sugar of 103.10 yen/kg ($1.19-kg). A range of tariffs also
remain on other Australian interests in horticulture and seafood.
16. Australia has two existing FTAs with Malaysia, the ASEAN-Australia-New Zealand Free
Trade Agreement (AANZFTA), and the Malaysia-Australia Free Trade Agreement.
Nonetheless, Australia still faces tariffs and quota-limited access into Malaysia on: beer,
with a tariff of RM5 per litre; wine, where the tariffs are between RM7 and RM23 per
litre; and other alcoholic beverages, tariffs on which can be up to RM108.5 per litre. Pork
faces a tariff of 25 per cent for in-quota imports and 50 per cent for out-of-quota imports,
while liquid milk has tariffs of 20 per cent for in-quota imports, and 50 per cent for out-
of-quota imports.
17. Australia has an existing FTA with Vietnam under AANZFTA, however that agreement
did not eliminate Vietnamese tariffs on range of products of interest to Australia. These
products include refined petroleum, which faces a tariff of 20 per cent, and iron and steel
products, on which tariffs are as high as 40 per cent. Beer faces a 47 per cent tariff, wine
a 56 to 59 per cent tariff and spirits a tariff rate of 55 per cent.
18. With regards to Australia's new FTA partners, Canada and Mexico, Australia faces a
wide range of tariff barriers.
19. Access into the Canadian dairy market is currently significantly limited by existing quota
and high tariff arrangements. Canada's quota access for dairy products is incredibly
small - for example, 332 tonnes for yoghurt, 394 tonnes for cream and 3,274 tonne for
butter (2,000 tonnes of which are allocated to New Zealand). While out-of-quota tariffs
range up to 369 per cent. Outside of dairy, Canada also imposes tariffs of up to 94 per
cent for barley products, and imposes tariffs of 1.87 c/litre for wine, and up to around 20
per cent on industrial products, which it has eliminated for its other FTA partners.
20. Mexico has tariffs of up to 67 per cent on wheat, 115.2 per cent on barley, 125 per cent on
dairy, 25 per cent on beef, and 20 per cent on wine. On industrial products, Mexico's
tariffs can range from 15 to 30 per cent for automotive parts or mining equipment.
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Barriers to Australian services exporters and investors in TPP-11 countries
21. Table 1 summarises key barriers faced by Australian services exporters and investors in
TPP-11 countries.
Table 1: Selected barriers to Australian service exporters in TPP-11 countries
Country Barrier
Brunei Higher local content requirements for goods and services
suppliers in the oil and gas industry.
Tertiary education qualifications offered online not
recognised.
Canada Labour certification tests on the temporary entry of
Australian professionals and technicians.
Japan Restricted access for Australian suppliers of ground-
handling services.
Malaysia Ban on provision of legal services on a fly-in fly-out basis
and inability to establish legal practices in Malaysia.
Major restrictions on foreign suppliers providing
engineering, quantity surveying, land surveying and
architectural services.
Foreign equity caps on banks and insurers.
Tertiary education qualifications offered online not
recognised.
Mexico Inability to supply services to Mexico's energy sector.
Singapore Ban on provision of brokerage services, on a cross-border
basis, for insurance of aviation, maritime and transport-
related risks.
Vietnam Tertiary education qualifications offered online not
recognised.
Foreign providers able to offer only limited education
courses.
Foreign equity caps on telecommunications providers.
Contractual service suppliers permitted only short stays in
limited sectors.
PART 3: OBJECTIVES OF GOVERNMENT ACTION
22. Consistent with Government policy, the primary objective throughout the TPP-11 process
has been to maintain the high standards of the original TPP. In this context, the objective
was to maintain the following outcomes:
• improved goods market access through the elimination of tariffs across the board and
setting a regional approach to commitments to facilitate GVCs, in particular:
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- securing new market access gains for our exporters with Mexico and Canada,
- improving upon the market access outcomes from JAEPA;
strong investment protections that would provide greater certainty to Australian
investors in TPP-11 countries, whilst retaining the ability to regulate legitimately on
social, environmental or other similar public policy matters;
mutual recognition of professional qualifications (such as for architects and engineers)
and best practice regulations for foreign lawyers;
new opportunities and a level playing field for Australian providers of, and investors
in, minerals and energy and related services, education, engineering, financial and
legal services and logistics, particularly in Malaysia and Vietnam;
new commitments addressing the importance of the internet to international trade,
providing certainty for Australian businesses of all sizes to move and store data across
TPP-11 economies;
a permanent moratorium on the imposition of customs duties on electronic
transactions;
commitments to address, for the first time, the high cost of International Mobile
Roaming;
enhanced opportunities for Australian business persons seeking to enter and
temporarily stay in other TPP-11 countries through expeditious processing of
immigration documents, minimised fees and transparency on entry requirements;
commitments to enable short-term business visitors, intra-corporate transferees,
certain independent executives, and contractual service suppliers to enter and stay
temporarily in TPP-11 countries;
improved access for Australian suppliers to the government procurement markets in
other TPP-11 countries;
commitments to ensure rights of Australian intellectual property (IP) holders are
protected effectively and enforced by other TPP-11 countries' IP regimes;
new disciplines that address the role of State-Owned Enterprises (SOEs) in global
trade whilst upholding Australia's right to use SOEs for public interest purposes;
commitments to ensure that the benefits of the TPP-11 are not undermined by anti-
competitive practices;
a new benchmark that will benefit workers across the region by promoting
compliance with internationally-recognised labour rights and the effective
enforcement of labour laws;
commitments in areas where trade disciplines can help to address environmental
challenges, including through liberalising trade in environmental goods and services
and disciplines on fisheries subsidies that contribute to over-fishing;
promotion of international efforts to combat corruption and bribery of officials and
effective enforcement of anti-corruption laws; and
a framework for settling disputes under the TPP-11.
23. In negotiating the TPP-11, the following additional outcomes were sought:
a commitment by all 11 countries to maintain their market access commitments under
the original TPP; and
a minimisation of the number of articles from the original TPP that would be
suspended under the TPP-11.
PART 4: ALTERNATIVE MEANS BY WHICH TO ACHIEVE THESE OBJECTIVES
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24. The 11 countries that negotiated the TPP-11 represent around 13.5 per cent of the global
economy worth nearly $13.7 trillion. Australia's exports of goods and services to these
countries were worth $87.9 billion in 2016-17. The 11 countries also make up 6.8 per cent
of the world's population, providing Australia with a market of 495 million people. In
2016, Australian investment in TPP-11 countries represented 15.6 per cent of all outward
investment.
25. The 11 countries that negotiated the TPP-11 demonstrated a willingness to bring the TPP
into force, an ambitious and comprehensive agreement that will mark an important step
toward our ultimate goal of open trade and regional integration across the region in the
21st century. In particular, these countries were committed to agreeing to:
comprehensive market access by eliminating or reducing tariff and non-tariff
barriers across substantially all trade in goods and services; covering the full spectrum
of trade, including goods and services trade and investment, so as to create new
opportunities and benefits for our businesses, workers, and consumers;
a regional approach to commitments that would facilitate the development of
production and supply chains and seamless trade, enhancing efficiency and supporting
our goal of creating and supporting jobs, raising living standards, enhancing
conservation efforts, and facilitating cross-border integration, as well as opening
domestic markets;
addressing new trade challenges by promoting innovation, productivity, and
competitiveness by addressing new issues, including the development of the digital
economy, and the role of State-Owned Enterprises in the global economy;
commitments to promote inclusive trade by ensuring that economies at all levels of
development and businesses of all sizes can benefit from trade. It includes
commitments to help small and medium-sized businesses understand the Agreement,
take advantage of its opportunities, and bring their unique challenges to the attention
of the TPP-11 governments. It also includes specific commitments on development
and trade capacity building, to ensure that all parties are able to meet the
commitments in the Agreement and take full advantage of its benefits; and
a platform for regional integration that would welcome additional economies across
the Asia-Pacific region that can meet the Agreement's high standards.
26. The TPP-11 unites a diverse group of countries - diverse by geography, language and
history, size, and levels of development. All TPP-11 countries recognise that diversity is
a unique asset, but also one which requires close cooperation, capacity-building for the
less developed TPP-11 countries, and in some cases special transitional periods and
mechanisms which offer some TPP-11 partners additional time, where warranted, to
develop capacity to implement new obligations.
27. The most timely option available to the Government to achieve these objectives is the
negotiation of a regional trade agreement with the TPP-11 countries. The following
discusses alternative means to achieve these objectives available to the Government.
Renegotiate the TPP with the United States
28. When President Trump withdrew the United States from the TPP on 30 January 2017, he
expressed a clear preference for bilateral over regional deals. The TPP-11 countries
moved forward to bring the TPP into force without the United States. This is because the
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TPP's high standards and comprehensiveness provide a strong level of confidence that the
deal will bring huge benefits to all its signatories, including the United States.
29. A key objective of the TPP-11 process was to encourage the United States to reconsider
its approach to this Agreement. There has indeed been significant interest in the TPP-11
from US agriculture and business in the benefits of the Agreement.
30. On 26 January 2018, following the conclusion of the TPP-11 deal, US President Trump
said in Davos, Switzerland, that the United States would re-engage with the TPP if it was
in the US' interest, but that the United States would need to reach a 'much better deal'
than the original TPP for it to return. While having the United States return to the TPP in
the future would represent a net positive for Australia and for the region's trade and
investment growth prospects, ratifying the TPP-11 remains the best option to lock in the
gains made under the TPP in the interim.
Multilateral trade negotiations
31. As outlined in the 'Problem Identification' section of this ARIA, there has not been a
significant multilateral trade agreement since 1994. The WTO Doha Round has stalled.
A wide divergence of views between WTO members makes conclusion of the Doha
Round unlikely in the short term, nor is it likely that any concluded Doha Round would
fulfil all of its Ministerial Declaration mandate3. Moreover, given the Doha Round
Mandate, concluding the Doha Round would not address Australia's priority trade and
investment interests as extensively, or in as timely a way, as is possible under the TPP-11.
Tariff cuts in agriculture, for example, may not have gone further than existing applied
tariffs in many markets, which would mean no new commercially meaningful access.
Regional Comprehensive Economic Partnership (RCEP)
32. Australia and six other TPP-11 countries are also participating in another regional trade
agreement negotiation, the Regional Comprehensive Economic Partnership (RCEP).
RCEP is an ASEAN initiative that seeks to build on ASEAN's FTAs with Australia,
China, India, Japan, Korea and New Zealand. Australia is working closely with all RCEP
countries to conclude a comprehensive and quality outcome.
33. RCEP does not provide an alternative option for delivering the same outcomes. First, the
TPP-11, a landmark trade and integration agreement for our region, is more ambitious
than RCEP, which has a large range of diverse participating countries. Second, although
there is some overlap in membership, there are important differences that make the two
regional FTAs complementary. In particular, the TPP-11 brings in Canada and Mexico
from North America, and gives Australia access to supply chains in that region that would
not be addressed by RCEP. RCEP can complement the TPP-11 by its inclusion of all
ASEAN countries, as well as China and India.
34. Together with a concluded RCEP, the TPP-11 is a pathway to further economic
integration across the Indo-Pacific region.
Bilateral FTAs
3
World Trade Organization Doha Ministerial Declaration 2001.
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35. Australia could enter into separate bilateral FTA negotiations with the TPP-11 negotiating
countries with which Australia does not have existing FTAs,4 and seek to amend and
enhance the existing eight FTAs. Nonetheless, it is not certain whether Australia alone
could have been able to persuade these countries to lower their longstanding trade barriers
in sensitive sectors such as agriculture. Moreover, bilateral agreements cannot deliver the
supply chain benefits that the TPP-11, as a preferential regional deal, can deliver.
No action
36. Not joining the TPP-11 risks Australia's competitiveness in the region. Taking no action
would deny Australian exporters and investors the opportunity to take advantage of new
market access and rules that will facilitate GVCs and would put them at a competitive
disadvantage in relation to their competitors from TPP-11 countries.
37. The TPP-11 allows Australia to take an active role in encouraging competitive
liberalisation and eventual consolidation of the various FTAs in the region in a manner
that advances Australia's trade, economic and foreign policy objectives.
38. The TPP-11 sends a much-needed signal to the international community that diverse
economies can agree historic reductions in trade barriers to grow and support cross-border
trade and investment in the 21st century.
TPP-11
39. The WTO system allows for bilateral and regional FTAs as a way of reducing trade
barriers among a subset of WTO Members so long as the FTA substantially liberalises
trade between the FTA parties.
40. A WTO-consistent FTA with the 10 other TPP-11 countries achieves the Government's
objective in a timely manner.
PART 5: IMPACT ANALYSIS
Benefits to the Australian economy
41. The TPP-11 has delivered high quality outcomes that will open substantial new trade and
investment opportunities for Australia. It will promote job-creating growth, further
integrate our economy in the fast-growing Asia-Pacific region, and promote and facilitate
regional supply chains. The TPP-11 forms part of the Government's microeconomic
reform strategy to support diversification of our economy in the post-mining boom phase.
42. By setting common international trade and investment standards between member
countries, the TPP-11 will make doing business across the region easier, reducing red
tape and business costs.
43. Increased and more efficient trade and investment in the region will benefit the Australian
economy. Improved market access for Australian goods and services exports and lower
4
Such countries are Canada and Mexico.
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import prices will increase capital accumulation, raise productivities and improve
utilisation of resources.
Key goods market access outcomes
44. Australia's goods exports to TPP-11 Parties were worth around $69.6 billion in 2016-17 -
or 23.9 per cent of Australia's total goods exports.
45. The TPP-11 will eliminate 98 per cent of tariffs in the TPP-11 region. The TPP-11
market access outcomes build on existing levels of market access Australia has with its
FTA partners, namely Japan, Chile, New Zealand, Malaysia, Singapore, Peru, Brunei and
Vietnam. The TPP-11 also opens up valuable new market access opportunities for
Australian exporters in the two TPP-11 countries where Australia does not have a FTA,
namely, Canada and Mexico.
46. As a regional FTA, the TPP-11 will create additional benefits. The combined effect of
new market access and common rules will make it easier for Australian businesses,
exporters and consumers to participate in, and benefit from, regional value chains (also
known as global value chains).
47. Table 2 summarises the agreed tariff elimination schedules that will apply to Australia's
goods exports to the other TPP-11 markets. Table 3 outlines the key market access
outcomes for Australia for agriculture.
Table 2: Tariff Elimination Schedules
Elimination schedule for Brunei Darussalam's tariffs on imports of Australian goods
Tariff lines Brunei's imports from Australia
Staging category % of Cumulative US $m % of
No. Cumulative (%)
total (%) (2007-10) total
MFN 0% 6,258 75.4% 75.4% 49.3 94.1% 94.1%
A: 0% tariff on
1,385 16.7% 92.0% 1.3 2.4% 96.4%
EIF
B: 1-5 year
29 0.3% 92.4% 0.0 0.0% 96.5%
phasing
C: 6-10 year
624 7.5% 99.9% 1.8 3.5% 100.0%
phasing
D: 11+ year
8 0.1% 100.0% 0.0 0.0% 100.0%
phasing
Tariff reduction - - 100.0% 0.0 - -
Quota - - 100.0% 0.0 - -
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Total 8,304 100.0% 100.0% 52.5 100.0% 0.0%
Elimination schedule for Canada's tariffs on imports of Australian goods
Tariff lines Canada's imports from Australia
Staging category % of US $m % of
No. Cumulative Cumulative
total (2007-10) total
(%) (%)
MFN 0% 4,470 53.6% 53.6% 1,272.3 79.7% 79.7%
A: 0% tariff on EIF 3,433 41.2% 94.8% 312.2 19.5% 99.2%
B: 1-5 year phasing 124 1.5% 96.3% 4.0 0.3% 99.5%
C: 6-10 year
74 0.9% 97.2% 5.4 0.3% 99.8%
phasing
D: 11+ year
142 1.7% 98.9% 2.9 0.2% 100.0%
phasing
Tariff reduction - - 98.9% 0.0 - 100.0%
Quota 94 1.1% 100.0% 0.0 0.0% 100.0%
Total 8,337 100.0% 100.0% 1,596.8 100.0% 100.0%
Elimination schedule for Chile's tariffs on imports of Australian goods
Tariff lines Chile's imports from Australia
Staging category US $m
% of Cumulative % of
No. (2007- Cumulative (%)
total (%) total
10)
MFN 0% 36 0.5% 0.5% 4.5 1.8% 1.8%
A: 0% tariff on EIF 7,299 94.6% 95.1% 235.0 95.2% 97.0%
B: 1-5 year phasing 169 2.2% 97.3% 0.7 0.3% 97.3%
C: 6-10 year
203 2.6% 99.9% 6.6 2.7% 100.0%
phasing
D: 11+ year
99.9% 100.0%
phasing
Tariff reduction 8 0.0 100.0% 0.0 0.0 100.0%
Quota 100.0% 100.0%
Total 7,715 100.0 100.0% 1,538.4 100.0 100.0%
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% %
Elimination schedule for Japan's tariffs on imports of Australian goods
Tariff lines Japan's imports from Australia
Staging category % of US $m % of
No. Cumulative Cumulative (%)
total (2007-10) total
(%)
MFN 0% 3,685 40.8% 40.8% 41,814.9 92.3% 92.3%
A: 0% tariff on
3,914 43.4% 84.2% 520.6 1.1% 93.5%
EIF
B: 1-5 year
9 0.1% 84.3% 0.6 0.0% 93.5%
phasing
C: 6-10 year
321 3.6% 87.9% 194.3 0.4% 93.9%
phasing
D: 11+ year
687 7.6% 95.5% 731.6 1.6% 95.5%
phasing
Tariff reduction 77 0.9% 96.3% 1,554.8 3.4% 98.9%
Quota 324 3.6% 99.9% 478.4 1.1% 100.0%
Undefined 8 0.1% 100.0% 0.0 0.0% 100.0%
Total 9,025 100.0% 100.0% 45,295.1 100.0% 100.0%
Elimination schedule for Malaysia's tariffs on imports of Australian goods
Tariff lines Malaysia's imports from Australia
Staging category % of US $m % of
No. Cumulative Cumulative (%)
total (2007-10) total
(%)
MFN 0% 6,306 60.6% 60.6% 3,183.5 88.5% 88.5%
A: 0% tariff on
2,503 24.1% 84.7% 238.0 6.6% 95.1%
EIF
B: 1-5 year
889 8.5% 93.3% 74.0 2.1% 97.1%
phasing
C: 6-10 year
607 5.8% 99.1% 69.0 1.9% 99.1%
phasing
D: 11+ year
84 0.8% 99.9% 34.1 0.9% 100.0%
phasing
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Tariff reduction - - 99.9% 0.0 - 100.0%
Quota 10 0.1% 100.0% 0.0 0.0% 100.0%
Total 10,399 100.0% 100.0% 3,598.6 100.0% 100.0%
Elimination schedule for Mexico's tariffs on imports of Australian goods
Tariff lines Mexico's imports from Australia
Staging category % of US $m % of
No. Cumulative Cumulative (%)
total (2007-10) total
(%)
MFN 0% 6,800 56.2% 56.2% 693.0 87.4% 87.4%
A: 0% tariff on
2,552 21.1% 77.2% 67.3 8.5% 95.9%
EIF
B: 1-5 year
310 2.6% 79.8% 1.8 0.2% 96.1%
phasing
C: 6-10 year
6 0.0% 79.9% 10.0 1.3% 97.4%
phasing
D: 11+ year
2,370 19.6% 99.4% 19.2 2.4% 99.8%
phasing
Tariff reduction 27 0.2% 99.7% 0.0 0.0% 99.8%
Quota 42 0.3% 100.0% 1.7 0.2% 100.0%
Total 12,107 100.0% 100.0% 793.1 100.0% 100.0%
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Elimination schedule for New Zealand's tariffs on imports of Australian goods
Tariff lines New Zealand's imports from Australia
Staging category % of Cumulative US $m % of
No. Cumulative (%)
total (%) (2007-10) total
MFN 0% 4,207 57.7% 57.7% 2,890.7 56.0% 56.0%
A: 0% tariff on
2,688 36.9% 94.6% 1,569.3 30.4% 86.4%
EIF
B: 1-5 year
133 1.8% 96.4% 439.0 8.5% 94.9%
phasing
C: 6-10 year
260 3.6% 100.0% 262.9 5.1% 100.0%
phasing
D: 11+ year
- - 100.0% 0.0 - 100.0%
phasing
Tariff reduction - - 100.0% 0.0 - 100.0%
Quota - - 100.0% 0.0 - 100.0%
Total 7,288 100.0% 100.0% 5,161.9 100.0% 100.0%
Elimination schedule for Peru's tariffs on imports of Australian goods
Tariff lines Peru's imports from Australia
Staging category % of US $m % of
No. Cumulative Cumulative (%)
total (2007-10) total
(%)
MFN 0% 3,925 53.3% 53.3% 68.9 81.2% 81.2%
A: 0% tariff on
2,030 27.5% 80.8% 8.9 10.5% 91.7%
EIF
B: 1-5 year
- - 80.8% 0.0 - 91.7%
phasing
C: 6-10 year
362 4.9% 85.7% 1.5 1.7% 93.4%
phasing
D: 11+ year
1,012 13.7% 99.4% 1.3 1.6% 95.0%
phasing
Tariff reduction 41 0.6% 100.0% 4.3 5.0% 100.0%
Quota - - 100.0% 0.0 - 100.0%
Total 7,370 100.0% 100.0% 84.9 100.0% 100.0%
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Elimination schedule for Singapore's tariffs on imports of Australian goods
Tariff lines Singapore's imports from Australia
Staging category % of US $m % of
No. Cumulative Cumulative (%)
total (2007-10) total
(%)
MFN 0% 7,637 99.9% 99.9% 4,998.7 99.9% 99.9%
A: 0% tariff on
6 0.1% 100.0% 3.8 0.1% 100.0%
EIF
B: 1-5 year
- - 100.0% 0.0 - 100.0%
phasing
C: 6-10 year
- - 100.0% 0.0 - 100.0%
phasing
D: 11+ year
- - 100.0% 0.0 - 100.0%
phasing
Tariff reduction - - 100.0% 0.0 - 100.0%
Quota - - 100.0% 0.0 - 100.0%
Total 7,643 100.0% 100.0% 5,002.5 100.0% 100.0%
Elimination schedule for Vietnam's tariffs on imports of Australian goods
Tariff lines Vietnam's imports from Australia
Staging category % of US $m % of
No. Cumulative Cumulative (%)
total (2007-10) total
(%)
MFN 0% 3,030 33.1% 33.1% 774.4 50.3% 50.3%
A: 0% tariff on
2,999 32.7% 65.8% 572.6 37.2% 87.6%
EIF
B: 1-5 year
2,177 23.8% 95.3% 122.8 8.0% 99.6%
phasing
C: 6-10 year
681 7.4% 96.4% 23.2 1.5% 99.6%
phasing
D: 11+ year
241 2.1% 98.5% 45.2 2.9% 99.7%
phasing
Tariff reduction - - 98.5% 0.0 - 99.7%
Quota 31 0.3% 100.0% 0.3 0.0% 100.0%
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Total 9,159 99.4% 100.0% 1,538.4 100.0% 100.0%
Agriculture
48. Australia exported around $12 billion worth of agricultural goods to TPP-11 countries in
2016-17, representing close to 23 per cent of Australia's total exports of these products.
The TPP-11 will eliminate tariffs on more than $4.3 billion of Australia's dutiable exports
of agricultural goods to TPP-11 countries. A further $2.1 billion of Australia's dutiable
exports will receive significant preferential access through new quotas and tariff
reductions.
Table 3: Key agricultural market access outcomes for Australia
Sector Summary Outcomes
Beef Around 33 per cent of Australia's beef exports go to TPP-11 markets. Beef
is Australia's largest single agricultural goods export, worth $7.8 billion in
2016-17. TPP-11 market access outcomes for Australian beef producers and
exporters include:
Japan's beef tariffs will be reduced to 9 per cent within 15 years of
entry into force of the TPP-11. Australian fresh, chilled and frozen
beef exports to Japan were valued at $2.1 billion in 2016-17;
The majority of Japan's tariffs on offal will be eliminated over 10 to
15 years of entry into force of the TPP-11, and tariffs on cheek and
head meat significantly reduced to 9 per cent within 15 years of entry
into force of the TPP-11. Australian offal exports to Japan were
valued at $255 million in 2016-17;
Elimination of Japanese tariffs on processed meat products within 15
years of entry into force of the TPP-11. Australian exports of these
products to Japan were valued at $25 million in 2016-17;
Elimination of Canadian beef tariffs (currently 26.5 per cent) within
five years of entry into force of the TPP-11. Australian beef exports to
Canada were valued at more than $101 million in 2016-17;
Elimination of all Mexican tariffs on beef carcasses and cuts (currently
up to 25 per cent) within 10 years of entry into force of the TPP-11;
and
Elimination of Mexico's tariff (currently 20 per cent) on "other offal"
(used for taco meat) from entry into force of the TPP-11. Australian
exports of this product were valued at around $2.2 million in 2016-17.
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Sector Summary Outcomes
Sheepmeat Australia exports around $425 million in lamb and mutton to
TPP-11 markets, representing 16 per cent of all sheepmeat exports.
Key TPP-11 market access outcomes include:
Tariffs on exports to Mexico will be eliminated within 8 years of entry
into force of the TPP-11. Australia sheepmeat exports to Mexico were
valued at $13 million in 2016-17; and
Tariffs on sheepmeat exports to all other TPP-11 countries will be
eliminated upon entry into force of the TPP-11.
Wool Total Australian exports of wool were valued at around $3.2 billion in 2016-
17, and wool exports to TPP-11 countries were valued at around $35 million
in that period.
The TPP-11 will eliminate all remaining tariffs on Australian raw wool
exports to TPP-11 countries from entry into force of the Agreement.
Products produced using Australian wool in Malaysia, Vietnam or any other
TPP-11 partner will receive preferential treatment throughout the TPP-11
region. The rules of origin for textiles will encourage greater demand for the
Australian wool used to produce high quality yarns.
Pork In 2016-17, 71 per cent of Australia's pork exports went to TPP-11
countries, valued at almost $84 million. Key TPP-11 market access gains
for Australian pork producers and exporters include:
Building on JAEPA, elimination of the ad valorem component of
Japan's pork tariffs within 10 years of entry into force of the TPP-11;
Building on JAEPA, a 90 per cent reduction in Japan's specific tariff
applied to pork cuts and carcasses within 10 years of entry into force
of the TPP-11;
Building on the Malaysia-Australia Free Trade Agreement (MAFTA)
and AANZFTA, elimination of all Malaysian pork tariffs within 15
years; and
Elimination of Mexico's 20 per cent pork tariff on entry into force of
the TPP-11.
Cereals and Total Australian exports of cereals and grains were valued at around $8.5
grains billion in 2016-17, more than 19 per cent (or $1.6 billion) of which was
exported to TPP-11 countries.
TPP-11 market access outcomes for Australian cereals and grains producers
and exporters include:
Significant market access improvements in Japan for wheat, barley and
malt, building on JAEPA, including:
- reduction of the mark up on wheat and barley by 45 per cent
within 8 years of entry into force of the TPP-11;
- the creation of new quota volumes for wheat and barley under
the simultaneous buy-sell mechanism. Australia's exports of
these products to Japan were worth $568 million in 2016-17; and
- new quota access for malt exports;
Elimination of Mexican tariffs on wheat (currently 67 per cent) within
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Sector Summary Outcomes
10 years of entry into force of the TPP-11;
Elimination of Mexican tariffs on barley (currently 115 per cent)
within 5 years of entry into force of the TPP-11; and
Elimination of all Canadian tariffs on cereals and grains upon entry
into force of the TPP-11.
Dairy Total Australian dairy products exports were valued at more than $2.1 billion in 2016-17,
and 40.5 per cent (valued at $878 million) was exported to TPP-11 countries. Key TPP-11
market access outcomes for Australian dairy producers and exporters include:
Significant market access improvements in Japan for Australian dairy.
Australian dairy exports to Japan were worth $406 million in 2016-17.
Building on JAEPA, outcomes include:
- elimination of tariffs on certain cheese products, and tariff
reductions and new quota allocations for remaining cheese
products;
- new quotas for butter and skim milk powder with the in-quota
mark-up eliminated within 10 years of entry into force of the
TPP-11; and
- new quotas and tariff reductions for a range of dairy products
including ice cream, whole milk powder, condensed milk,
yoghurt and infant formula;
Preferential access into the highly protected Canadian market with new
quotas for dairy products including, cheese, milk powders and butter.
Tariffs on milk protein concentrates will be eliminated on entry into
force; and
Mexico will create new quota access, including for butter, cheese and
milk powders, and will eliminate tariffs on yoghurt.
Rice Total Australian rice exports were estimated to be valued at around $416 million in 2015-
16. Key TPP-11 market access outcomes include:
For the first time since 1995, new quota access for Australia into Japan
with a new 6,000 tonne quota from entry into force of the TPP-11,
growing to 8,400 tonnes after 12 years, for Australian rice and rice
flour exports. Japan will also reduce tariffs on a number of rice
preparation products; and
Improvements to Japan's tendering process for rice. Japan will now
offer tenders 6 times a year, including an additional tender in May in
line with Australia's growing season.
Sugar Total Australian exports of sugar were estimated to be valued at $2.4 billion in 2016-17, and
around one third of these exports (valued at $659 million) went to TPP-11 countries. TPP-
11 market access gains for Australian sugar producers and exporters include:
Building on the JAEPA, elimination of Japan's tariff and reduction in
the levy on high polarity sugar exports on entry into force of the TPP-
11. In 2016-17, Australian sugar exports to Japan were estimated to be
valued at $439 million;
Elimination of Canada's tariffs on refined sugar (currently
CA$30.86/tonne) within 5 years of entry into force of the TPP-11.
Australia already has duty free access for raw sugar into Canada;
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Sector Summary Outcomes
Mexico will also apportion Australia a guaranteed 7 per cent of any
tariff rate quota for raw sugar in the years in which it is offered.
Australia is only the sixth country Mexico has offered such an
outcome;
Elimination of in-quota tariffs on Vietnam's WTO sugar quota on
entry into force; and
Malaysia has committed to allow Australia to engage in the wholesale
distribution of refined sugar in Malaysia for use in the food and
beverage industry.
Cotton Total Australian exports of cotton were valued at nearly $1.8 billion in 2016-
17, and 15 per cent of cotton exports (valued at $274 million) were sent to
TPP-11 countries.
All tariffs on Australian cotton exports will be eliminated under the TPP-11,
with most eliminated from entry into force. Australian cotton producers will
also benefit from creation of new regional supply chains into the Japanese
consumer market. For example, clothing produced in Vietnam from
Australian cotton will benefit from the elimination of Japanese tariffs on
cotton products over 10 to 15 years - encouraging greater demand for
Australian cotton in the TPP-11 region.
Wine Total Australian wine exports were valued at more than $2.3 billion in 2016-
17, and around 19 per cent of these exports (valued at $442 million) went to
TPP-11 countries. TPP-11 market access gains for Australian wine
producers and exporters include:
Elimination of Canada's tariffs (currently 1.87 c/litre and 4.68 c/litre)
upon entry into force of the TPP-11. Australian wine exports to
Canada were valued at $184 million in
2016-17;
Elimination of Malaysian tariffs within 15 years of entry into force of
the TPP-11. Australian wine exports to Malaysia were valued at
nearly $51 million in 2016-17 and are currently subject to tariffs
ranging from 7 to 23 Malaysian Ringgit per litre;
Elimination of Vietnamese tariffs within 11 years of entry into force of
the TPP-11. Australian wine exports to Vietnam were valued at $5.8
million in 2016-17 and are currently subject to tariffs of up to 59 per
cent; and
Elimination of Mexican tariffs (currently 20 per cent) within 3 years of
entry into force of the TPP-11 for higher quality wine and elimination
of all tariffs within 10 years of entry into force of the TPP-11 for all
wine.
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Sector Summary Outcomes
Horticulture Total Australian horticulture exports were valued at $5.2 billion in 2016-17, and 14 per cent
of these exports (valued at $729 million) went to TPP-11 countries. TPP-11 market access
outcomes for Australian horticultural producers and exporters include:
Building on JAEPA, Japan will extend the period by which oranges
will face the lower "out of season" tariff (corresponding to the main
growing season in Australia) to an 8 month period (from 1 April to 30
November), and will eliminate that tariff over 6 years. The higher "in
season" tariff will be eliminated over 7 years. Australian orange
exports to Japan were valued at $46 million in 2016-17;
Japan will also eliminate all tariffs on fruit juices within 10 years of
entry into force of the TPP-11, building on the quota arrangements
achieved under JAEPA. Australian fruit juice exports to Japan were
valued at $12 million in 2016-17;
Elimination of all Canada's horticulture tariffs upon entry into force of
the TPP-11. Australian horticultural exports to Canada were valued at
$34 million in 2016-17; and
Elimination of most of Mexico's horticulture tariffs upon entry into
force of the TPP-11 and elimination of all tariffs within 15 years of
entry into force.
Seafood Australia's total seafood exports in 2016-17 were worth nearly $1.3 billion, with exports to
TPP-11 countries valued at $816 million. TPP-11 market access outcomes for Australian
seafood producers and exporters include:
All Japanese seafood tariffs will be eliminated within 15 years of entry
into force of the TPP-11;
All Vietnamese seafood tariffs will be eliminated on entry into force of
the TPP-11;
Canada will eliminate all tariffs on entry into force of the TPP-11; and
Mexico's seafood tariffs will be eliminated within 15 years of entry
into force of the TPP-11, with the majority eliminated on entry into
force.
Resources, Energy and Manufactured Goods
49. Australian exports of resources, energy, and manufactured products generally face far
lower tariff barriers than those facing agricultural goods. Nonetheless, the TPP-11 will
eliminate all remaining tariffs on Australian exports of
non-agricultural products to TPP-11 countries and create new opportunities for Australian
exports.
Resources and Energy
50. Australia's exports of resources and energy products to TPP-11 countries are worth
around $42 billion, representing around 48 per cent of Australia's total goods exports to
these countries.
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51. TPP-11 market access outcomes for resources and energy products that are additional to
Australia's existing FTAs include tariff elimination on:
butane, propane and liquified natural gas exports to Vietnam within 7 years of entry
into force of the TPP-11; and
refined petroleum exports to Vietnam within 10 years of entry into force of the TPP-
11. Australia exported $14 million worth of refined petroleum to Vietnam in 2016-
17.
Manufactured and Other Goods
52. Australia's exports of manufactured and other goods to TPP-11 countries are worth an
estimated $21 billion. TPP-11 market access outcomes for manufactured and other goods
additional to Australia's existing FTAs include tariff elimination on:
iron and steel products and aluminium exported to Canada on entry into force of the
TPP-11. Australian exports of these products were worth around $11 million in
2016-17;
leather and sack kraft paper exported to Mexico on entry into force of the TPP-11.
In 2016-17, Australian exports to Mexico of leather were worth $0.344 million and
sack kraft paper were worth $2 million;
medicament exports to Mexico within 10 years of entry into force of the TPP-11.
In 2016-17, Australian exports of medicaments to Mexico were worth $3 million;
other manufactured products exported to Mexico within 15 years of entry into force of
the TPP-11. Australia exports of these products to Mexico were valued at $115
million in 2016-17;
iron and steel products exported to Vietnam within 10 years of entry into force of the
TPP-11. Australian exports of these products to Vietnam were worth over $146
million in 2016-17; and
automotive parts to Vietnam within 10 years of entry into force of the TPP-11.
53. In the TPP-11, Malaysia has committed to provide guaranteed access for Australian
providers to engage in the wholesale distribution of automotive parts and components.
Malaysia has also committed to stop providing excise tax credits for locally produced
automotive parts. This scheme had provided an incentive for Malaysian manufacturers to
use local parts over imported Australian products.
Key services sector outcomes
54. Australia's services exports to TPP-11 countries were worth over $18 billion in 2016-17
(22.5 per cent of total Australian services exports). The TPP-11 will ensure Australian
service suppliers have improved transparency and predictability in the operating
conditions in TPP-11 markets.
55. The TPP-11 will also capture future market reforms in services sectors, meaning that any
liberalisation will flow through to Australian service providers.
56. TPP-11 investment and services outcomes include:
Mining Equipment, Technologies and Services (METS) and oilfield services
providers: major new commercial opportunities for our world class service providers,
including through:
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- Mexico's liberalisation of its energy sector;
- Vietnam opening its mining investment regime;
- Brunei Darussalam and Vietnam locking in future reforms to local content
regimes or otherwise committing to a level playing field between Australian and
foreign suppliers providing goods and services in the mining, oil and gas sectors;
- New rules on large SOEs such as PEMEX, VINACOMIN and
PETROVIETNAM, which will help ensure that Australian goods and services
providers can compete fairly for contracts;
professional services: Malaysia has locked in recent reforms to the legal, architectural,
engineering and surveying services sectors, removing a number of restrictions that
have long been of concern to Australian businesses;
financial services: new opportunities for Australian exporters to TPP-11 countries,
with guaranteed ability to provide the following cross-border services: (i) investment
advice and portfolio management services to a collective investment scheme and (ii)
insurance of risks relating to maritime shipping and international commercial aviation
and freight, and related brokerage;
temporary entry of business people: Australia has gained preferential temporary entry
into fast-growing TPP-11 markets that increasingly demand Australia's services
expertise, by reciprocating a matching level of temporary entry commitments to those
countries. We entered into this arrangement in a deliberate, measured way, allowing
the Government to maintain absolute control over Australia's labour market and
ensure its stability;
education services: Australian universities and vocational education providers will
benefit from guaranteed access to a number of existing and growth markets in Brunei
Darussalam, Japan, Malaysia, Mexico and Peru. Australia will also be well placed to
supply online education services across the region;
transport services: Australian freight and logistics companies stand to benefit from
enhanced commitments that support integrated logistics supply chains. Australian
providers of transport and logistics services in Malaysia and Vietnam will gain strong
trade and investment protections for the first time. The TPP-11 will capture future
liberalisation of investment regulations in aviation in Vietnam and freight trucking in
Malaysia and Vietnam, key markets for our airlines and logistics providers;
telecommunications services: Australian companies stand to benefit from the phasing
out of foreign equity limits in Vietnam's telecommunications sector five years after
the entry into force of the TPP-11 and the ability to apply to wholly-own
telecommunications ventures in Malaysia;
health services: Australian providers of private health and allied services will benefit
from greater certainty regarding access and operating conditions in Malaysia, Mexico
and Vietnam; and
hospitality and tourism services: Australian suppliers of travel agency and tour
operator services will benefit from guaranteed access in Brunei Darussalam, Canada,
Chile, Japan, Mexico and Peru; and greater certainty regarding access and operating
conditions in Malaysia and Vietnam. Increased trade and investment among TPP-11
countries will also increase demand for domestic tourism services and support the
development of Australia's tourism sector, particularly in regional Australia.
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Key investment outcomes
57. The TPP-11 will create new investment opportunities and provide a more predictable and
transparent regulatory environment for investment.
58. Australian investment in TPP-11 countries has been steadily increasing. In 2016, around
13 per cent of the total stock of foreign investment in Australia (valued at approximately
$423.7 billion) was from TPP-11 countries.
59. The TPP-11 will promote further growth and diversification of Australian outward
investment by liberalising investment regimes in key sectors such as mining and
resources, telecommunications and financial services. For example, Canada will allow
Australian investors to apply for an exemption from the 49 per cent foreign equity limit
on foreign ownership of uranium mines, without first seeking a Canadian partner.
Australian investors will also benefit from preferential investment screening thresholds.
Australian investments into Canada below CA$1.5 billion will not be screened.
Australian investors will also benefit from commitments offered by Japan, Vietnam and
Brunei to only impose conditions on foreign investment on the initial sale of interests or
assets owned by the government.
60. The TPP-11 will also promote productive foreign investment in Australia by liberalising
the screening threshold at which private foreign investments in non-sensitive sectors are
considered by the Foreign Investment Review Board (FIRB), increasing it from $261
million to $1,134 million for all TPP-11 Parties.
61. Under the TPP-11, Australia has retained the ability to screen investments in sensitive
sectors to ensure they do not raise issues contrary to the national interest. All investments
by foreign governments will continue to be examined and lower screening thresholds will
apply to investment in agricultural land and agribusiness.
62. The TPP-11's investment obligations can be enforced directly by Australian and other
TPP-11 investors through an Investor-State Dispute Settlement (ISDS) mechanism. The
ISDS mechanism includes a wide range of safeguards that protect the Government's
ability to regulate in the public interest and pursue legitimate public welfare objectives,
such as public health. Australia's tobacco control measures cannot be challenged.
Key government procurement opportunities
63. The TPP-11 will ensure that high government procurement standards exist in overseas
markets, creating new market access opportunities for Australian businesses.
64. Australian suppliers will have new opportunities to bid for a comprehensive range of
goods contracts, including drugs and pharmaceutical products, electronic components and
supplies; which are used for government purposes in Brunei Darussalam, Canada,
Malaysia, Mexico, Peru and Vietnam.
65. There are new opportunities for Australian businesses to bid for government procurement
services contracts, such as:
accounting, auditing and taxation services in Brunei Darussalam, Canada, Malaysia,
Mexico, Peru and Vietnam;
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management consulting services in Brunei Darussalam, Malaysia, Mexico and Peru;
computer and related services offers by all TPP-11 Parties, along with maintenance of
office machinery in Brunei Darussalam, Canada, Malaysia, Mexico, Peru and
Vietnam;
architectural engineering and other technical services in Brunei Darussalam, Canada,
Malaysia, Mexico and Peru;
land and water transport services in Brunei Darussalam, Malaysia and Peru;
telecommunication and related services in Brunei Darussalam, Canada, Malaysia and
Peru;
environmental protection services in Brunei Darussalam, Canada, Malaysia, Mexico,
Peru and Vietnam;
education services in Brunei Darussalam, Canada, Japan, Malaysia, Mexico and Peru;
and
health and Social Services in Brunei Darussalam, Malaysia and Peru.
66. For the first time, Australian METS and oilfield service suppliers will also be eligible to
bid for government procurement opportunities with Mexico for PEMEX.
Key outcomes for consumers and businesses
67. Consistent with Australia's other FTAs, remaining Australian tariffs on imports from
TPP-11 countries will be eliminated, with consumers and businesses set to benefit from
lower prices.
68. As a regional FTA, the TPP-11 will create additional and longer term benefits for
consumers and businesses that are not possible to achieve under a bilateral FTA. Even
though Australia has relatively low tariffs, products created via an international supply
chain are taxed at the borders over which they pass before they get to our shores. Under
the TPP-11, producers will be able to use inputs from any of the 11 participating countries
and trade the good under the TPP-11 preferential trading arrangements. This means
lower tariff rates on inputs as well as on the final product.
Lowering the cost of doing business
69. The TPP-11 includes additional commitments which will lower the costs of trade.
Highlights include:
more transparent and efficient customs procedures making it easier for Australian
companies to export and do business in the region. For example, TPP-11 Parties will
be required to provide an advance ruling on the tariff classification of a good, how it
should be valued, whether a good is originating and how to claim preference;
regional rules of origin and a single set of documentary procedures for products
traded under the TPP-11. These arrangements will support the development of
regional supply chains by encouraging 'cumulation', which permits inputs used in the
production of a good from one TPP-11 Party to be treated as the same as inputs from
any other TPP-11 Party when making a good. The arrangements will also allow
businesses to save on administrative costs by allowing them to trade under the one set
of rules, rather than under existing multiple bilateral FTAs.
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duty-free temporary admission of pallets and containers. This TPP-11
commitment will provide significant cost and administrative savings for Australian
businesses engaged in providing transport logistics services in the Asia-Pacific;
mechanisms to address non-tariff barriers (NTBs) impeding trade, which will give
Australia an important avenue to address NTBs affecting our exports in the region.
The TPP-11 will enhance transparency, cooperation and promote good practice with
regard to establishment and maintenance of technical regulations. A better
understanding of each Party's regulatory systems will improve public safety and
benefit Australian consumers; and
simplified rules and technical requirements for several products, including wine and
spirits. For example, the Australian wine industry will be able to use the same label
on bottles of wine for export to all TPP-11 countries, saving money on marketing and
distribution costs.
Addressing contemporary trade challenges
70. The TPP-11 will also address contemporary trade challenges in ways that have not
previously been addressed in Australian FTAs. Highlights include:
commitments ensuring SOEs and government designated monopolies engaged in
commercial activities make purchasing and sales decisions on a commercial basis do
not discriminate against Australian suppliers of goods and services. These rules will
promote competition, trade and investment in TPP-11 Parties and ensure Australian
exporters will be able to compete on a level playing field;
state of the art e-commerce provisions driving the information economy and
facilitating trade among TPP-11 Parties. For the first time, certainty for business
about their ability to move information across borders and make investment decisions
about data storage facilities. Australia's regulatory framework, including the Privacy
Act 1988, will not be affected;
enhancing the online environment for consumers in TPP-11 markets, including
commitments to personal information protection, enforceable consumer rights and
addressing 'spam'. Under the TPP-11, Australia will have a forum to exchange views
with other TPP-11 countries about the experiences of Australian consumers when
accessing products and services offered online;
for the first time, a provision addressing the high costs of international mobile
roaming. Parties will work cooperatively to promote transparent and reasonable rates
for international mobile roaming services. The agreement also ensures TPP-11
countries are able to enter into arrangements to regulate rates and conditions for
wholesale international mobile roaming services, should they wish to do so;
assisting small and medium-sized enterprises (SMEs) to reap the benefits of the
TPP-11, with an emphasis on moving to paperless trading, making customs and
export delivery more effective and efficient, and user-friendly websites targeted at
SMEs to provide easily accessible information about the TPP-11;
promoting high levels of environmental protection, including by liberalising trade in
environmental goods and services, and ensuring TPP-11 Parties effectively enforce
their domestic environmental laws. TPP-11 Parties must also take measures in
relation to a number of important environmental challenges, such as protecting the
ozone layer, protecting the marine environment from ship pollution, combatting
illegal wildlife trade and combatting over-fishing and illegal fishing. In a
breakthrough in the fight against overfishing, subsidies for fishing that negatively
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affect overfished stocks and subsidies for vessels engaged in illegal fishing will be
prohibited;
enhanced compliance by TPP-11 parties with internationally-recognised labour
rights, such as elimination of forced labour, abolition of child labour, freedom of
association and the right to collective bargaining. The TPP-11 will also enhance
cooperation and consultation on labour issues, and effective enforcement of labour
laws in TPP-11 Parties;
robust and transparent government procurement rules that would allow suppliers
from TPP-11 countries to participate fairly in government processes. The rules will
ensure that governments from TPP-11 countries do not discriminate against suppliers
from other TPP-11 countries when assessing tenders and awarding contracts. Each
TPP-11 Party will also be required to establish a review mechanism so that suppliers
(both foreign and domestic) can challenge government procurement decisions that do
not follow proper processes; and
robust provisions combatting corruption and bribery of public officials, and other
acts of corruption adversely affecting international trade and investment.
These anti-corruption provisions will provide greater transparency and certainty to
Australian individuals and businesses seeking to trade with, and invest in, TPP-11
Parties.
Intellectual property
71. The IP Chapter establishes a common set of rules for IP protection and enforcement in the
TPP-11 region. These rules will help streamline IP transactions, increase transparency
and lower the costs of doing business, and support Australia's creative and innovative
industries by promoting certainty and opportunities for trade and investment in the region.
Australian businesses and consumers will also benefit from increased access to legitimate
products and services. The chapter builds on the key areas of IP protection in the WTO's
Agreement on Trade-Related Aspects of Intellectual Property (TRIPS Agreement), and
covers copyright, trade marks, geographical indications (GIs), patents, industrial designs,
confidential information, plant variety protection, and civil, border and criminal
enforcement. A number of IP provisions from the original TPP have been suspended in
the TPP-11 (see below).
72. The Chapter seeks to promote business certainty for Australian patent applicants in the
TPP-11 region. TPP-11 countries commit to provide adequate and effective protection of
industrial designs. Trade mark provisions will help Australian traders promote and
safeguard their brands in the TPP-11 region. The Chapter requires transparency and due
process safeguards with respect to the protection of GIs, including for GIs protected
through international agreements. TPP-11 countries have agreed to ratify the
International Convention for the Protection of New Varieties of Plants (1991), which
encourages effective protection of plant breeders' rights and the development of new
plant varieties.
73. The Chapter also includes limited provisions in relation to pharmaceutical inventions and
products, while also aiming to ensure TPP-11 countries can take measures to protect
public health and support timely and affordable access to medicines.
74. The Chapter requires TPP-11 countries to protect undisclosed data about the safety or
efficacy of new agricultural chemical products for 10 years from the date of marketing
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approval. This will help attract investment and innovation in new agricultural chemical
products in the TPP-11 region, and ensure stronger protections for Australian exporters.
75. The Chapter provides effective and balanced protection for Australian copyright and
related rights in the TPP-11 region by protecting the exclusive rights of authors,
performers and producers with respect to the reproduction, communication, distribution,
and broadcasting of their works, performances and phonograms, while providing for
appropriate limitations and exceptions.
76. The Chapter includes civil, criminal and border enforcement measures aimed at reducing
trade in counterfeit trade mark and pirated copyright goods in the TPP-11 region. These
measures will help protect the rights of Australian innovators and creators, support
investment in innovation, promote trade in legitimate products and services, and reduce
the availability of infringing products and services in Australia. TPP-11 countries agree
to provide for civil and criminal measures in relation to the unauthorised access to and
theft of trade secrets, including in computer systems. These measures will not affect
countries' laws in relation to whistleblowing.
State and Territory Governments
77. During both the original TPP negotiations and TPP-11 negotiations, State and Territory
Governments raised issues of interest to industries residing in their respective states, their
regulatory responsibilities and the administrative implications of the TPP and TPP-11.
There are no additional impacts on State and Territory Governments beyond those
discussed in other sections of this analysis.
Australian trade regulations
78. The TPP-11 maintains the integrity of our system of trade remedies and is consistent with
our WTO rights and obligations. The TPP-11 provides for a transitional safeguard
mechanism, which allows a TPP-11 party to apply a transitional safeguard measure
during a certain period of time if import increases as a result of the tariff cuts
implemented under the TPP-11 cause serious injury to a domestic industry.
79. The Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary Measures (SPS)
chapters reaffirm the TPP-11 Parties' commitments to relevant WTO agreements and
improve consultation arrangements.
80. The TPP-11 also includes TBT annexes related to regulation of specific sectors to
promote common regulatory approaches across the TPP-11 region. These sectors are
cosmetics, medical devices, pharmaceuticals, information and communications
technology products, wine and distilled spirits, proprietary formulas for prepackaged
foods and food additives, and organic agricultural products.
81. In addition, in an effort to rapidly resolve SPS matters that emerge between the TPP-11
parties, the TPP-11 establishes a mechanism for consultations between governments.
82. The TPP-11 does not require changes to Australia's biosecurity system. Import risk
assessments are carved out of TPP-11's dispute settlement mechanism.
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Dispute Settlement
83. The TPP-11 includes a binding State-to-State dispute settlement mechanism modelled on
previous free trade agreements and the WTO system. Most of Australia's obligations in
the TPP-11 will be subject to this mechanism, except those found in the chapters
concerning Competition Policy, Cooperation and Capacity Building, Competitiveness and
Business Facilitation, Development, Small and Medium-Sized Enterprises and Regulatory
Coherence, and the Annex on Transparency and Procedural Fairness for Pharmaceutical
Products and Medical Devices.
Suspension of TPP provisions in TPP-11
84. The TPP-11 is a treaty that incorporates provisions of the original TPP, except for a
limited number which TPP-11 countries agreed by consensus to suspend. These
provisions remain part of the TPP-11, but they will have no application under
international law. The provisions will remain suspended until the TPP-11 countries decide
otherwise by consensus.
85. The table below sets out the effects of the suspended provisions.
Chapter Suspended Provision Effect of the suspension
(number)
Customs Administration and
Trade Facilitation Article 5.7.1(f): Each TPP-11
(5) Express Shipments Party has agreed
Suspend second sentence not to assess
customs duties on
express shipments
valued at or below
a fixed amount as
set under its
domestic law.
That amount is
currently set at
$1,000 under
Australian law.
There will no longer be an
obligation for Parties to
review the threshold below
which no duties on express
shipments are charged.
Investment
(9) • 9.1 Definitions This narrows the
Suspend scope of Investor-
"investment State Dispute
agreement" and Settlement (ISDS).
"investment Foreign investors
authorisation" can no longer make
and associated an ISDS claim for
Footnotes (5 - 11) violation of private
investment
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Chapter Suspended Provision Effect of the suspension
(number)
• 9.19.1 Submission contracts with the
of Claim to Government, or
Arbitration investment
authorisations.
a(i) B and C;
(b)(i) B and C Foreign investors
(investment can still bring an
authorisation or ISDS claim for a
investment violation of an
agreement), investment
chausette, footnote obligation, such as
3 expropriation or the
minimum standard
• 9.19.2 Submission of treatment.
of Claim to
Arbitration Expropriation is
where a
Footnote 32 government takes
• 9.19.3 Submission over, or
of Claim to nationalises, an
Arbitration investor's property.
The minimum standard of
(b) delete treatment means a government
investment has to treat a foreign investor
authorisation or fairly, such as giving them due
process in a local court.
investment
agreement
• 9.22.5 Selection of
Arbitrators
• 9.25.2 Governing
Law
Annex 9-L Investment
Agreements
Cross-Border Trade in Parties are no longer obliged
Services Express Delivery to refrain from cross-
(10) Services - Annex 10- subsidising express delivery
B services with revenues
Suspend paragraph 5 and 6 derived from monopoly postal
services. There will no
longer be a requirement for
each Party to ensure that its
postal monopoly refrain from
abusing its monopoly position
when supplying express
delivery services. This
provision would not have
required Australia to make
any legislative or competition
policy changes.
Foreign investors in the
Financial Services Minimum Standard of Australian financial services
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Chapter Suspended Provision Effect of the suspension
(number)
(11) Treatment in Article sector will not be able to bring
11.2 an ISDS claim against
Australia for violating the
Suspend sub-paragraph 2(b);
minimum standard of treatment
footnote 3 and Annex 11-E
obligation.
Telecommunications Resolution of This suspends a process for
(13) Telecommunications Disputes - reconsideration of decisions
Article 13.21.1(d) made by telecommunications
regulatory bodies.
The suspended provision
Government Conditions for clarifies that procuring entities
Procurement Participation - Article may promote compliance with
(15) 15.8.5 international labour rights as
Suspend commitments relating part of their procurement
to labour rights in conditions processes. Australia's
for participation government procurement
processes are not affected.
TPP-11 countries have agreed
Government Further Negotiations - to delay the TPP's in-built
Procurement Article 15.24.2 agenda to enhance government
(15) Suspend "No later than three procurement commitments by
years after the date of entry two years. That is, instead of
into force of this Agreement" 5 commencing negotiations
within three years from the
entry into force of the
Agreement, the Parties will
commence negotiations five
years after entry into force.
This suspension relates to
Intellectual Property Article 18.8: National technical aspects of non-
(18) Treatment Footnote 4 discriminatory treatment
Suspend final two sentences obligations with respect to
copyright works, phonograms
and performances. This
provision would not have
required Australia to make any
legislative changes.
There will no longer be a
Intellectual Property Article 18.37: requirement that patents be
(18) Patentable Subject made available for either new
Matter uses of known product, new
Suspend Paragraph 2 and methods of using a known
Paragraph 4, second sentence product or new processes of
using a known product. Also
there will no longer be a
requirement that patents be
available for inventions derived
from plants. These provisions
would not have required
Australia to make any
legislative changes.
Article 18.46: Patent Term There will no longer be a
Intellectual Property Adjustment for Unreasonable requirement to adjust, upon
(18) Granting Authority Delays request, a patent's term of
5
The Parties agree that negotiations referred to in Article 15.24.2 shall commence no earlier than five years after
entry into force of the TPP-11 Agreement, unless the Parties agree otherwise. Such negotiations shall commence
at the request of a Party.
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Chapter Suspended Provision Effect of the suspension
(number)
protection to compensate the
patent owner if there are
unreasonable delays in a patent
office's issuance of
patents. This provision would
not have required Australia to
make any legislative changes.
There will no longer be a
Intellectual Property Article 18:48: Patent requirement to adjust a
(18) Term Adjustment for pharmaceutical patent's term of
Unreasonable protection to compensate the
patent owner for unreasonable
Curtailment
curtailment of the effective
term of a patent as a result of
the marketing approval process
for a pharmaceutical
product. This provision would
not have required Australia to
make any legislative changes.
Article 18.50: Protection of There will no longer be a
Intellectual Property Undisclosed Test or Other Data requirement for five years of
(18) protection for test or other data
submitted to a regulatory
authority for the purposes of
obtaining regulatory approval
to market a pharmaceutical
product. This provision would
not have required Australia to
make any legislative changes.
Article 18.51: Biologics There will no longer be a
Intellectual Property requirement for five years of
(18) protection for test or other data
submitted to a regulatory
authority for the purposes of
obtaining regulatory approval
to market a biologic
pharmaceutical product, along
with other measures. This
provision would not have
required Australia to make any
legislative changes.
Article: 18.63: Term of There will no longer be a
Intellectual Property Protection for Copyright and requirement for a copyright
(18) Related Rights) term of protection for the life
of the author plus 70
years. This provision would
not have required Australia to
make any legislative changes.
Article 18.68: Technological There will no longer be a
Intellectual Property Protection Measures requirement for civil remedies
(18) and criminal penalties for the
circumvention of technologies
that control access to protected
copyright works. This
provision would not have
required Australia to make any
legislative changes.
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Chapter Suspended Provision Effect of the suspension
(number)
Article 18.69: Rights There will no longer be a
Intellectual Property Management Information requirement for civil remedies
(18) and criminal penalties for
altering or removing
information attached to a
protected copyright work that
identifies the work, author or
terms of use of the work. This
provision would not have
required Australia to make any
legislative changes.
Intellectual Property (18) Article 18.79: Protection of There will no longer be a
Encrypted Program-Carrying requirement for civil remedies
Satellite and Cable Signals and criminal penalties for
decoding encrypted satellite
signals without
authorisation. This provision
would have required minor
regulatory amendments in
Australia.
Article 18.82: ISP Liability and There will no longer be a
Intellectual Property Annexes 18-E and 18-F requirement for a legal
(18) framework for online service
providers to cooperate with
rights holders in deterring
online copyright
infringement. This provision
would not have required
Australia to make any
legislative changes.
There will no longer be a
Environment Conservation requirement for TPP-11
(20) andTrade (measures countries to take measures to
'to combat' trade) - combat trade in wild flora and
fauna that were taken or traded
Article 20.17.5
in another jurisdiction, in
Suspend "or another violation of the laws of that
applicable law" and footnote jurisdiction. This provision
26 would not have required
Australia to make any
legislative changes.
Transparency and Anti- This suspension concerns
corruption Transparency and processes to ensure the
(26) Procedural Fairness transparency and procedural
for Pharmaceutical fairness of systems related to
the listing and pricing of
Products and Medical
pharmaceutical Products and
Devices Medical Devices. This
Suspend Annex 26A - Article 3 provision would not have
on Procedural Fairness required Australia to make any
legislative changes.
Annex IV - State-Owned Malaysia is to commence
Enterprises and Designated Malaysia certain commitments with
Monopolies Suspension of: "after signature regard to its State-Owned
of this Agreement" Enterprise, Petronas, from date
of entry into force of the TPP-
11, rather than from the date of
signature.
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Chapter Suspended Provision Effect of the suspension
(number)
Annex II - Investment and Brunei Darussalam is to
Cross-Border Trade in Brunei Darussalam - commence certain
Services 14 - Coal - paragraph commitments with regard to
3 coal from date of entry into
Suspension of: "after the force of the TPP-11, rather than
signature of this Agreement". from the date of signature.
PART 6: TRADE IMPACT ASSESSMENT
86. The TPP-11 will open up substantial new market opportunities for Australian exporters
and investors in the region.
Impact on goods exports
87. Australia's exports to countries in the TPP-11 represented around $69.6 billion in
2016-17 - or 23.9 per cent of total Australian merchandise exports. The TPP-11 Parties
include some of Australia's major trading partners, for example Japan - where Australian
exports were worth over $42 billion in 2016-17.
88. The elimination of barriers to trade is expected to increase the volume and value of trade
with all TPP-11 Parties. The elimination and reduction of tariffs and creation of new
quota access into Japan will create opportunities in an export market currently worth over
$4.5 billion for Australian agricultural exports. Significant new tariff reductions and
increased safeguard volumes on beef will allow for increased exports to the Japanese
market. Japan's beef tariffs will be reduced to 9 per cent within 15 years of entry into
force of the TPP-11. Australian fresh, chilled and frozen beef exports to Japan were
valued at $2.1 billion in 2016-17. The elimination of tariffs and creation of new quotas
for dairy products will benefit Australian dairy exporters - Australian dairy exports to
Japan were worth $406 million in 2016-17. The elimination of tariffs on cheese products
alone covers over $100 million of existing Australian trade. Australia will also receive
new quota access for wheat, barley, malt and rice and a reduction in the levy on high
polarity sugar will mean that Australian high polarity sugar will now face lower duties
than exporters of low polarity sugar.
89. The elimination of tariffs in our new FTA partners of Canada and Mexico will create new
opportunities in export markets worth over $2 billion in 2016-17 for Australia. Particular
opportunities will be available for our exports to these markets of beef (over $126 million
in exports to these countries in 2017), sheepmeat ($96 million in exports), wine ($188
million), and pharmaceuticals ($28 million) into these countries. For the first time,
Australia will also be afforded genuine new access into to the Canadian dairy market,
with Canada offering over 100,000 metric tonnes of access for dairy products per year to
TPP-11 Parties.
90. The elimination of tariff barriers on some products beyond that achieved in our FTAs
with Malaysia and Vietnam will also create new opportunities for Australia. Malaysia's
elimination of tariffs on liquid milk and an interim quota of 3.3 million litres per year will
provide substantial new opportunities for our burgeoning fresh milk industry which
exported $247 million in 2017. The elimination of tariffs on wine and alcoholic
beverages into Malaysia and Vietnam will provide export opportunities for our highly
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competitive wine industry. Tariff elimination on iron and steel products into Vietnam
will provide welcome new opportunities for that sector - Australia exported over $224
million of iron and steel products to Vietnam in 2017.
91. The regional nature of the TPP-11 agreement will also provide new opportunities for
Australian exporters to participate in regional supply chains. Under the rules of origin of
the agreement, production in any one of the
TPP-11 Parties will be counted towards a good's originating status, that is, the ability for
an exporter or importer to claim a TPP-11 tariff preference for that good. As a result,
demand for TPP-11 products will increase in the region. For example, there will be
greater demand for Australian agricultural commodities in South-East Asia as new
preferential access becomes available into Japan for food and beverage products.
Australian manufacturers will also be able to export products under TPP-11 preferences
which they have produced using content from other TPP-11 Parties. For example a
mining equipment manufacturer could source inputs from Japan for transformation and
exportation to Mexico or Peru.
92. Trade, both in terms of imports and exports is also expected to increase as a result of the
administrative arrangements created by the TPP-11. Under the TPP-11 an exporter or
importer will only need to refer to one rule of origin, and use the same, self-certified
documentation when exporting to any of the TPP-11 parties under a tariff preference.
This will significantly reduce the administrative arrangements an Australian trader needs
to be aware of and comply with in order to access current tariff preferences. At present
Australia has eight different FTAs with TPP-11 Parties, each with its own administrative
arrangements.
Impact on goods imports
93. The TPP-11 will benefit consumers by increasing greater choice of goods at lower prices.
Australia's final tariff offer to TPP-11 countries on goods market access was plurilateral -
the same offer was made to all members of the TPP-11. Consistent with other Australian
FTAs and our trade policy settings, Australia's tariff elimination schedule is ambitious,
with 93 per cent of all tariff lines eliminated or bound at zero tariff rates upon entry into
force of the Agreement.
94. Virtually all remaining tariffs - covering those sectors where tariffs still provide some
level of protection against imports, are eliminated in either three or four years. This
includes tariffs of mostly 5 per cent on plastics and rubber, textiles, clothing and
footwear, iron and steel, motor vehicle components and some machinery and furniture
tariffs. The phased elimination of these tariffs aligns with existing FTAs and will not
undercut any existing tariff phasing arrangements for sensitive products with existing
FTA partners. The only tariffs in Australia's offer that are not eliminated are those on
used car imports. Although the 5 per cent ad valorem tariff is eliminated immediately,
consistent with our FTAs with Korea and Japan, the larger $12,000 specific tariff is
maintained. These tariffs represent only 0.1 per cent of Australia's total tariff lines.
95. Though Australia had already eliminated tariffs for eight of the 10 partner countries in the
TPP-11, elimination of tariffs for Canada and Mexico will likely encourage further trade
with those countries, and lower the cost of
imports into Australia. In particular, some increased imports and price
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reductions can be expected as a result of increased imports of horticultural products from
Mexico (imports of $41 million in 2017) into Australia,
automotive products from Mexico ($554 million in 2017) and Canada ($89 million in
2017), pharmaceutical products from Canada ($162 million in 2017) and Mexico ($30
million in 2017), telecommunications equipment from
Mexico ($378 million in 2017), and alcoholic beverages from Mexico ($157 million in
2017).
Elimination schedule for Australia's tariffs on imports from TPP-11 countries
Tariff lines
Staging category % of Cumulative
No.
total (%)
MFN 0% 2,775 46.2% 46.2%
A: 0% tariff on EIF 2,815 46.9% 93.0%
B: 3 year phasing 210 3.5% 96.5%
C: 4 year phasing 200 3.3% 99.9%
D: Used car tariff (ad valorem component
8 0.1% 100.0%
eliminated, specific tariff remains)
Total 6,008 100.0% 100.0%
Impact on investment
96. The TPP-11's rules to protect and promote foreign investment are contemporary and
robust. In embracing these, Australia demonstrates that it understands and values the role
of investment for our economy - in driving competition, productivity and innovation.
The raising of FIRB general screening threshold to $1,134 million for foreign investment
from TPP-11 countries in non-sensitive sectors will further encourage investment into
Australia from the TPP-11 region, particularly from financial hubs such as Singapore.
Impact on services exports
97. The TPP-11 will contribute to the growth and diversification of Australian exports of
services by liberalising barriers and providing more transparent and predictable operating
conditions in TPP-11 countries. Australia's services exports to TPP-11 countries were
worth over $18 billion in 2016-17 (22.5 per cent of total Australian services exports).
Australians involved in education, finance, ICT, health, transport and logistics, tourism,
mining and professional services sectors all stand to benefit from this deal.
Impact on domestic services sectors
98. The new services market access opportunities created by the TPP-11 will promote a
greater export orientation in Australia's services sectors and increased foreign investment
and employment in Australia's export-focused services industries. The TPP-11 will not
impact on the provision of social services. As in other FTAs, Australia has preserved
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policy space in the TPP-11 with respect to sensitive sectors, such as primary education
and audiovisual services.
Incentivising R&D
99. The TPP-11 establishes a common set of rules on IP protection and enforcement for the
TPP-11 region. Knowing that IP rights can be protected and enforced in TPP-11 markets
provides an important incentive for Australia's businesses and investors to expand their
activities in the region.
A competitive environment
100. The Australian business community will be able to benefit from TPP-11 rules
ensuring SOEs and government-designated monopolies engaged in commercial activities
make purchasing and sales decisions on the basis of commercial decisions and do not
unjustifiably discriminate against suppliers of goods and services from other TPP-11
Parties. The TPP-11 will help to ensure Australian exporters are able to compete on a
more level playing field.
PART 7: CONSULTATION
101. Stakeholder views were actively encouraged and considered throughout negotiations
on the original TPP, which spanned many years. This consultation process, detailed
further below, culminated in two parliamentary enquiries, triggered by the tabling of the
TPP text in the Australian Parliament on 9 February 2016.
102. The Joint Standing Committee on Treaties (JSCOT) invited submissions from State
Premiers, Territory Chief Ministers and Presiding Officers of each Parliament, as well
interested individuals and organisations. JSCOT held public hearings in Canberra,
Sydney, Perth and Melbourne throughout 2016. The final JSCOT report on the TPP,
tabled on 30 November 2016, records that over 260 submissions were considered by the
Committee. The majority of the Committee recommended that 'binding treaty action be
taken' in relation to the TPP.
103. On 15 September 2016, the Senate referred an inquiry into the TPP to the Foreign
Affairs, Defence and Trade References Committee. The Committee advertised the
inquiry on its website and wrote to individuals and organisations likely to have an interest
in the inquiry and invited them to make written submissions. The Committee received
over 100 submissions to the inquiry, but did not hold a public hearing due to the
likelihood that the TPP would not enter into force following the withdrawal of the United
States. It nevertheless completed the inquiry 'on-the-papers' and recommended that the
Australian Government 'should defer undertaking binding treaty action until the future of
the Trans-Pacific Partnership Agreement is clarified through further negotiations with
Australia's major trading partners'.
104. Given that the TPP-11 incorporates the provisions of the original TPP, with a limited
number of suspensions, the consultation processes and outcomes of the above
parliamentary inquiries remain relevant.
Stakeholder consultation
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105. Stakeholder views were actively encouraged and considered throughout negotiations
on the original TPP and the TPP-11.
TPP
106. In November 2008, the Australian Government publicly announced that Australia
would participate in the original TPP negotiations. Australia's decision to participate in
the TPP negotiations followed extensive consultations involving a wide range of
stakeholders and State and Territory Governments. Overall, there was widespread
support for Australia's participation in the TPP.
107. The Department of Foreign Affairs and Trade (DFAT) engaged in over 1000
stakeholder briefings and consultations over the time period of the TPP negotiations with
a wide range of domestic stakeholders, including representatives from peak industry
bodies, individual companies, academics, unions, consumer groups, special interest
groups and other organisations representing civil society. An attachment to the National
International Analysis tabled in respect of the original TPP in 2016 records that 485
stakeholders were consulted and 83 written submissions were received. Many
stakeholders were consulted on several occasions and provided more than one written
submission.
108. Senior trade negotiators provided briefings and information on the progress of TPP
negotiations to stakeholders on request during the course of the negotiations. Such
consultations were open to businesses, civil society and interested members of the public,
and were advertised on the DFAT website. DFAT provided updates on the TPP
negotiations via its website, and consulted stakeholders and interested members of the
public via group email address (Email: TPP@dfat.gov.au).
109. Written stakeholder submissions were also actively encouraged throughout the
original TPP negotiations by DFAT. The Government received more than 85
submissions, from a wide range of domestic stakeholders.
110. State and Territory Governments were consulted on a regular basis, including via
correspondence, teleconferences, and at meetings of the Trade and Investment Ministers,
Senior State and Territory Trade Officials Group (STOG) and Commonwealth-State-
Territory Standing Committee on Treaties (SCOT). State and Territory departments were
invited to make public submissions at the outset of negotiations and had the opportunity
to make submissions throughout the negotiating period. Throughout the negotiations, the
Trade Minister wrote to State and Territory leaders seeking endorsement of Australia's
services and investment offers, prior to exchanging offers with other TPP-11 negotiating
parties, reflecting the responsibilities State and Territory Governments have for regulation
of services and investment activities. State and Territory Governments subsequently
advised that they supported the initial offer subject to continuing consultations on
TPP-11.
111. Commonwealth Government departments were consulted extensively throughout the
negotiations and representatives from relevant departments participated in negotiating
sessions held in in Australia and other TPP countries.
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TPP-11
112. DFAT continued to consult stakeholders, State and Territory Governments, interested
members of the public, and other Commonwealth Government departments since the
original TPP negotiations concluded on 5 October in Atlanta. This continued throughout
the TPP-11 negotiation process from February 2017. DFAT continued to make
information on the TPP-11 publicly available in a timely fashion on its website and
respond appropriately to emails sent by stakeholders and interested members of the public
to the DFAT TPP email address (Email: TPP@dfat.gov.au).
113. In relation to the TPP-11, it is estimated that there were 50 meetings, consultations
and contacts undertaken over the period February 2017 - January 2018.
114. A large number of business stakeholders have made public comments welcoming the
outcomes of the TPP-11 negotiations. Some civil society groups have expressed concern
with the ISDS-related and temporary entry outcomes.
115. Once the TPP-11 enters into force, it is intended that DFAT and Austrade will
implement an outreach strategy to ensure all Australians are able to take advantage of the
Agreement. This will include information sessions held throughout Australia.
PART 8: CONCLUSION
116. It is in Australia's interests to enter into a regional FTA with Brunei Darussalam,
Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, and Vietnam,
given the TPP-11 is expected to:
deliver commercially meaningful market access gains that will benefit Australian
agriculture, resources, energy and manufacturing exporters, service providers,
consumers and investors;
secure Australian exporters' competitive position in the Asia-Pacific;
deliver faster and deeper market access gains than are possible through multilateral
WTO negotiations;
be consistent with WTO requirements for FTAs; and
complement Australia's efforts to seek additional trade liberalisation from other TPP-
11 parties through the WTO and regional mechanisms.
117. It should be noted that:
the removal of tariffs on merchandise imports from Canada and Mexico will lead to
reductions in tariff revenue, and thereby affect the Government's fiscal position,
although this would be offset over time by the second-round effects of increased
economic activity. The tariff reduction will also result in lower costs to Australian
consumers; and
Australia will eliminate tariffs on virtually all products within four years following the
TPP-11's entry into force. Australia will gradually phase out tariffs on a small
number of products, mostly plastics and rubber, and textiles, clothing and footwear,
iron and steel, motor vehicle components and some machinery and furniture. The
only tariffs in Australia's offer that are not eliminated are those on used car imports.
These tariffs represent only 0.1 per cent of Australia's total tariff lines.
PART 9: IMPLEMENTATION AND REVIEW
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118. Implementation of the TPP-11 will require changes to: the Customs Act 1901; the
Customs Tariff Act 1995 and associated regulations; and the Foreign Acquisitions and
Takeovers Regulations 1989.
119. The Government Procurement (Judicial Review) Bill 2017 was introduced in May
2017 to enable implementation of the domestic review obligations in the TPP
Government Procurement Chapter. This legislation establishes a mechanism for suppliers
to raise complaints about the conduct of procurements in which they have an interest.
The Government identified the Federal Circuit Court (FCC) as the preferred entity to
implement the domestic review obligation, and the legislation vests the necessary
jurisdiction in the FCC.
120. The TPP-11 will enter into force 60 days after the date on which at least six or at least
50 per cent of the number of signatories to the Agreement, whichever is smaller, have
notified the Depository in writing of the completion of their applicable legal procedures
(i.e. ratified the Agreement).
121. A TPP-11 Commission established under the Agreement will be responsible for the
operation of the TPP-11. The Commission will review the operation of the TPP-11 three
years after entry into force of the Agreement and at least every five years thereafter. If
the entry into force of the original TPP is imminent or if the original TPP is unlikely to
enter into force, the Parties have agreed to, on the request of a Party, review the operation
of the TPP-11 so as to consider any amendment to the Agreement and any related matters.
122. After the entry into force of the TPP-11, any state or separate customs territory may
accede to the TPP-11 if it is prepared to comply with the provisions of the Agreement,
other terms and conditions specified, and if all TPP-11 Parties agree to the accession.
123. Any Party may withdraw from the TPP-11 by providing written notice to the
Depositary and other Parties. A withdrawal shall take effect six months after a Party
provides written notification, unless the Parties agree on a different period.
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ATTACHMENT: REGULATORY BURDEN AND COST OFFSET ESTIMATE
1. The entry into force of the Comprehensive and Progressive Agreement for Trans-Pacific
Partnership (TPP-11) is expected to result in a small reduction in ongoing business
compliance costs for Australian exporters to TPP-11 Parties. The reduction arises from
two sources. First, the ability of exporters to use one set of documentary procedures to
export to 10 other markets instead of under eight separate FTAs plus two non-FTA
partners. Second, the possibility that some businesses that previously sought and
obtained non-preferential certificates of origin (COOs) may now be able to self-certify
the origin of their goods for exports to Brunei Darussalam, Canada, New Zealand,
Mexico, and Vietnam. Existing agreements allow businesses to self-certify the origin of
their goods for exports to Chile, Japan, Malaysia, Peru and Singapore.
2. There is a significant level of uncertainty regarding the number and composition of
COOs issued in respect of Australian exports into TPP-11 Parties. Accordingly, the
estimates of the compliance costs under the status quo - as well as the likely incremental
changes - are largely assumption driven and should be interpreted as such. However,
based on the available data, it is possible to gain an appreciation of the order of
magnitude of these changes.
Certificates of Origin
3. COOs are issued by industry groups such as the Australian Chamber of Commerce and
Industry and the Australian Industry Group. Preferential certificates account for around
10 per cent of all certificates issued. Preferential certificates are generally issued in
respect of countries with whom Australia has a free trade agreement, but which do not
allow for self-declaration.
4. TPP-11 Parties represent 23.9 per cent of Australia's total goods exports.
Direct Costs
5. Where businesses seek third-party certification from industry groups, the cost of each
certificate varies from between $20-70 at an average of $33. The cost of a certificate
depends on a range of factors, such as whether an applicant is a member of the issuing
body and the level of complexity.
Administrative costs
6. The ongoing administrative costs incurred by a business in preparing the documentation
to obtain a COO are likely to be relatively low. The bulk of Australian exports to TPP-
11 Parties are 'wholly obtained' goods. Further, while new businesses may expend
considerable time applying for certification for their initial consignment, as a matter of
practice this information is re-submitted for subsequent certifications. In addition, much
of the information required would be collected for other purposes. The administrative
time burden for each application is therefore estimated to be modest.
7. Similarly, the records related to a COO are required to be kept for five years by most
foreign customs agencies. However, businesses are required under Australian Tax Law
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to retain these records for seven years. The incremental compliance burden associated
with record keeping for COOs is therefore assessed as nil.
Incremental reduction in number of certificates under the TPP-11
8. COOs are required for Australian exports to TPP-11 Parties for a range of purposes in
addition to tariff compliance. For example, overseas customs agencies may require
COOs for the purpose of calculating import quotas. Alternatively, foreign banks may
require COOs in order to provide letters of credit.
9. Therefore, it is possible that of the total number of Australian COOs currently issued in
respect of TPP-11 Parties, some of these will no longer be required as a result of the
TPP-11. However, each business will have to consider for themselves, as a commercial
decision, whether the benefits of obtaining a COO are outweighed by the costs
(administrative or otherwise).
10. It is therefore assumed that there will be a modest reduction in the number of COOs
issued in respect of Australian exports to TPP-11 Parties as a result of the Agreement.
To the extent that this reduction occurs, those businesses will save the direct costs of
certification by industry bodies; together with the administrative costs.
Regulatory Burden and Cost Offset (RBCO) Estimate Table
Average Annual Compliance Costs (from business as usual)
Costs ($m) Business Community Individuals Total Cost
Organisations
Total by Sector ($143 995.21) $ $ ($143 995.21)
Cost offset ($m) Business Community Individuals Total by Source
Organisations
Agency $ $ $ $
Within portfolio $ $ $ $
Outside portfolio $ $ $ $
Total by Sector $ $ $ $
Proposal is cost neutral? yes no
Proposal is deregulatory yes no
Balance of cost offsets $143 995.21
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