A matter of perspective

A version of this article was first published by The DCN in February 2023.

Andrew Hudson, Partner of Customs & Trade at Rigby Cooke Lawyers, recently returned from a two-week visit to the European Union (EU), the United Kingdom (UK) and the United States (US). This was Andrew’s first substantive trip overseas since the Covid-19 pandemic. It allowed him to reconnect in person with overseas clients and engage with representatives of the Australian and Victorian governments to discuss initiatives and opportunities overseas.

The trip provided the opportunity to discuss policy and legal issues in trade, both nationally and internationally, and to advance relationships of the Export Council of Australia (ECA), the Food and Beverage Importers Association (FBIA), and the International Forwarders and Customs Brokers Association of Australia (IFCBAA). Andrew is a member of the board of directors of the ECA, IFCBAA and executive committee of the FBIA.

The trip was funded in part by Rigby Cooke Lawyers and in part by the Australian Trade and Investment Commission (Austrade) through its Export Markets Development Grants program to further advance work undertaken with overseas clients and law firms acting in similar practice areas in law.

A quick spin around the world

Andrew’s trip started in Geneva, where he attended the HQ conference of the International Federation of Freight Forwarders Associations (FIATA). This included a meeting of the FIATA Advisory Body on Legal Matters (ABLM), of which Andrew is a member (representing IFCBAA), as well as a meeting with the Australian delegation to the World Trade Organization (WTO).

Meetings in Geneva were followed by some time in Paris to meet with the International Chamber of Commerce (ICC), including the administrators of the Global Customs and Trade Facilitation Commission (of which Andrew is also a member) and an evening function at the Australian Embassy. The function was hosted by the Australian ambassador with other representatives of the Department of Foreign Affairs and Trade, Austrade, as well as representatives of the new European office of Global Victoria and members of the Australia France Business Council.

After Paris, Andrew travelled to London and attended meetings with the Department of Foreign Affairs and Trade (DFAT) and Global Victoria at Australia House, which was timely given that UK’s primary legislation enabling the Australia-UK Free Trade Agreement (A-UKFTA) had that day received Royal Assent, only leaving the approval of various regulations by the UK Parliament before commencement of the A-UKFTA.

After an unscheduled stopover in Helsinki, Andrew continued to New York and Washington DC in the US for meetings with DFAT, Global Victoria and several law firms in those cities where Rigby Cooke Lawyers shared clients.

The trip enabled Andrew to advance the interests of the ECA, the FBIA and IFCBAA by securing meetings with the equivalent associations in the UK and US, enabling discussions on how the associations could work together to improve the sharing of relevant information from their own jurisdictions and represent the interests of association members.

Learnings from abroad

Arising from the trip and various meetings were several items of interest of which are important and worth noting in this article.

To begin with, a shared common view was that the ‘golden days’ of globalisation have passed and trade arrangements between nations will be driven by other matters such as strategic and defence relationships and will include labour, environmental, sustainability, gender, and diversity issues. There were many references to a ‘fragmented’ and ‘volatile’ global trade situation, further discussion of this commentary can be found in a previous article here.

At the FIATA meeting, discussions of the ABLM included a proposal to advance a new United Nations convention to treat documentation issued identifying goods moved by rail and vehicle as ‘negotiable instruments’, like bills of lading for goods moved by vessels. This would not be aimed at limiting liabilities but to allow those new negotiable instruments to be used for funding and insurance purposes. This largely reflected the importance of such rail and vehicle freight movements in the EU and other adjacent countries.

Meetings also suggested that Australia’s standing in the allied nations has rarely been higher. Australia is viewed as a trusted and valued partner in the region. This is reflected in trade agreements but also in defence and strategic alliance such as the AUKUS defence treaty, the Quad and the Five Eyes intelligence agreements.

The focus on supporting domestic industries, through such programs as the Inflation Reduction Act in the US and the National Reconstruction Fund in Australia, will take place in other nations as a necessary compromise to more liberal trade agreements. More domestic production is required to hedge against future supply chain interruptions.

There is significant interest in any action which Australia proposes to take to prohibit imported goods which are the product (in part or in whole) of forced labour. The US has taken significant steps on this topic, including allowing US Customs and Border Protection to seize goods believed to be the product of forced labour and putting the onus on importers to establish that the goods are not the product of forced labour. The Australian modern slavery regime is currently under review, but commentary reflects that attention to the presence of forced labour in the supply chain is vital.

Tackling issues

The meetings further revealed there is a likelihood that many countries will impose a form of carbon reduction adjustment mechanism which will levy additional customs duty on goods produced with use of high levels of polluting carbon to follow the initiative of the EU. Similarly, increases in tariffs will be imposed on goods which are deemed to be unsustainable, such as palm oil.

While the impasse on the appeal mechanism as part of the WTO’s dispute resolution system shows no obvious signs of resolution, the interest in the Multi-Party Interim Appeal Arbitration Arrangement as an alternative is growing, with Japan having recently agreed to join.

Many countries are concerned with the US-led proposal that those companies whom are members of ‘trusted trader’ or equivalent Authorised Economic Operator (AEO) programs, should also need to have processes to deal with forced labour or modern slavery issues in their supply chain. While issues such as these warrant attention, it is also thought that they should not be mandatory in such programs.

There is also interest in the benefits offered under the Australian Trusted Trader (ATT) program which are seen as being superior to the benefits being offered in other similar AEO programs overseas.

Trade modernisation and trade facilitation remain items of significant interest (as they are in Australia), but there are still reservations that the various initiatives may not be adequately co-ordinated within or across countries.

It has also come to light that shippers and their representatives are concerned by the costs of moving goods by vessels, especially in relation to the detention and demurrage fees imposed by shipping lines and the access charges imposed by stevedores.

The Australian autonomous sanctions regime is perceived as being the most extensive version of such regimes and is having a real impact on those operating beyond Australia’s borders if there is some connection to those parties in Australia’s designated list of those subject to their autonomous sanctions.

Ultimately, the overseas trip advanced the relationships of the ECA, FBIA and IFCBAA with equivalent associations overseas which will be of assistance to members of those associations. It assisted the professional interests of Rigby Cooke Lawyers and advanced comprehension of overseas positions on legal issues affecting the trade agenda, both presently and in future.

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