free trade

School is back in Canberra and it’s time to complete the homework on free trade and trade facilitation

11 September 2019

This article was first published by AirCargo magazine.

Now that the 46th Federal Parliament has resumed and the commencement formalities have been completed, it is a good time to review the status of our Free Trade Agreement (FTA) agenda along with other new initiatives aimed at facilitating trade.

Completed FTAs awaiting commencement

  • The negotiations for the Peru Australia FTA (PAFTA) were completed some time ago and PAFTA has gone before the Joint Standing Committee of Trade (JSCOT) on two occasions, at each time leading to a recommendation for binding Treaty action to be taken. However there is still no clarity when the legislation implementing PAFTA will be re-introduced and passed after it lapsed with the dissolution of the 45th Federal Parliament on 11 April 2019. Ratification of the Treaty requires that enabling legislation to be enacted. The main impediment remains the position of the Australian Labor Party which still opposes FTAs with provisions to facilitate skilled migration without labour market testing as well as FTAs with Investor-state dispute settlement provisions. That opposition creates doubts on the passage of the enabling legislation in the Senate
  • The Pacific Agreement on Closer Economic Relations (PACER) Plus has completed the ratification process in Australia, New Zealand and Samoa but other signatories are still working towards their domestic ratification process.
  • The negotiation of the Indonesia-Australia Closer Economic Partnership Agreement (IA-CEPA) and the Australia-Hong Kong Free Trade Agreement (A-HKFTA) have both been completed. Both FTAs are currently subject to review by JSCOT. Assuming that there are recommendations from JSCOT to take binding Treaty action for both FTAs, then enabling legislation would need to be passed. The FTAs would come into effect 60 days after the negotiating parties notify one another that all domestic ratification steps have been taken. Details of the JSCOT procedure for these FTAs can be found here.

FTAs under negotiation

Australia continues to negotiate towards a number of other FTAs, although a number are ‘on hold’ for various reasons. Those actively being negotiated are the Australia-European Union Free Trade Agreement, the Pacific Alliance Free Trade Agreement and the Regional Comprehensive Economic Partnership (RCEP). Of these, the RCEP has been under negotiation for the longest period including a recent negotiating round in Melbourne. However, the proposed FTA with the EU is having the most attention in local press, mainly around the notification of the extensive numbers of ‘geographical indicators’ or ‘GIs’ which the EU is seeking to preserve to the exclusive use of EU producers. The EU has made similar claims for GIs in its negotiations for an FTA with New Zealand. Department of Foreign Affairs and Trade is currently seeking submissions from interested parties in relation to the GIs claimed by the EU. The link to this ‘public objections’ procedure to support Australian producers using the GIs can be found here. If readers have an interest in the issue I would recommend making a submission by the closing date, otherwise a lack of submissions could lead our government to surrender a GI as part of the negotiation process

Prospective Australia-United Kingdom Free Trade Agreement

Readers and those in industry would be well aware of the extensive coverage of the terms of a proposed FTA with the UK. However those negotiations cannot formally commence until the UK has completed its Brexit, whatever form that may take. However, a Joint Trade Working Group, established in September 2016 has met several times seeking to scope out the parameters of a future FTA.

Trade facilitation – making trade easier and more efficient

As readers would be aware, FTAs are not the only way that trade can be enhanced or facilitated. Government and the private sector work on these issues at all times, although a number of government initiatives are worth considering. Some of these are carried through from the previous government but others have only recently been established

  • Government and industry continue to work together through the National Committee on Trade Facilitation (NCTF) established by Australia to comply with its obligations pursuant to the World Trade Organisation’s Trade Facilitation Agreement. This work is conducted by the new ‘Customs Group’ convened by the Department of Home Affairs (DHA) and the Australian Border Force (ABF) and includes the work of a number of NCTF ‘advisory groups’ such as the Trade Facilitation Initiatives Working Group. The NCTF is currently considering a number of facilitation options including single-window for trade and the use of blockchain to facilitate trade.
  • The ‘Border Permits Review’ being undertaken by the DHA and covering enhancements for goods requiring permits for import or export. Industry has been working on this Review including recommendations for creating one ‘portal’ which provides details of all permits required from any agency through an advanced search function. That would also represent the place at which all applications for permits are lodged and tracked.
  • The development of new data sharing and release arrangements between government agencies. This was recommended by the Productivity Commission in a 2017 report with funding provided in the 2018-19 Federal Budget and is led by the portfolio of Prime Minister and Cabinet. This recognises that data is a valuable national asset which needs to be handled more efficiently without compromising necessary privacy and security. Part of this initiative will allow government departments and agencies a wider ability to exchange information (with appropriate protections) This could create the potential to allow for information provided to one border agency to be shared with other border agencies without the need for the same information to be provided separately to a number of border agencies. This would also facilitate a single-window for the sharing of information.
  • Attempts by State governments to advance the coastal shipping agenda, most directly by the Victorian government. The States are also seeking to deal with competition issues at the ports and in the supply chain including the Port Pricing and Access Review recently announced by the Victorian government to be conducted through Freight Victoria

The value in education and engagement

For many years industry had pressed government at Federal and State levels to develop FTAs and other initiatives to enhance trade. The pace of these developments has increased and industry has been provided with a number of opportunities to engage and contribute to the process. On that basis, readers need to remain alert to developments and engage with them to secure the benefits being provided as early as possible together with assisting in the development of new benefits.

If you have any questions or would like advice, please contact us.

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