This article was first published by Daily Cargo News, January 2019.
It really should come as no surprise that Australia and New Zealand have a shared experience and agenda when it comes to customs and trade matters. After all, both countries started out as far-flung outposts of the British Empire, both started with a similar legal framework and both have some similar trade interests and challenges, as well as similar national security interests.
However, it is also fair to say that due to a smaller agenda of trade interests, New Zealand was seen as more active and agile in trade matters, evidenced by its completion of a free-trade agreement with China well before Australia, and being more inclined to initiate actions at the World Trade Organisation (WTO) to protect the interests of its exporters. Even so, the trade, diplomatic and political interests of both nations have often coincided such as the free-trade agreement between Australia and New Zealand and ASEAN (AANZFTA).
There are also some specific examples where developments in New Zealand are similar to the types of issues that are at stake in Australia, such as the below.
New Zealand’s new act
While Australia has continued to labour with a Customs Act which is seemingly bursting at the seams, the New Zealand government recently launched a new Customs and Excise Act. The development of the Act took place over a number of years and included an excellent process of engagement between government and industry through a stakeholder reference group with membership from affected industry in New Zealand. I was fortunate to be able to assist the Customs Brokers and Forwarders Federation of New Zealand (CBAFF) with this process, which involved engagement on the concepts behind the new Act, regular meetings and review of proposed regulatory impact statements and proposed legislation.
I was also involved in presentations around the new Act at successive CBAFF conferences and appeared at a parliamentary hearing in Wellington supporting the passage of the Act.
There are several new services and initiatives in the Act, including some which we have here in Australia, such as an infringement notice scheme (to start on 1 April 2019) and the ability to store records electronically outside of New Zealand, including in the cloud. Some of the others (including the comptroller’s discretion to make and correct assessments of duty) may be of interest here.
At the very least, the process adopted in New Zealand represents an example of what can be achieved as between government and industry, which may form a useful template when we come to work on a revision to our Customs Act here in Australia. Such a revision seems finally to have some prospect of occurring after Assistant Minister for Home Affairs Linda Reynolds challenged industry at the recent industry summit in Sydney to come up with ideas on such a new Act for Australia. Thankfully there are other resources on which to draw including an early version of a revised Act, prepared by the Australian Law Reform Commission, as well as an industry which is keen to work on preparing the new Act.
Free-trade agreement initiatives
Australia and New Zealand have invested considerable resources in pursuing similar outcome in terms of free-trade agreement initiatives. Most recently, the two countries were members of the first six countries to ratify the Trans-Pacific Partnership (TPP-11), which means that it started for both countries on 30 December 2018.
However, that does not comprise the total of the shared initiatives. Following membership of AANZFTA, both countries are pursuing negotiations for the Regional Comprehensive Economic Partnership (RCEP), although hopes of an early resolution and completion to RCEP seem to have stalled again, as have both countries separate negotiations with India for bilateral deals. Further, both countries are working on deals with the Pacific Alliance countries and with the EU and are also committed to the scoping of possible deals with the UK once it has completed its exit from the EU. While these negotiations are not being conducted with Australia and New Zealand negotiating together, there are certainly shared interests and exchanges of information.
GST on imports of low value
Readers would be aware that Australia recently started the levying of GST on low-value transactions (LVTs). After a contentious development process the actual implementation appears to have been relatively smooth. Perhaps encouraged by this, New Zealand has recently announced that from 1 October 2019, in principle, offshore suppliers would be required to register, collect and return New Zealand GST on goods valued at or below NZ$1000 supplied to consumers in New Zealand.
At this stage, the proposal seems to have much in common with the Australian regime although New Zealand is proposing to remove border cost recovery charges whereas Australia has been considering whether to impose them.
Both countries have expressed interests in establishing a comprehensive trade single window being the one place to report to all the relevant border agencies. In both cases, however, there still may be some time before one comprehensive reporting portal is established.
In Australia, the Integrated Cargo System has been characterised as the customs single window so that work on a comprehensive portal is described as the enhanced single window. Our federal government has made funding available to scope out a more comprehensive portal but it is proving to be a challenge with more than 30 agencies having an involvement at the border. Despite the challenge, both industry and government through the National Committee on Trade Facilitation are eager to advance the program recognising the benefits from such a single window concept.
At the same time, New Zealand has actually launched a trade single window covering reporting to Customs, Ministry for Primary Industries, Maritime NZ and the Ministry of Health, although there have been some understandable issues with implementing such a significant platform.
The two countries are also working on a collaborative approach to facilitate trade between them for approved and trusted traders through a mutual recognition agreement and also through the development of a secure trade lane between the two countries which is in the early stages of development and testing. While there are complexities in such arrangements between countries the adoption and pursuit of these initiatives between Australia and New Zealand seem to be an obvious and valuable outcome which will no doubt be supported by industry and government.
These are only a few examples of shared interests and work which we hope will continue into the future.