WORLD TRADE ORGANIZATION
ORGANISATION MONDIALE DU COMMERCE
ORGANIZACIÓN MUNDIAL DEL COMERCIOWT/TPR/M/104/Add.1
3 December 2002
(02-6636)
Trade Policy Review Body
23 and 25 September 2002
TRADE POLICY REVIEW
AUSTRALIA
Minutes of Meeting
Addendum
Chairperson:  H.E. Ms Amina Chawahir Mohamed (Kenya)
This document contains the advance written questions, and replies provided by Australia.1
__________________________________________________________________________________
Organe d'examen des politiques commerciales
23 et 25 September
EXAMEN DES POLITIQUES COMMERCIALES
AUSTRALIE
Compte rendu de la réunion
Addendum
Président:  S.E.  Mme Amina Chawahir Mohamed (Kenya)
Le présent document contient les questions écrites communiquées à l'avance et les réponses
fournies par l'Australie.1
__________________________________________________________________________________
Órgano de Examen de las Políticas Comerciales
23 y 25 de septiembre de 2002
EXAMEN DE LAS POLÍTICAS COMERCIALES
AUSTRALIA
Acta de la reunión
Addendum
Presidente:  Excma. Sra. Ami na Chawahir Mohamed (Kenya)
En el presente documento figuran las preguntas presentadas anticipadamente por escrito,
junto con las respuestas facilitadas por Australia.1
                                                     
1 In English only./En anglais seulement./En inglés solamente.WT/TPR/M/104/Add.1
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ADVANCE WRITTEN QUESTIONS BY MEMBERS AND REPLIES PROVIDED BY
AUSTRALIA
I. Economic environment
(4) Main Structural Policy Developments
(i) Tax reform
Question from the European Union
Question:  We note that despite the introduction of ‘The New Tax System” on 1 July 2000 as part of
the comprehensive tax reform introduced by the Commonwealth Government luxury cars are still
subject to a luxury car tax of 25% on the value in excess of the LCT threshold. The LCT falls
disproportionately on imported cars whose prices in Australia already reflect high import tariffs. The
report furthermore states that “data on the disaggregation of LCT revenues between domestically
produced cars and imported cars are not avail able from the Australian authorities”. The EU is
concerned that this tax, which seems to be bias ed against imports, remains in place as only a few
Australian made models fall under this tax, wherea s more expensive imported cars from the EU are
subject to this tax. Does Australia have any plans to ensure avoidance of such tax discrimination in
the future?
Answer:  Australia has committed itself to creating an efficient and internationally competitive
automotive industry.  Australia has reduced tariffs on passenger motor vehicles from near 60 per cent
in 1985 to the current level of 15 per cent.  Australia is further committed to reducing tariffs to 10 per
cent in 2005.
The Government introduced a luxury car tax (LCT) as an equity measure with the introduction of a
goods and services tax (GST) in 2000.  This was necessary to prevent disproportionate falls in the
price of luxury vehicles compared to standard model vehicles when a GST of 10 per cent replaced the
wholesale sales tax of 45 per cent that had previously applied to luxury vehicles.  It is important tonote that the LCT applies to both imported and domestically produced vehicles without
discrimination.  Price is the sole factor in determining which vehicles are subject to LCT.
The Australian Bureau of Statistics (ABS) collects data on car sales in Australia to be used in relevant
statistical analysis.  To produce a disaggregation of LCT revenues between domestically produced
cars and imported cars would require data collection and analysis at a greater level of detail than iscurrently undertaken and this would involve significant costs.
The Australian Productivity Commission is currently undertaking a report concerning post 2005
assistance arrangements for the automotive manufacturing sector.  This report will make
recommendations on all relevant aspects of the Australian automotive industry.WT/TPR/M/104/Add.1
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II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES
(4) Trade Policy Objectives(ii) Sectoral trade policy objectives
Question from Brazil
Question:  Compared with agriculture, manufacturing  benefited from much higher tariff protection
(though subject to cuts) and industry-specific support has been maintained for automotive,
pharmaceuticals, textiles, clothing, footwear, shipbuilding, and printing and publishing industries.Please provide more detailed information on these industry-specific support measures.
Answer:  The general philosophy on industry assistance has been to shift funding from broad
assistance measures to a focus on strategic investment and encouragement of innovation.  Some of the
remaining assistance schemes exist for purely domestic purposes - for instance, the Tasmanian Freight
Equalisation Scheme is aimed at overcoming the additional costs faced by Tasmanian consumers,compared to mainland Australians as a result of the unique burden of transporting goods by water to
Tasmania.  These measures have little if any trade distorting impact.
In terms of the industry specific schemes, these are spelt out in detail in section IV of the Review.  A
number of the measures compensate manufacturers for the impact of tariffs on inputs to the
production process, and hence overcome aspects of negative assistance.  In regard to some of themeasures, they are part of managing the transition from much higher levels of assistance in the past to
the modest levels that prevail today.
Question from the United States
Question:  - What is the economic rationale for having industry-specific support, as described in
section II(4)(ii)?
Answer:  See the response to the previous question posed by Brazil.
(6) Trade Agreements and Arrangements
(ii) Preferential, regional and bilateral arrangements
Questions from Argentina
Question:  What percentage of Australia's total exp orts and imports goes to or comes from countries
with which it has preferential or free-trade agreements?
Answer:  Countries with which Australia has preferential or free trade agreements accounted for
7.8 per cent of total exports and 5.2 per cent of total imports in FY 2002.
Question:  In paragraph 33 of the Secretariat Report, it is stated that Australia is pursuing a number
of regional trade initiatives with the objective of delivering meaningful gains in market access and
promoting regional economic integration.  Some of these initiatives are listed in the paragraph in
question.  Could Australia provide further informati on on these initiatives?  What is the present state
of the negotiations, and the modalities and sectors that would be covered?WT/TPR/M/104/Add.1
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Answer:
1. Australia-Singapore FTA (ASFTA)
We are hopeful of concluding an FTA with Singapore covering trade in both goods and services in the
coming months.  There have been nine full rounds of negotiations in 2001-2002 and a number of
intersessional meetings. Good progress was made at  the most recent rounds of ASFTA negotiations
held in July and early September.  In most areas the framework text of the agreement is close to
completion.
The agreement will be comprehensive, covering such issues as trade in goods, rules of origin, customs
facilitation, standards, government procurement, services, investment, competition policy, intellectual
property, and electronic commerce.
2. Australia-Thailand Free Trade Agreement
On 30 May, Prime Minister Howard and Thai Prime Minister Thaksin announced the launch of
negotiations for a free trade agreement between Australia and Thailand.  The negotiation of the
“Closer Economic Relations” Free Trade Agreement will be broad in scope, covering not only the
liberalisation of trade in goods and services, but also  cooperation in a range of other areas where there
are real and measurable benefits.
3. AFTA-CER Closer Economic Partnership
During recent consultations between ASEAN Economic Ministers and the Trade Ministers from
Australia and New Zealand, a Joint Ministerial Declaration on the AFTA-CER Closer Economic
Partnership (CEP) was signed, which introduced a fo rmal structured approach to promoting trade,
investment and regional economic integration between ASEAN and CER.
The Ministers agreed to set a target of doubling trade and investment by 2001 to ensure that the CEP
was ambitious and results-oriented, with a practical focus on increasing trade and investment.  Under
the CEP Initial Work Program, priority has been given to elimination of technical barriers to trade andnon-tariff barriers, customs cooperation, capacity building, trade and investment promotion and
facilitation, standards and conformity assessment, electronic commerce and small and medium
enterprises.
Questions from Chinese Taipei
Question:  It is noted that Australia believes that RTAs can complement and help to build momentum
for multilateral liberalization, and that it believes that RTAs should comply strictly with the relevant
WTO rules, including the requirements of covering  substantially all the trade between the parties and
not raising barriers against non-parties.  Could Australia please illustrate with some examples how it
avoids raising barriers against non-participating countries?
Answer:  GATT Article XXIV: 5 requires that Free Trade Areas and Customs Unions do not lead to
the imposition at the outset of duties and other regulations of commerce with respect to WTO
members that are non-Parties to such arrangements that are on the whole higher or more restrictive
than the general incidence of the duties and regulatio ns of commerce applicable in the territory of the
Parties prior to the formation of such a Free Tr ade Area or Customs Union.  Free Trade Agreements
entered into by Australia have been consistent with this provision.  In fact, in the same period thattariffs were eliminated under the Australia  New Zealand Closer Economic Relations TradeWT/TPR/M/104/Add.1
Page 6
Agreement, the main FTA to which Australia is a Party, both Australia and New Zealand undertook
measures to reduce significantly MFN tariffs applicable to imports from third countries.
Question:  The current Canada-Australia Trade Agreement only covers 400 tariff lines.  It would be
appreciated if Australia would explain how this Agreement conforms to the WTO MFN principle.
Answer:  See answer to the following  question from the European Union.
Question from the European Union
Question:  The report indicates that Australia provides preferential tariff treatment to imports from
Canada under the Canada-Australia Trade Agreement (C ANATA). It is stated that these preferences
are implemented through reductions of between 1 an d 15 percentage points from MFN tariff rates and
that they apply to over 400 tariff lines. Could Australia clarify how this scheme conforms with
Australia's MFN obligations under Article I of the GATT 1994? Can Australia please provide further
information on the scheme (including products covered, current preferential tariffs rates, levels ofreduction from applied MFN rates, volume of trade a ffected).  Has CANATA been formally notified to
the GATT/WTO? Please provide any relevant references.
Does Australia consider CANATA to be compatible with its WTO obligations more generally?  If so,
please explain on what basis.
Answer:  The Canada-Australia Trade Agreement (CANATA), negotiated in1960, provides for
continuation of preferential tariff access on a range of goods specified in a 1930 agreement.  The list
of goods has not been added to.   Its significance has declined since it introduction as a result of
sweeping reductions in tariff rates and changes in the patterns of trade.  Today, under the terms of
CANATA, Australia provides margins of preference over the MFN rate ranging from 1% (lumber and
paper) to 15% (car batteries) over the MFN rate on over 400 tariff lines (tariff preferences of 5% on
357 lines and 15% on 2 lines).
The exchange of preferences which was reta ined under CANATA was expressly allowed under
Article I paragraph 2 of the GATT.  This allows retention of margins of tariff preference between
specified Commonwealth countries (including Canada and Australia) stemming from the Ottawa
agreements of the 1930’s.
Question from Japan
Question:  Providing tariff preferences only for Canada under the Canada-Australia Trade
Agreement (CANATA) seems to be inconsistent with the MFN principle. Furthermore, since this
CANATA does not eliminate the duties on "substantiall y all the trade" as stipulated in Article XXIV of
GATT, Japan doubts that the CANATA is a Free Trade Agreement.  Please provide Australia’s
justification in this regard.
Answer:  The Canada-Australia Trade Agreement is fully consistent with Article I:2(a) of the GATT
and the associated annex (Annex A).  CANATA is not a Free Trade Agreement as defined under
Article XXIV of the GATT and accordingly has not been notified as such.
Question from Mauritius
Question:  The assistance that Australia is giving to LDCs is a most welcome one, though it can be
improved.  We would like to know whether Australi a would be ready to extend a similar treatment toWT/TPR/M/104/Add.1
Page 7
small and vulnerable economies and SIDS, in pa rticular those dependent on single commodity
exports.
Answer:  Australia already has a number of arrangements in place to facilitate trade with small and
vulnerable economies and SIDS in the Asia-Pacific Region.  These include the SPARTECA and
PACER agreements, which promote free trade within the region..  The Government is currently
undertaking an analysis of the effects of further liberalising market access for LDCs, some of whom
fit the SIDS category.
(8) FOREIGN INVESTMENT REGIME
Questions from Brazil
Question:  What kind of investment proposal coul d be considered as "contrary to the national
interest"?
Answer:  Under the FATA, the Treasurer may reject a pplications to control an Australian business or
acquire an interest in urban land if he/she considers the matter is ‘contrary to the national interest’.
The presumption is that foreign investment proposals are generally in the national interest and should
go ahead.
The Board provides advice to the Treasurer on large or sensitive proposals; however, it is the
Treasurer, as the authority under the FATA, who defines whether an investment is contrary to thenational interest.
In preparing its advice to the Treasurer, the Board considers whether the proposal is inconsistent with:
- existing government policy and law ⎯ taking the view that existing policy and law
define important aspects of the national interest (for example, environmental
regulation and competition policy);
- national security interests;  and
- economic development.
Where national interest concerns are identified, the Board will seek, where possible, to formulate
conditions which address these concerns.
Question:  Could the limitations/requirements, described in Table II.1, be expanded or reduced based
on the national interest? If positive, how will the treatment concerning the foreign investment already
made in the same sector be dealt with?
Answer:  The table covers Australia’s sensitive sectors (which are determined on national interest
grounds) and the general policy relating to all other sectors. Accordingly, we do not see how the table
should be expanded or reduced based on the national interest and the current policy.
Australia’s foreign investment policy targets investment at the pre-establishment phase. Therefore, a
change in policy relating to pre-establishment would not affect existing investments in Australia.WT/TPR/M/104/Add.1
Page 8
Questions from Canada
Question:  Paragraph 37 describes the role of Australia's Foreign Investment Review Board (FIRB).
Please  describe in greater detail what efforts have been made to enhance the transparency of this
body in order to ensure that it does not act as a barrier to FDI.  In addition, please provide a more
detailed definition of what exactly constitutes Australia's "national interest".
Answer:  The FIRB is a non-statutory body establ ished to advise the Commonwealth Government on
foreign investment policy and its administration.  Responsibility for the Government’s foreigninvestment policy and for final decision ma king on proposals rests with the Treasurer.
Australia recognises the substantial benefits that arise from foreign investment, particularly the
significant contribution it has made and continues to make in fostering important sectors in Australia.
In this light, Australia’s general policy approach, a nd the view shared by the FIRB, is to welcome and
encourage investment.
In preparing its advice to the Treasurer and considering the national interest, the FIRB considers
whether the proposal is consistent with:
- existing government policy and law ⎯ taking the view that existing policy and law
define important aspects of the national interest (for example, environmental
regulation and competition policy);
- national security interests;  and
- economic development.
Where national interest concerns are identified, the FIRB will seek, where possible, to formulate
conditions which address these concerns.
Question:  Paragraph 37 states that Australia’s  commitments under mode 3 in the WTO General
Agreement on Trade in Services (GATS) are limi ted. However, according to paragraph 36, Australia
encourages foreign investment. Given the import ance of foreign direct investment to economic
development, please indicate if Australia has considered the benefits of binding their recent
investment liberalization initiatives under the GATS in order to encourage foreign investment. If so,
please elaborate.
Answer:  Australia has not considered binding these initiatives under the GATS.
Questions from the European Union
Question:  In which sectors have the foreign investment proposals been refused since 1999?Answer:  Real estate has been the major sector.
- 1998-1999 – there were 112 rejections. One was in the service sector and the
remainder in real estate.
- 1999-2000 - All 96 rejections were in the real estate sector.WT/TPR/M/104/Add.1
Page 9
- 2000-2001 - 44 of the 46 rejections were in the real estate sector.  The significant
rejection in this period was in the petroleum industry - Shell’s proposal to acquireWoodside.
Question:  Has there been since 1999 any acceptance of foreign investment proposals that were
subject to certain conditions, or does the regime rely on a simple ‘yes’ or ‘no’ alternative? In case
there have been conditions, what kind of conditions have been set?
Answer:  The Treasurer can conditionally approve proposals to ensure the proposal is in (and remains
in) the national interest. Most real estate proposals are approved on the condition that certain action
occurs (eg for vacant land, development should comm ence within 12 months of approval). Most non-
real estate cases are approved unconditionally. The main kind of conditions that were applied in the
non-real estate sectors were to ensure headquarters and/or other key functions remain in Australia
Question from Chinese Taipei
Question:  .Could Australia please describe the criteria used by the FIRB to judge whether proposals
are "contrary to the national interest"? What are the sensitive sectors?
Answer:  The Foreign Investment Review Board is  a non-statutory body established to advise the
Commonwealth Government on foreign investment poli cy and its administration.  Responsibility for
the Government’s foreign investment policy and for final decision making on proposals rests with theTreasurer.
Under the Foreign Acquisitions and Takeovers Act 1975 , the Treasurer may reject applications to
control an Australian business or acquire an interest in urban land if he considers the matter is
‘contrary to the national interest’. The presumption is that foreign investment proposals are generally
in the national interest and should go ahead.
The Board provides advice to the Treasurer on large or sensitive proposals; however, it is the
Treasurer, as the authority under the FATA, who defines whether an investment is contrary to thenational interest.
In preparing its advice to the Treasurer, the Board considers whether the proposal is inconsistent with:
- existing government policy and law - taking the view that existing policy and law
define important aspects of the national interest (for example, environmental
regulation and competition policy);
- national security interests;  and
- economic development.
Where national interest concerns are identified, the Board will seek, where possible, to formulate
conditions which address these concerns.
The sectors where additional requirements as outlined in Australia’s foreign investment policy (see
www.firb.gov.au) are:
-U r b a n  l a n d
-B a n k i n gWT/TPR/M/104/Add.1
Page 10
- Civil aviation
- Shipping-M e d i a
-B r o a d c a s t i n g
- Newspapers
- Telecommunications
Questions from the United States:
Question: Through the FIRB, Australia screens foreign investors when they seek to establish or
acquire new business interests or purchase additional properties.
Why is it necessary for Australia to so tightly control foreign investment into Australia rather than
restricting investment using laws or regulations for specific activities within a sector?
Answer:  Australia does not “tightly control” foreign investment, rather its policy is liberal and highly
transparent.  Much proposed business activity by foreign investors is not caught by our general
screening requirements or is subject to simplified examination.  For example, the prior notification
threshold for foreign investment in existing businesses is $50 million (including rural businesses) and
$10 million for the establishment of new businesses. Investments below these thresholds are exempt.
Further, there is much simplified processing of pr oposals to invest in existing businesses or establish
new businesses valued between $50 and $100 million.
Acquisitions of developed commercial property valued at less than $50 million are exempt ($5 million
for heritage listed properties) and acquisitions below $100 million are subject to the simplified
processing arrangement. In addition, where the acquisition of commercial real estate is incidental to
the existing/proposed business activities, the acquisition is exempt irrespective of value.
In regard to those larger business proposals over the notification thresholds, there have been very few
rejections.  In 2000-2001, 1.4 per cent of cases were rejected with only two of these outside the realestate sector, and in 1999-2000, there were no rejections in non-real estate sectors.
Australia’s current pre-establishment screening is its preferred mechanism for monitoring foreign
investment for a number of reasons:
- An upfront approval provides certainty to in vestors (i.e. no risk that investors will be
unable to carry on with their business after investments have occurred);
- It can monitor to some extent the types of  investors that participate in Australian
markets (i.e. reduce the risk of harbouring illegal persons and illegitimate
investments);
- The policy has strong bipartisan political and community support. In the absence of
this policy, it would be difficult to satisfy community concerns about levels of foreignownership and control. Australian objectives of maintaining a liberal foreign direct
investment regime and satisfying community concerns would be more difficult to
achieve without  this pre-establishment screening process;WT/TPR/M/104/Add.1
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- It provides for the rejection of proposals that are considered contrary to the national
interest, and in this regard, also considers wider community concerns;  and
- In light of the 1999 liberalisations and the ever increasing transparency of the policy,
Australia’s regime does not discourage wo rthwhile investment, including from the
US who was Australia’s largest single direct investor in 2000-2001 and accounts for
over one third of Australia’s total investment inflow. Businesses continue to get on
with the job of investing in Australia within the current regime.
Australia does have certain sectors where additional requirements exist, for example the Urban  Land
Policy Guidelines  detail the requirements for acquisitions in the real estate sector and the Insurance
Act 1973  governs investment in Australian insurance companies.
Questions: Could you describe in more detail the criteria used by the FIRB to screen potential
investors?
We note that proposals by foreign investors are usually approved unless they are judges “contrary to
the national interest”. What is the definition the FIRB uses in deciding if an investment is “contrary
to the national interest”? Could you please give some specific examples of investments that have met
this standard?
Answer:  Australia has a highly transparent foreign investment regime. The criteria for obtaining
approval for urban land are detailed in the document Urban Land Policy Guidelines  (see
www.firb.gov.au).
The FIRB does not have a definition of the “national interest”.  “Not contrary to the national interest”is a positive test, not a “negative” economic benefits test (i.e. where investors must show net benefit
against a list of criteria). The basic presumption is that foreign investment proposals will bring
economic benefits to Australia and should go ahead. The Government has to find fault with a proposal
for it to be judged contrary to the national interest.
In preparing its advice on business cases to the Treasurer, the FIRB considers whether the proposal is
inconsistent with:
- existing government policy and law - taking the view that existing policy and law
define important aspects of the national interest (for example, environmental
regulation and competition policy);
- national security interests;  and
- economic development.
Where national interest concerns are identified, the FIRB will seek, where possible, to formulate
conditions which address these concerns.
Specific examples of proposals that have been approved and rejected can be found in the FIRB’s
Annual Reports at www.firb.gov.au.WT/TPR/M/104/Add.1
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III. TRADE POLICIES AND PRACTICES BY MEASURE
(2) Measures Directly Affecting Imports(i) Registration and documentation requirements
Questions from Chinese Taipei
Question:  referring to paragraphs 12 and 13, since 1998, minimum documentation requirements of
the Australian Customs Service have remained unchanged and since 1997 approximately 98% of all
imports have been electronically controlled with self-assessment.  Chinese Taipei would appreciatehaving Australia’s answers to the following questions:
(1) Are those documents transmitted via electronic data interchange?
Answer:  In Australia, electronic lodgement of im port entries began in 1991.  When introduced the
system was based on direct, interactive access via dedicated terminals and landlines.
In 1995, an EDI interface was added to the system.  The shift to this new access method has been
progressive, but is not yet complete.  Currently, of the 98% of entries communicated electronically,
53% are transmitted via EDI.
Customs expects a better take-up of EDI access for imports with the introduction of developments
resulting from its Cargo Management Re-engineering (CMR) process.
(2) Could it explain the Internet network of the customs clearance system?Answer:  Customs does not have an Internet networ k as such.  Currently, a single dedicated Value
Added Network (VAN) is used to provide network serv ices.  Users connect directly to the interactive
system, COMPILE, via this VAN.
An alternative is to connect to the system via this VAN using TCP/IP (Internet).  However, this is not
a general Internet access connection.  A general Internet access is one of the options to be provided
under CMR.
(3) Are there any regulations or standards for clearing customs by paying an  equivalent deposit 
for the imports?  If so, please provide the details.
Answer:  Payment of the applicable amounts of duty and taxes is a prerequisite for obtaining
clearance through Customs.  However, in specific circumstances, goods may be cleared based on the
payment of a security equal to the amount of the calculated duty and tax liability.
(ii) Tariffs
Question from the European Union
Question:  We understand that Australia levies a 5% ad valorem tariff on inter alia spirit drinks, in
addition to the index-linked 'exercise equivalent co mponent' levied on one Australian dollar per litre
of absolute alcohol basis. This is considered by indu stry as a 'nuisance' tariff, i.e. more troublesome
to collect that its actual value would justify. Apparently, this view was supported by the Australiangovernment-initiated Productivity Commission Inquiry, which concluded in July 2000 that the 5%
tariff should be abolished ''sooner rather than later, preferably on 1 July 2001 and no later thanWT/TPR/M/104/Add.1
Page 13
1 January 2003''. We understand that the Australian Government decided not to act on this
recommendation, but to retain the tariffs for the time being. Could Australia please comment on thispoint?
Answer:  The 5 per cent ad valorem tariff on inter alia spirit drinks was not removed as recommended
by the Productivity Commission Inquiry.  This was consistent with the government’s response to the
Commission's recommendations that saw it retain the general tariff rate at 5 per cent.
Question:  The report states that the gap between bound and applied MFN rates provides
considerable scope for the Australian authorities to increase applied tariffs within bindings. The
importance of tariff bindings is borne out by th e fact that the very structure of market access
commitments under the GATT and now WTO is centred on the concept of bindings. Given the stances
on other TPRM exercises, Australia appears to r ecognise the importance of bindings amongst other
commitments in the context of time-varying prot ection processes. Could Australia comment on its
intention to bridge the gap between applied and bound rates at the next round?
Answer:  The gap between bound and applied tariffs ra tes is a result of Australia lowering its applied
rates, not the increase of relevant bound rates.  With that in mind, the gap between the two rates
underlines Australia’s commitment to lowing trade barriers well below those negotiated in trade
rounds.  Australia remains committed to its APEC commitment of free trade in the Asia Pacific by2010 and has no intention to increase current applied rates within bindings.
Question from the Republic of Korea
Question:  The Australian Government applies high tariff rates on Korean "Soju" (51.58$A/litt), while
a lower rate is applied on wine (9.94$A/litt).  Please  inform us of the detailed criteria which explains
the varied tariff rates on alcoholic beverages.
Answer:  The import tariff applied to wine and potable alcoholic spirits is 5%.  An excise applies to
potable spirits at a general rate which is currently $A57.17 per litre of alcohol.  This applies equally toAustralian and imported spirits.  For imported spirits, it is collected at the border through the
Australian Customs Tariff.  Internal taxes applicable to wine also apply equally to domestic and like
imported product.
(2) Measures Directly Affecting Imports
(ii) Tariffs
Questions from Brazil
Question:  The Australian tariff regime embodies a degree of escalation.  The tariffs of some of the
Australian products are higher than those in other developed countries. Could Australia provide some
clarification as to the possibility of reducing such tariffs?
Answer:  Australia's policy of reducing applied tariffs is focused on tariffs in general, rather than
differentiating between various stages of the production process.  Further reductions in applied tariff
rates will be considered within the context of Australia's overall trade policy.
Question:  Please explain why changes in the custom s tariff have had little impact on the pattern of
tariff escalation since 1997/98. Exceptions involved wood and furniture and chemicals industries,
which were the object of less pronounced escalation; for these industries, in the past, the domesticWT/TPR/M/104/Add.1
Page 14
production of raw materials and inputs or semi-processed items received more protection than
subsequent production stages.
Answer:  Australia's policy of reducing applied tariffs is focused on tariffs in general, rather than
differentiating between various stages of the production process.  As a result, the historical patterns of
tariff escalation may remain while Australia moves towards a position of free trade.  As the graphs in
the Review demonstrate, average applied tariff rates have fallen for imports across all stages in the
production process; the graphs show that tariffs on fully processed goods in most sectors have fallensignificantly since 1998.
Question from the United States
Question:  In para. 27, the Secretariat document notes the significant difference between Australia’s
bound rates and its applied rates.  What is the genesis or rational for this disparity?  Has Australia,
since the establishment of the WTO, had occasion to in crease any of its applied rates to or near the
bound rates?
Answer:  Over 96 per cent of Australia's tariff rates are bound, in line with our WTO commitments
agreed during the Uruguay Round.
Australia has been engaged in a programme of reducing its applied tariff rates since the mid-1980s
and is committed to continue this process.  Average applied tariff rates have fallen from 6 per cent atthe time of the previous Review to their current level of 4.6 per cent.  Australia is committed to
further reductions in tariffs in the two relatively highly protected industry sectors of textiles, clothing
and footwear and passenger motor vehicles in 2005.  Australia is currently reviewing post-2005 tariff
arrangements for the PMV industry, and will shortly undertake an examination of post-2005
arrangements for the TCF industry.  Australia believes that its approach to reductions in applied tariffs
is a strong reflection of its commitment to free and open trade.
Australia has not increased any of its ad valorem applied tariff rates since the conclusion of the
Uruguay Round.
Question from the Republic of Korea
Question:   In contrast to the relatively low rate of average tariffs on general industrial goods, high
tariff rates, which are three times higher than average rates of 4.3% are applied on passenger motor
vehicles and textiles, clothing and footwear.  In addition, in 1997 the Australian government decidedthat the high tariff rates of the year 2000 will be maintained until 2004.
Such a decision, in effect, is to maintain trade distortion for the purpose of protecting domestic
industry. Even the proposed new tariff rates which will be introduced in 2005 are higher than those of
other main trading countries.
It is our view that the tariff reduction plan should be implemented at an earlier stage and a much
larger reduction than what is proposed is needed. What is the view of Australian government on this?
Answer:  The Australian Government undertook an extensive review of the textiles, clothing and
footwear (TCF) industry in 1997. This review re sulted in a commitment by the Government to
maintain tariff levels at year 2000 levels unti l 2005. This commitment provides an environment of
certainty for Australia's TCF firms as they adjust to increasing global competition.WT/TPR/M/104/Add.1
Page 15
The Government has announced a commitment to undertake a substantive inquiry in late 2002 of post
2005 assistance to the TCF industry.
Question from the European Union
Question:  Although Australia plans to reduce appl ied tariffs for apparel and certain finished textiles
by 1 January 2005, tariff rates on these items (17.5%) can still be described as a tariff peak. Could
Australia please indicate how it intends to reduce or eliminate its tariff peaks on textiles thus
facilitating access to the Australian market? Given th e presence of tariff escalation in the structure of
its tariffs, could Australia comment on how it intends to eliminate it?
Answer:  The Australian Government undertook an extensive review of the textiles, clothing and
footwear (TCF) industry in 1997. This review re sulted in a commitment by the Government to
maintain tariff levels at year 2000 levels unti l 2005. This commitment provides an environment of
certainty for Australia's TCF firms as they adjust to increasing global competition.
The Government has announced a commitment to undertake a substantive inquiry in late 2002 of post
2005 assistance to the TCF industry.
Question from Chinese Taipei
Question:  Chinese Taipei compliments the Australian Department of Industry, Science and Tourism
on having undertaken a review of “nuisance” tariffs in July 1998 and on having reduced tariffs tozero on 267 lines in December 1999.  It would be appreciated if Australia could provide information
about its plans to continue this policy and could indicate the products on which tariffs might be
reduced to zero in future.
Answer:  The Department of Industry, Tourism and Resources has since undertaken an exercise to
identify some additional items that could be reduced to zero.  No decision has been made about action
on the items identified.
(e) Tariff quotas
Questions from Brazil
Question:  The Secretariat report states that although tariff quotas have remained in place for five
cheese items, they are apparently applied in a flex ible/liberal manner. Which are the criteria for
defining such tariff quotas?
Answer:  The tariff quota applies to most importe d cheeses and curd, whether fresh, grated, powdered
or processed.  Some exceptions are the roquefort and stilton types of blue veined cheeses,  and the
camembert and brie types of surface ripened cheeses.  Fetta and Kasseri are subject to the tariff quota
but other cheeses wholly made from goats milk are not.  (The cheeses listed above as exceptions enter
Australia duty free outside the tariff quota).  All cheese imports from New Zealand, Papua New
Guinea and South Pacific Forum Island countries enter Australia free of duty outside the tariff quotaunder free trade agreements.
Cheese tariff quota entitlements are administered by the Australian Customs Service as follows:
- Details of the tariff quota administrati on system, including the names of the quota
holders are published in Commonwealth of Australia Gazettes.WT/TPR/M/104/Add.1
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- Tariff quota allocations are valid for one full year (1 July – 30 June)
- Tariff quota allocations are issued to individual companies, in direct proportion to
their past imports under the tariff quota
- The tariff quota applies to cheese falling within 5 subheadings of the Harmonized
Commodity Description and Coding System (HS).  Tariff quota allocations are not
subdivided and tariff-quota-holders are free to use their entitlement to import any
cheese variety, or to source product from any supplier country
- As allocations are based on past import performance, individuals or companies that
do not utilise their allocation will either lose their allocation or have it reduced in the
following year
- Importers can apply for tariff quota by transfer from existing tariff-quota-holders,
either directly or through brokers.  The transfer of tariff quota between importers is acommercial transaction undertaken according to market conditions.  The recipient is
required to complete an application form and forward it to the Australian Customs
Service for confirmation.
The tariff quota allows for the import of 11,500 tonnes of cheese per year at a tariff of A$0.096/kg.
The in-quota rate for Developing Countries is $0.096/kg less 5%.  The duty on imports above thetariff quota level is $1.220/kg.  For LDCS, the out-of-quota rate is $1.220/kg less 5%.
Question:  Under chapter III, item 22 of the Secretariat report, Australia declares that, according to
its market access commitments, there is a tariff quota of 11.500 tones for cheese imports. During
2000, the out-of-quota rate was reduced from $A 1,294 to $A 1,220 per ton, while the in-quota rate
has been kept at $A 96 per ton. Still, since 1995, quota allocation has been based on the actual usage
of quota over the previous 23 months (excluding quota transfers), and that quota may be accorded
upon submission of application to the Australian Customs Service. Could Australia provideinformation on procedures required for new exporters to obtain quota allocation?
Answer:  Quotas are allocated to importers.  A new e xporter who wishes to export cheese to Australia
within the tariff quota should refer to the published list of quota holders and endeavor to build a
commercial relationship with the importer.  This is available electronically on  the website - details of
Cheese Quota Allocation holders for 02-03 which were listed in Commonwealth of Australia GazetteNo TC 02/27 dated 10/7/02 with a further 54 Quota Allocations holders for listed in Gazette no TC
02/28 dated 17/07/02.
(j) Trade Preferences
Question from Norway
Question:  Australia stresses in its own report (WT/TPR/G/104) the importance of special initiatives
for the least developed countries (LDCs). Despite this tariffs up to 5 % remains on a variety of
products. We wonder whether Australia intends to  follow Norway and EU's "Everything but Arms
initiative" and eliminate all tariffs from LDCs?
Answer:  Australia’s access arrangements for goods  originating in least developed countries (LDCs)
already compares favourably with those of other developed countries.  The arrangements of somedeveloped countries involve exceptions and phase-in arrangements for sensitive industries and the useWT/TPR/M/104/Add.1
Page 17
of restrictive quotas, often in those sectors of most interest to developing countries, such as
agriculture.
The policy of successive Australian governments has been to accord imports from LDCs a margin of
preference of 5 percentage points below the general tariff rate.  As a result, about 85 per cent of
Australia’s tariff lines are duty-free for LDCs and over 90 per cent of imports from LDCs enter
Australia free of duties.  Imports from LDCs that are subject to duty are essentially textiles, clothing
and footwear (TCF) and passenger motor vehicle (PMV) items, including parts – but these items stillreceive the 5 percentage points preference.
The Government is currently undertaking an analysis of the effects of further liberalising market
access for LDCs.  This is in response to the number of international commitments we have made to
the objective of duty-free and quota-free market access for all LDC products.
(iii) Customs valuation
Question from Chinese Taipei
Question:  Australian valuation legislation requires buying commissions, inland freight and inland
insurance to be included in the duty-paying-value of imported goods.  Please clarify how this practice
complies with the Agreement on Implem entation of Article VII of the GATT 1994.
Answer:  The treatment of buying commissions a nd inland freight and inland insurance in the
Customs Act 1901  (Customs Act) is considered to be consistent with the WTO Agreement on Customs
Valuation for the reasons outlined below.
It is noted that paragraph 38 could be misinterpr eted: the typical buying commission, where the agent
is acting only on behalf of the purchaser, is not included in the dutiable value of goods; and the
references to inland freight and inland insurance relate to foreign inland freight and foreign inland
insurance.  Foreign inland freight and foreign inland  insurance are included in the dutiable value of
goods, but domestic (i.e. Australian) inland freight and domestic inland insurance are not included inthe dutiable value of goods.
Buying commissions  – When buying commissions are paid prior to the place of export, they may be
included in the purchase price of the goods.  Howe ver, buying commissions are to be excluded from
the price actually paid or payable for the goods, and are not, therefore, dutiable because of
Article 8(1)(a)(i) of the Valuation Agreement.
Australia determines the customs value of almost all imported goods under section 161 of the
Customs Act, i.e. using the transaction value method.  The transaction value method uses the price
actually paid or payable for the imported goods and includes ‘price related costs’.
‘Price related costs’ are defined in section 154 of the Customs Act, and includes commissions, other
than buying commissions.
An interpretation of buying commissions is provided in section 155 of the Customs Act.  Section 155
of the Customs Act  is designed to restrict a deduction for buying commission to those cases where the
agent is acting solely for the purchaser, and not to  those cases where the agent acts for both the seller
and the purchaser in the transaction or where the agent is in fact the vendor.WT/TPR/M/104/Add.1
Page 18
Inland freight/inland insurance  – Article 8(2) of the Agreement provides for the inclusion or the
exclusion, from the customs value, of the cost of insurance and the cost of transport of the importedgoods to the port or place of importation.
Australia determines the customs value of imported goods at the place of export, which is typically at
the free-on-board (FOB) point.  The cost of foreig n inland freight and foreign inland insurance up to
the place of export are included in the customs value.  These costs are included as they form part of
the definition of ‘price related costs’ in section 154 of the Customs Act.
(v) Import prohibitions, restrictions, and licensing
Comment from the United States
We wish to commend Australia for the detailed and comprehensive submission this month of its
responses to the Questionnaire on Import Licensi ng Procedures, contained in G/LIC/N/3/AUS/2.
Transparency in this area of trade is essential, and we appreciate the effort made in submitting thisinformation.
(vi) Government procurement
Question from Singapore
Question:  We note from the Secretariat's report that Australia remains the only major industrialised
country that is not a signatory to the plurilateral Government Procurement Agreement (GPA), and isthus not bound by principles and rules on transparency and non-discrimination in this area.  The
report also states that the Australian authorities have been considering whether Australia should
become a party to the GPA.  We would like to  know when Australia intends to join the GPA?
Answer:  Australia has no plans to accede to the WTO Agreement on Government Procurement.
Australia has not signed the GPA because it considers that the Agreement contains a number of flaws.
Market access commitments are based on mutual reciprocity; there are complex and onerous
administrative provisions and costs including those associated with statistical requirements; and theGPA does not necessarily encourage open and transparent systems of government procurement.
Many of the major industrialised countries have acceded to the GPA on a highly conditional basis
which potentially makes these markets more restrictive than Australia’s and, enables them to
discriminate against non-GPA Members.  Further,  some Members of the GPA have been able to
exclude large portions of their government purchasing markets from foreign competition.
Questions from the United States
Question:  Does Australia have any plans to seek accession to the WTO Agreement in Government
Procurement? If so, when? If not, please explain why Australia is not pursuing accession to the GPA
when it is the only major industrialized country that is not a party to the GPA
Answer:  Please see above (i .e. Question from Singapore)
Question:  Why is it necessary for Australia to continue to use procurement as a major instrument of
economic policy?WT/TPR/M/104/Add.1
Page 19
Answer:  Australian governments are significant purchasers of goods and services and as such can
elect to use their respective positions in the marketplace to promote their economic and social goalsand, obtain the best value for money when expending public funds.
Question:  How does Australia ensure that all suppliers have the same access to procurement
information?
Answer:  All Australian jurisdictions make their procurement policies publicly available via the
Internet.
Question:  Please describe the tendering procedures that are used by agencies in Australia.
Answer:  Australian jurisdictions do not prescribe procurement methods. The procurement process
should match the procurement requirements. Procurement methods can range from sole source to
public tender. However, all jurisdictions make information regarding their procurement framework
available on the internet.
For example the Commonwealth Procurement Framework guidelines can be assessed via the Internet
at: http://www.finance.gov.au/ctc/publications /purchasing/cpg/commonwealth%5Fprocurement%F
guide.html
Question:  Please describe the extent to whic h the Central Government places restrictions on
procurement.
(a) Does the central Government place any restrictions on the types of procurement methods that
government agencies may use?
Answer:  No.  Please refer to question 4 above.
(b) Is a notice of a procurement opportunity publis hed for every procurement?  What information
is required to be included in such notices?
Answer:  Commonwealth government agencies mu st gazette all open business opportunities on the
Government Advertising website, located at:  www. ads.gov.au  An open bus iness opportunity is a
publicly available opportunity to do business with Government, including, but not limited to,
invitations to bid, expressions of interest, offer proposals, request for information, requests for tender,
and disposals.
Details of business opportunities must include:
- Ministerial portfolio, department or agency, division or group, branch or office and
postcode of the office;
- Reference number allocated to the department or agency;
- Description of goods or services sufficient to identify the nature and quantity of the
requirements, and any delivery period that may apply;
- Closing date and time of invitation;- Place of delivery postcode;WT/TPR/M/104/Add.1
Page 20
- Name, telephone numbers and email addresses of contact officers for supply of
documents, or responses to commercial and ethnical enquires;  and
- Australian and New Zealand Standards Commodity Classification (ANZSCC) code
for the goods or services required.
Question:  Does Australia impose any restrictions on the development of technical specifications?  If
so, please describe.
Answer:  The Commonwealth encourages specifications  to be outcomes based, to promote flexibility
and innovation and no restrictions are imposed on technical specifications.
Question:  Are suppliers informed of all the evaluation criteria before they submit their tenders?
Answer:  Yes.  Tender documentation identifies the selection criteria on which the assessment of the
tenders is based.  However, individual weightings for each criterion may not be disclosed.
Question:  How much time is allowed for suppliers to submit tenders?Answer:  There are no prescribed time periods and the time for submission of tenders will vary
according to the complexity of the tender.
All Commonwealth contracts and standing offers wi th an estimated value of $2,000 or more must be
reported and published on the publicly available Gazette Publishing System located at:
www.contracts.gov.au within six weeks of entering into the contract.
Question:  Are losing suppliers provided with an opportunity to receive an explanation as to why their
tender was not selected?
Answer:  Yes.
Question:  Does Australia provide domestic review procedures to enable suppliers to challenge
procurement decisions?  If so, please describe.
Answer:  At the Commonwealth level, the Commonwealth Purchasing Advisory and Complaints
service (PACS) answers purchasing inquiries a nd deals with procurement concerns. Under the
Financial Management and Accountability ACT 1997 , the Chief Executive of each Commonwealth
agency is responsible for procurement decisions. So  while it is outside the PACS Charter to overturn
purchasing decisions made by departments and ag encies, PACS can organise meetings between
suppliers and buyers to help resolve differences.  Suppliers also have access to:
- The Commonwealth Ombudsman;  or- A Court of law.
Question:  Please describe the authority of the central government over procurement by the states?
Answer:  State and Territory governments are resp onsible for their own procurement regimes and the
Commonwealth government has no authority over their purchasing polices and practice.WT/TPR/M/104/Add.1
Page 21
Questions from Switzerland
Question:  Since 1991, Australia ensures national treatment and absence of any preferential and
discriminatory measures to New Zealand unde r the Australia and New Zealand Government
Procurement Agreement.  What experiences did Australia gather under this Agreement?  Could
Australia envisage extending this treatment to the GPA Members on a reciprocal basis?  If no, why?
Answer:  The provisions of the Australia-New Zealand Agreement on Government Procurement
provide for a single marketplace for government procurement.  Australia is not considering accedingto the GPA for the reasons set out above (i.e. Question 1 from Singapore).
Question:  To which extent are price preferences used in practice by public purchasers?
Answer:  The use of price preference policies varies across State and Territory jurisdictions . The
Commonwealth of Australia does not have price preference policies.
Question:  What modifications were made to the Commonwealth Procurement Guidelines in 2002?
Answer:
Changes to the content of the CPGs
March 1998 Edition Revised Edition Explanation
Value for Money is one of the core
principles governing Commonwealth
ProcurementValue for Money is the core principle
governing Commonwealth Procurement.All other principles involved in effective
procurement contribute to achieving
Value for Money outcomes.
Detailed references to the PerformanceImprovement Cycle and the CompetitiveTendering and Contracting PublicationsReference to the Performance Improvement
Cycle and the Competitive Tendering andContracting PublicationsThe CPGs provide the framework for
Commonwealth procurement and
hyperlinks to the content of the twodocuments will enable agencies to easily
access the detail.
Value for money test Hyperlink to Value for Money toolkit. The CPGs provide agencies with the
framework for Commonwealth
procurement highlighting mandatoryrequirements.
Value for Money toolkit provides
agencies with additional best practice
guidance material, including the Value
for Money test.
Whole of Government Purchasing
Arrangements referencing Common Use
ArrangementsRevised to address Strategic Common Use
Arrangements (CUAs).The December 1997 the Government
ceased existing CUAs and decided thatwhere appropriate strategic CUAs could
be put in place in areas where a Whole-
of-Government arrangement wouldresult in significant savings for
Government.
Reference to Pre-qualification scheme Whole-of-Government supplier pre-
qualification arrangements addressed –
Endorsed Supplier Arrangement (ESA).
Hyperlink provides agencies with access to the
ESA homepageIn December 1997, Government agreed
to the establishment of a pre-
qualification scheme.
Agencies must ensure outsourced
service providers abide by ESArequirements when engaging sub-
contractors.
(Cont'd)WT/TPR/M/104/Add.1
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March 1998 Edition Revised Edition Explanation
Detailed references to Openness and
TransparencyMandatory requirements and framework are
addressed under Accountability and
Transparency.The CPGs provide the framework for
Commonwealth procurement the
reference to openness was beingincorrectly interpreted to mean that
public tenders must always be used. The
issue of openness is now covered under
transparency.
Industry consultation requirement for
information technology tenders to be made
available in draft form to potential tenders
for at least one month to allow for
comment before finalisationNot referenced. This requirement is no longer
appropriate as industry is aware of the
IT outsourcing programme and
extensive consultation is undertakenwith industry throughout any
outsourcing process
Tesltra Transigo ™ reference Gazette Publishing System (GaPS) and the
Government Advertising website are
mentioned and contain hyperlinks.Updated to reflect the recent changes in
the mandatory requirements in gazettal
mechanisms. The change reflects the
move from Telstra Transigo ™ to the
new system, the Gazette Publishing
System (GaPS).
List of notification details to be included
in Telstra Transigo ™Not referenced. Notification details are contained on the
GaPS website by virtue of the data fields
that are required to be completed. Ahyperlink is provided to GaPS.
Exercising discretion in deciding theprocurement methodProcurement Methods. Repositioned to Best Practice section.
Conditions for effective competition Reflected in Model Industry Development
Criteria.Conditions for effective competition are
addressed under the revised Model
Industry Development Criteria (MIDC)
Reference to Accredited Purchasing Units(APUs)Not referenced. Commonwealth Procurement Circular
98/3 removed the requirement for
agencies to establish APUs.
Requirement for agencies to provide
information on request to Members of
Parliament, Senators and the public after
the tabling of annual reports as specified inthe Requirements for Departmental
Annual ReportsNot referenced. The Department of the Prime Minister
and Cabinet has just completed a review
of the requirements for Departmental
Annual Reports and the revisedrequirements do not contain this
provision.
Reference to ISO9000 certification Not referenced. Government policy does not mandate
quality assurance or specify specific
quality assurance standard.
A hyperlink has been established to the
Standards Australia website that
provides agencies with a complete menu
of formal quality assurance options,
including the previously mentioned
ISO9000.
Section 6 Support for other
Commonwealth policiesHas been streamlined. Relevant components have been re-
positioned within other areas of the
revised CPGs.
A hyperlink has been used in the Value
for Money section to link directly to
Additional legislation and Resources.
Requirement for Year 2000 compliant
equipmentNot referenced. The critical date has passed and the
reference is no longer required.
(Cont'd)WT/TPR/M/104/Add.1
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March 1998 Edition Revised Edition Explanation
PACS reference Reference to PACS has been moved to the
introduction of the revised document.Addresses the concern raised by the
JCPAA in their Report 369 Australian
Government Procurement that “ there is
a need for this to be more heavily
promoted. The next version of the CPGs
should include information about PACSin a prominent part at the front of the
CPGs. Its current position in the CPGs
is restricting awareness of this service”
– p:26.
N o t  r e f e r e n c e d  i n  c u r r e n t  C P G s  a s  i t  i s  aproposed policy change.Requirement for outsourced service providers
to use the Endorsed supplier Arrangement
when purchasing information technology and
major office machines.Benefits of this scheme are widely
recognised (eg. Financial viability of a
company) and this policy change would
enable the Commonwealth to enforcethe arrangement to the sub contractor
level.
Not referenced in current CPGs. Private Financing Initiatives.
Hyperlink to private financing advice.Reflect the recent Government decision
on Private financing
Not referenced in current CPGs. Requirement for contestability and competitive
neutrality for Commonwealth agencies.The 1995 Competition Principles
Agreement signed by Federal, State andTerritory Governments ensures
Government businesses do not have a
competitive advantage over their private
sector competitors.
Not referenced in current CPGs . Requirement for outsourced service providers
to comply with the Government’s affirmative
action requirements.Illustrates commitment of the
Commonwealth to affirmative action.
Enables the Commonwealth to enforce
its commitment to the sub contractorlevel.
Not referenced in current CPGs. Requirement for agencies to ensure that an
outsourced service provider maintains
appropriate systems for recording decisions
and the reasons for making themGood business practice and addressed
through contract provisions that identify
the need for access to information when
requested by the project officer.
Not referenced in current CPGs Requirement for agencies to ensure they refer
to Comcover.
Includes a hyperlink to Comcover site.Reflects the role of Comcover for
Commonwealth agency insurance andassociated risk management
requirements.
Not referenced in current CPGs. Requirement for agencies to list contracts
exceeding $100,000 on their websites.As a result of Senate Order 192,
Government Agency Contracts (Murray
Motion).
Not referenced in current CPGs. Definition for SMEs has been included. JCPAA Inquiry 369, Australian
Government Procurement ,
Recommendation 5 requiring OSB and
Finance to develop a definition covering
SMEs and include in the next edition of
CPGs.
Not referenced in current CPGs Model Industry Development Criteria (MIDC)
threshold lowered to $5 million.Reflects recent Government decision on
MIDC threshold
Not referenced in current CPGs Foreign Exchange.
Hyperlink to Finance Circular 2000/03.Address concerns regarding the need to
consider foreign exchange when
procuring goods or services overseas.
Not referenced in current CPGs. Agencies to use Whole of Government
Telecommunications Arrangements and Shared
Systems Initiative.Clearly identify requirement for
agencies.
Not referenced in current CPGs. Agencies are able choose their own legal
service providers.
Hyperlink to Attorney-General's advice.Reflect legal services directions
Question:  What are the implications of the St rategic partnership Industr y Development Agreements
Programme (SPIDA) for public procurement?WT/TPR/M/104/Add.1
Page 24
Answer:  SPIDA was concluded in June 2002
Question:  Does the SPIDA also include for forei gn firms a requirement of 70% local value-added of
exports?  If yes, how does it comply with the TRIMS Agreements?
Answer:  See above.
Question:  Despite the fact that Australia is a strong advocate of a WTO Agreement on Transparency
for public procurement, Australia has not joined the GPA and maintains preferential schemes for
local firms.  Is public procurement essential to  pursue these policies?  Are there other means to
realise the same objective?
Answer:  Australia has chosen not to accede to the WTO GPA for the reasons stated above (Question
1 Singapore refs).   Australia’s government procurement policies and practices are consistent with its
WTO obligations.
Questions from the European Union
Question:   Australia remains the only major industrialis ed country that is not a signatory to the
Plurilateral Agreement on Government Procurement (GPA). Considering that the Australian legal
framework appears to be sufficiently developed to comply with the GPA requirements and the
openness of its procurement system appears to be sim ilar to that of most GPA parties, is Australia
considering now to accede to the WTO plurilateral Agreement on Government Procurement?
Answer:  No
Question:   The Australian authorities have been considering Australia’s overall interest to become a
Party to the GPA. What was the main argumen t (in 1997 when the position was adopted) against
GPA membership? Are these same conditions still apply five years later? What aspects would
Australia like to change in the current GPA system  to make it more attractive to its interest?
Answer:  Please refer above (i .e. Question 1 from Singapore).
Question:   The report refers to access on-line for records and reports of tendering processes. Is there
any electronic procurement system in Australia? If so, could you provide with a description of such a
system? What is Australia planning in the area of electronic procurement?
Answer:  The Commonwealth Government of Australia has recently conducted a trial of the
Commonwealth Electronic Tender System (CETS). As a result of the trial, various improvements
have been identified. The National Office of the Information Economy is currently re-developing thesystem to implement the suggested improvements. Once the system has been upgraded, it will be
available for all Commonwealth agencies to use if they wish. The pilot site of the CETS is
www.tenders.gov.au.
For further information on the Commonwealth Govern ment’s e-procurement policies, please visit
www.noie.gov.au and http://www.govonline. gov.au/projects/eprocurement/index.htm
Question:   Domestic price preference and local-content requirements in government procurement are
a usual way to promote local industry and set-as ide some sectors from foreign competition. Will
Australia re-consider this policy and the cost in terms of budget expenditure (better value for money)
as well as the need to introduce healthy competition between Australian and New Zealanders and
foreign bidders?WT/TPR/M/104/Add.1
Page 25
Answer:  The Commonwealth of Australia’s industry development requirements as identified in the
Commonwealth Procurement Guidelines and Best Practice Guidance  require agencies governed by
the Financial Management and Accountability Act 1997(FMA Act)  to ensure that tender
documentation does not discriminate against Australian and New Zealand industry, particularly small
and medium enterprises.  This approach is consistent with Australia’s obligations under the ANZ
Agreement on Government Procurement.
Value for Money is the core principle governin g Commonwealth procurement. Industry development
is one of the principles underpinning Value for Money. Any industry development requirements are
considered as part of the overall value for money consideration.
The Industry Development Principle does not disc ourage competition between Australian, New
Zealand and foreign bidders. The underlying premise of the Industry Development Principle is to
create competitive Australian and New Zealand Industries.
For further information on the Commonwealth Procurement Guidelines and Best Practice Guidance
please visit www.finance.gov.au/ctc/publicat ions/purchasing/cpg/co mmonwealth_procurement_
guide.
Question:   Where agencies purchase overseas goods in preference to Australian or New Zealand
goods, they must demonstrate that suppliers from these two countries had opportunities to compete.What kind of evidence has the agency to provide on the opportunity to compete? How is
confidentiality of foreign bids ensured in such a case?
Answer:   When developing tender documentation, Commonwealth agencies subject to the Financial
Management and Accountability Act (FMA) are required to ensure that there is nothing in the tender
documentation that would prevent Australian or New Zealand companies from being able to compete
for Commonwealth Government business. The tender documentation becomes part of the audit trail to
demonstrate that suppliers from these two countries have not been discriminated against.
Questions from Canada
Question:   Paragraph 48 states that Australia has maintained its requirement for sourcing at least
10% of its public procurement from domestic or New Zealand small- and medium-sized enterprises
(SMEs).  Please explain how this 10% amount is determined and what constitutes a small and
medium-sized business.
Answer:  All Commonwealth agencies governed by the Financial Management and Accountability
Act 1997  are required to source at least 10% of their procurement from small and medium enterprises.
The Department of Finance and Administration conducts an annual survey using the information
available from the Commonwealth Purchasing and Disposal Gazette (the Gazette).
All agencies are required to report all agency agreements, Commonwealth contracts and standing
offers with an estimated liability (including Goods and Services Tax where applicable) of $2,000 or
more in the Gazette, within six weeks of entering into the agreement.
The Commonwealth Procurement Guidelines and Best Practice Guidance publication identifies small
and medium enterprises as:WT/TPR/M/104/Add.1
Page 26
Except for the Information Technology sector, small and medium enterprises are defined as
businesses registered in Australia and New Zealand that employ less than the full time equivalent of
200 persons.  Sub categories of this definition include:
small enterprises employing less than the full time equivalent of 20 persons;  and
micro enterprises employing less than the full time equivalents of 5 persons.
The information technology sector has a tailored small and medium enterprise definition that applies
in the Government's IT Outsourcing Initiative, and the IT component of the Model IndustryDevelopment Criteria for Major Project’s scheme.  For the purposes of major ICT contracts, an SME
is defined as a body corporate incorporated in Australia or New Zealand which, together with its
related bodies corporate and Parent Entities, has an average annual revenue over the last four financial
years of less than A$500 million.
Questions from Chinese Taipei
Question:  It is noted that Australia is still not a signatory to the WTO Agreement on Government
Procurement (GPA).  In view of Australia’s sizeable government procurement market and its
economic status, and considering the benefits that would accrue from greater liberalization of the
market, could Australia please explain the rationale behind the fact that it is not applying for
membership of the GPA.  In addition, Chinese Taipei would appreciate receiving in due course thestatistical information regarding government proc urement at the Commonwea lth level and the State
level.
Answer:  With regard to Australia’s membership of the WTO GPA please refer above (Question 1
from Singapore).
The following statistics are provided for the Commonwealth government:
Financial year 2000-2001, the Commonwealth government spent approximately AUD 13.5 billion on
goods and services (this figure includes expenditure by agencies covered by the FinancialManagement & Accountability Act (FMA) and Commonwealth Authorities and Companies Act
(CAC).
Questions from Hong Kong China
Question:   Note that Australia has been considering whether to become a party to the Agreement on
Government Procurement for some time.  We are interested to know the progress of the assessment,and whether Australia has reached any decision and if so, the details of it.
Answer:  Please refer above (i .e. Question 1 from Singapore).
Question:   Note that Australia still maintains certain discriminatory practices in government
procurement at the Commonwealth and States level. In terested to know if Australia has any intention
or plan to eliminate them, and if so, the detail s of them, such as the implementation timetable.
Answer:  Australia’s government procurement policies and practices are consistent with it’s WTO
obligations.  Australia’s procurement policies are consistent with Australia’s obligations under the
ANZ Agreement on Government Procurement.WT/TPR/M/104/Add.1
Page 27
Questions from the Republic of Korea
Question:   Australia is the only advanced economy which is not a member of the WTO GPA. In fact,
foreign companies' access to the government procur ement market in Australia has been hampered by
some discriminatory government procurement po licy of the Australian government for industry
development purposes .
(a) For instance, state governments of Australia are currently providing a 10-20% preference
margin to Australian and New Zealand companie s at the bidding. Commonwealth government also
considers "industry development criteria" apart from bidding price when it chooses the candidate for
a project worth over 10 million Australian dollars.
(b) In this regard, significant improvement in the market condition for government procurement
is needed and accession to WTO GPA is highly reco mmended. What is the view of Australia on this?
Answer :   (a)   The Commonwealth government’s industr y development requirements as identified in
the Commonwealth Procurement Guidelines and Best Practice Guidance  (CPGs) require agencies
governed by the Financial Management and Accountability Act 1997(FMA Act)  to ensure that tender
documentation does not discriminate against Australian and New Zealand industry, particularly small
and medium enterprises.
Value for Money is the core principle governin g Commonwealth procurement. Industry development
is one of the principles underpinning Value for Money. Any industry development requirements are
considered as part of the overall value for money consideration.
The Industry Development Principle does not disc ourage competition between Australian, New
Zealand and foreign bidders. The underlying premise of the Industry Development Principle is to
create competitive Australian and New Zealand Industries.
For further information on the Commonwealth Procurement Guidelines and Best Practice Guidance
please visit www.finance.gov.au/ctc/publications /purchasing/cpg/commonwealth_procurement_guide.
Officials are required to be mindful of industry policy goals and ensure that they are familiar with the
value for money principles set out in the CPGs. The CPGs provide guidance on the key purchasing
principles, including the relationship between industry development and Value for Money.
(b) Please refer above for Australia’s position on WTP GPA membership (i.e. question 1.
Singapore).
Questions from Brazil
Question:  Regarding paragraph 51, page 43 of the Secretariat report, does Endorsed Supplier
Arrangement (ESA) function as a list of suppliers for governmental agencies/entities send invitation to
take part on bidding process? If negative, do governmental agencies/entities consult any lists of
suppliers to invite for bidding process? If affirmative, is there a possibility for potential foreignsuppliers to be included in these lists of suppliers used by federal government agencies entities? If
affirmative, how should those suppliers proceed to be included? Which are the requirements to be
qualified in those lists? Is there preferential treatment in this regard for suppliers from any
region/country besides Commonwealth?WT/TPR/M/104/Add.1
Page 28
Answer:  The endorsed supplier arrangement (ESA) list  is used by agencies to source suppliers for
selected or invited procurement processes, particularly in the IT and Major Office Machines (MOM)industry sector.  The online search has tools to assist in developing lists.  ESA is the only central list
but is limited to three industry sectors: IT and MO M, Commercial Office Furniture and Auctioneering
Services. Foreign suppliers may apply for endorsement and are assessed equally with Australian
suppliers.  If successful they are listed with all other endorsed suppliers. All potential providers can
apply on line at http://www.esa.finance.gov.au   In  order to become endorsed, potential suppliers must
undergo the following checks Financial viability, pr oven service performance, ability to service
Australian based customers, industry development  (IT and MOM only). There is no preferential
treatment for suppliers from any region/country, including Australian  suppliers.
Question:  Regarding paragraph 48, page 42 of the Secretariat report, what are the criteria used to
characterize a small business? Regarding the principle of national treatment that may exist in othercommercial agreements to which Australia is a Pa rty, do small business from countries Parties in
those agreements have equal treatment (with prefer ential access conditions) in Australia government
procurement?
Answer:  The Commonwealth Procurement Guidelines and Best Practice Guidance  define a small
business as a company that employs less than the full time equivalent of 20 persons. Australiacurrently has a government procurement agreement with New Zealand. Under this agreement, New
Zealand companies are treated equally with Australian companies.
Question:  Are bidding processes of the Department of Defence excluded from the coverage of
Commonwealth or other commercial agreement to wh ich Australia is a Party? Is there any other
entity/agency excluded from the coverage in commercial agreements to which Australia is a Party?
What kind of restrictions exist in th e Department of Defence procurements?
Answer:  Defence's contracting templates and procurement policies are based on the Commonwealth
Procurement Guidelines and, as such, Defence adheres to Government procurement policy.  There are
currently no exclusions relating to Defence nor any other entity or agency. Where the Government has
passed enabling legislation to enact an international treaty, agreement, arrangement or UN Security
Council resolution that restricts trade, the Department of Defence is bound by that restriction.  In
addition, some Defence procurements require the contractor to be cleared to a specific security level.
Question:  Are there any eco-labelling or eco-audit offsets in the Australian government procurement
regulations and laws in the central and sub-central level that may be used in government
procurement? If affirmative, please indicate  its legal provisions and examples of their use.
Answer:  No.
Question:  Are there any social clause requirements in the Australian government procurement
regulations and laws in the central and sub-central level that may be used in government
procurement? If affirmative, please indicate  its legal provisions and examples of their use.
Answer:  Section 3 of the Commonwealth Procurement Guidelines and Best Practice Guidance
identify additional legislation, policies and resources that may impact on procurement decisions. This
section highlights Commonwealth Government policies such as disability considerations andindigenous opportunities. A copy of the CPGs can be found at www.finance.gov.au/ctcWT/TPR/M/104/Add.1
Page 29
Question:  Does Australia use the Build-Operate-Transfer (BOT) as a purchasing method? Is the
Build-Operate-Transfer (BOT) included in the cove rage of commercial agreements, such as the
Commonwealth and others?
Answer:  The Build-Operate-Transfer purchasing model is referred to in Australia as a “BOOT”
scheme or Build-Own-Operate-Transfer.  This scheme is essentially the same as a BOT, given the
assumption that in order to transfer an infrastruc ture asset back to Government, the private sector
must also own the asset during the operational period.
BOOT projects have been widely used in Australia, and are more commonly applied by State
Governments rather than at the Federal level due to the ability to adopt a user-pays system for a
variety of State infrastructure.
Variations on this model, such as build own operate (BOO) or design, build, finance maintain
(DBFM) schemes are also applied on the basic principle that a procurement must deliver value formoney, no matter what the delivery mechanism.  This is also consistent with the Financial
Management and Accountability Act 1997  that states that Chief Executives of government agencies
have an obligation to promote the efficient, effective and ethical use of resources.
In relation to agreements, Australia is a signatory to the Australian and New Zealand Government
Procurement Agreement  that means that Australia and New Zealand are treated equally and as one
market for procurement.
Question:  Is there a consolidated and single national legislation on guidelines and procedures on
government procurement or does each entity/agency/state/territory have its own? Are States and
Territories obliged by international agreements made by the Central Government on government
procurement field?
Answer:  The Commonwealth Procurement Guidelines and Best Practice Guidance  (CPGs)
publication issued by the Minister and Finance and Administration governs procurement at theCommonwealth of Australia. All agencies governed by the Financial Management and Accountability
Act 1997  must have regard to the CPGs when conducting procurement.
State and Territory Governments have their own legi slation and policies to govern procurement within
their jurisdiction.
The coverage of international agreements to States  and Territories is not automatic. During the course
of negotiations, the scope of the international agreement will be developed and this may or may not
extend to include States and Territory government procurement.
Question:  Which classification system is employed to goods, services and public works in Australia?
Answer:  The Commonwealth of Australia currently uses ANZ Standard Commodity Classification
(SCC) system for the Commonwealth Purchasing and Disposals Gazette. The Commonwealth’sPurchasing and Disposals Gazette that performs two functions:
- The Government advertising site  (www.ads.gov.au) for gazettal of all public
business opportunities; and
- The Gazette Publishing System (GaPS) (www.contracts.gov.au) for gazettal of
agency agreements, contracts and standing offers.WT/TPR/M/104/Add.1
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The Commonwealth is currently reviewing the classification system.
(viii) Contingency measures
(a) Anti-dumping and countervailing measures
Questions from Brazil
Question:  In paragraph 57, it is also mentioned that “the anti-dumping system was to be reviewed
before June 2002”. Could Australia  inform if this review has alre ady been concluded? If so, what
were the modifications implem ented or to be implemented?
Answer:  This review was to be undertaken by the Productivity Commission.  However the Australian
government is still considering when a review is to take place.
Questions from Chinese Taipei
Question:  According to paragraph 57, the Australian Customs Service (ACS) is now the sole agency
in charge of the entire process of anti-dumping investigations, while it is the Trade Measures ReviewOffice (TMRO) that reviews an appeal against a final finding, consisting of an interpretation of
existing information rather than further investigat ion.  Please indicate how many appeals have been
lodged with TMRO and in how many cases the inte rpretation by TMRO has differed from the final
finding of ACS.  Referring to paragraph 57, the an ti-dumping system was to be reviewed before
June 2002.  Please provide information on the results.
Answer:  The TMRO has reviewed 10 appeals since its establishment.  These appeals were to the
Minister’s final decision.  The TMRO can recommend either the Minister affirm their decision or that
the Minister order Customs to reinvestigate aspects of the case.  In 8 cases the TMRO recommended
the Minister’s decision be affirmed.  One case was reinvestigated, the result was the affirmation of the
original decision.  One case is still under re view. This review was to be undertaken by the
Productivity Commission.  However the Australian gove rnment is still considering when a review is
to take place.
Question:  According to the Agreement in Implem entation of Article VI of the GATT 1994, throughout
an anti-dumping investigation, all interested parties shall have full opportunities for the defence of
their interests.  Given the fact that Australia allows a shorter period (155 days) than most other
members for such investigations, is this a sufficient amount of time for foreign exporters to be able to
properly prepare and defend their cases?
Answer:  Australia’s new system is consistent with WTO requirements, and merely removes
replications to streamline the process for all inte rested parties.  The shorter time period for the
investigation results in a reduction of uncertainty, beneficial to exporters and all interested parties.
Thoroughness has not been sacrificed in the shortening of the timeframes.  As the legislation allows,
the Minister has regularly granted extensions of time for investigation deadlines.   The need to givesome exporters more time to prepare submissions is one of the reasons extensions have been granted.
An additional safeguard to thoroughness and transparency is the addition of an appeal mechanism
absent from the previous process.WT/TPR/M/104/Add.1
Page 31
Questions from the European Union
Question:  We note that the anti-dumping system was to be reviewed before June 2002. Could
Australia please indicate if this was the case and what is the outcome of this review?
Answer:  This review was to be undertaken by the Productivity Commission.  However the Australian
government is still considering when a review is to take place.
Question:  According to Art 5.5 of the WTO Agreement on the enactment of Art VI of the WTO
Antidumping Agreement Australia has agreed to noti fy the government of a concerned exporter before
and about the initiation of an anti-dumping investigatio n. According to information received from EU
Member States this has not been always respected in recent cases. Can Australia please confirm that
the obligations of the WTO Agreement will be respected and what will be done to avoid such
unconformity?
Answer:  Australia confirms its commitment to articl e 5.5 of the Agreement and confirms that it is the
policy of the administrating authority to notify the government of a concerned exporter before the
initiation of an anti-dumping investigation.
Questions from the Republic of Korea
Question : Australia is the world’s 5th most frequent antidumping investigation user. From 1996 to
2001, it initiated 111 antidumping investigations. According to the Secretariat report, only 37% oftotal investigations during 1998-2000 (17 of 52 investigations) lead to actual antidumping measures.
This evidences the fact that the anti-dumping investigations are being misused.
In addition, the Australian government abolished the independent Anti-dumping Authority and
designated the Australian Customs Service to be solely in charge of the investigation, reducing the
investigation period from an average of 215 days to 155.
It may enhance the effectiveness of the remedy me asures from a viewpoint of Australian domestic
producers. However, there is a concern that full investigation and opinion gathering to protect therights of subject foreign companies cannot be  guaranteed in such a short period of time.
Considering that in many case s the announcement of an investigation itself inflicts irreparable
damage to the industries concerned, more careful initiation of antidumping measures is requested.
Answer:  Australia’s imposition of anti-dumping measures has decreased steadily since 1998.  The
amount of cases initiated is higher than the amount of cases resulting in the impositions of measures.This is not evidence that the cases were not worthy of investigation.  However, Australia notes that it
has recently amended its application form to request more comprehensive information from
applicants.  The new form came into use in August 2001.  Since then five investigations have been
initiated and one has been completed.  That investigation resulted in the imposition of measures.
Australia’s new system is consistent with WTO requirements, and merely removes replications to
streamline the process for all interested parties.  Th e shorter time period for the investigation results in
a reduction of uncertainty, beneficial to exporters and all interested parties.  Thoroughness has not
been sacrificed in the shortening of the timeframes.  As the legislation allows, the Minister has
regularly granted extensions of time for investigation deadlines.   The need to give some exporters
more time to prepare submissions is one of the reasons extensions have been granted.  An additionalWT/TPR/M/104/Add.1
Page 32
safeguard to thoroughness and transparency is the addition of an appeal mechanism absent from the
previous process.
Question from Chinese Taipei
Question:  Referring to paragraph 59, during the period under review Australia decided to increase
the existing domestic adjustment assistance to the swine meat industry, while in 1998/1999 it
considered the introduction of border measures on imports of swine meat.  Please describe what
measures are being taken in the context of domestic adjustment assistance.
Answer:  An integrated package of business assistance programs was provided in 1998/99 over 4
years to assist the pork industry to adapt to change, assess new market opportunities and become more
competitive.  For those pork producers who were in serious financial difficulty assistance was
provided to exit the industry.  The pork package has now terminated and the industry is now receiving
no product specific adjustment assistance.  The pork package was notified in Australia’s domesticsupport notifications in 1998/99 (G/AG/ N/AUS/30), 1999/2000 ( AUS/36), in 2000/01
(AUS/41/Rev.1) and final payments  will not notified in the next notification.  Grants to pork
processors and producers under the package were notified as de minimis  support under the AMS
provisions and grants to pork producers who had decided to leave the industry were notified as
“green” box support.
Questions from Brazil
Question:  In paragraph 56 (chapter III.2) of the Secretariat report, it is mentioned that 19 anti-
dumping investigations resulted in definitive measures (involving anti-dumping duties and minimum
export price undertakings). Could Australia inform  how many anti-dumping duties were applied on
the basis of the “best information available”?
Answer:  Best information available was used in four cases.  This information is set out in Australia’s
return to the WTO.  The code ‘FA’ is used to represent best available information.
Question:  Chart III.5 indicates that in 1999 most of the investigations were concluded without the
imposition of anti-dumping measures; in 2000, apparently, in almost half of the investigations
terminated anti-dumping measures were adopted; Could Australia elaborate on this evolution? Has
the reform of the anti-dumping system in Australia implemente d in July 1998, referred to in
paragraph 57, had any impact on the relative increase of investigations concluded with imposition ofanti-dumping measures?
Answer:  Australia’s imposition of anti-dumping measures has decreased steadily as an absolute
number since 1998.  However, Australia notes that it has recently amended its application form to
request more comprehensive information from applicants.  The new form came into use in
August 2001.  Since then five investigations have been initiated and one has been completed.  Thatinvestigation resulted in the imposition of measures.
Question:  In paragraph 57, it is mentioned that the Australian Customs Service (ACS) is now the sole
agency in charge of the entire investigation. Could Australia elaborate on the operation of this
agency as an investigating authority?
Answer:  The Australian investigating authority r eceives applications, examines them to determine
whether they justify initiation, conducts the investigation, and then makes recommendations to the
Minister for Justice and Customs.  The Minister is the decision maker in the process.  AdministrativeWT/TPR/M/104/Add.1
Page 33
review is provided for through the Trade Measures Review Office which is not a part of the
investigating authority and is fully independent.  Judicial review is also available through the Federaland High courts.
Question:  In paragraph 57 it is mentioned that “after an initial screening period of up to 20 days, the
investigation is now undertaken as a single-stage procedure of 155 days”, that is, less than 6 months.
Could Australia explain the meani ng of “initial screening period”? Please explain as well the
meaning of “single stage procedure”. Does this exp ression mean that preliminary determinations are
not made?
Answer:  Initial screening period is the time between the lodging of an application and the initiation of
the investigation.  During this time the investiga ting authority examines the application to determine
whether there is sufficient evidence to justify the initiation of an investigation as set out in article 5.3
of the Agreement.
Single stage procedure does not mean that preliminary determinations are not made.  Single stage
procedure refers to the new process being undertaken by one agency in comparison with the old
process, which involved two agencies and some replication of processes.  Preliminary affirmative
determinations can be imposed in the new system.
Question:  Considering that Article 6.1.1 of the AD Agreement establishes that “Exporters or foreign
producers receiving questionnaires used in an anti-dumping investigation shall be given at least 30
days for reply”, and that footnote 15 establishes that “the time limit for exporters shall be counted
from the date of receipt of the questionnaire, wh ich for this purpose shall be deemed to have been
received one week from the date on which it was sent to the respondent or transmitted to the
appropriate diplomatic representative (…)”, in the hypothesis that no extension of the 30 day-period
was conceded, the investigating authority would have only 4 months to conclude the investigation,
that is, a very short time period. Could Australia inform if, in the case of a request for an extension ofthe 30-day period, this extension is conceded? How does Australia conciliate this short time period
for the conclusion of the investigation with the general principle that the interested parties should
have the opportunity to defend their interests?
Does Australia normally carry out on-the-spot investigations? If so, are the 155 days sufficient to
allow those investigations?
Answer:  Australia’s new system is consistent with WTO requirements, and merely removes
replications to streamline the process for all inte rested parties.  The shorter time period for the
investigation results in a reduction of uncertainty, beneficial to exporters and all interested parties.
Thoroughness has not been sacrificed in the shortening of the timeframes.  Australia does visit
interested parties including Australian industry and exporters.  The submissions of the interestedparties are thoroughly verified at these visits.
As the legislation allows, the Minister has regularly granted extensions of time for investigation
deadlines.   The need to give some exporters more time to prepare submissions is one of the reasons
extensions have been granted.  An additional safeguard to thoroughness and transparency is the
addition of an appeal mechanism absent from the previous process.
Question:  In paragraph 57, it is mentioned that  “anti-dumping and countervailing measures continue
to be subject to a five-year clause, with reviews undertaken prior to the expiry date, if there is a
request for the action to continue”. Could Austra lia inform how many “sunset reviews” it hasWT/TPR/M/104/Add.1
Page 34
conducted during the period under review?  If any, how many were concluded with a decision to
maintain the action?
Answer:   The Australian authority invited Australian industry to apply for continuation of measures
beyond the sunset date in 33 cases.  Six sunset re views were conducted.  In five cases the measures
were continued.  One case is still pending.
Question:  In paragraph 57, it is also mentioned that “appeals against a final finding entail a review
by a Trade Measures Review Officer (TMRO) of th e interpretation of existing information rather than
further investigation”. During the period under revi ew, how many were the reviews initiate by the
TMRO? And how many were the decisions that reverse d the result of the investigation? In how many
cases was a decision not to adopt a measure reverted? And in how many cases was a decision to
adopt a measure reverted?
Answer: The TMRO has reviewed 10 appeals since its establishment.  These appeals were to the
Minister’s final decision.  The TMRO can recommend either that the Minister affirm their decision or
that the Minister order Customs to reinvestigate aspects of the case.  In 8 cases the TMRO
recommended the Minister’s decision be affirmed.  One case was reinvestigated, and the result was
the affirmation of the original decision.  One case is still under review.
Question:  Is the TMRO an administrative tribunal? Is it independent of the authorities responsible
for the determination or review in question?
Answer: The Trade Measures Review Office is not a part of the investigating authority and is fully
independent.
Question:  Does this review conducted by the TM RO impede the recourse to a judicial review?
Answer:  Reviews conducted by the Trade Measures  Review Office do not limit the recourse to a
judicial review.
Questions from Thailand
Question 1 refers to the investigation of certain steel shelving and expresses concern over the
investigation period.
Answer:  The investigation period is the period over which the investigating authority examines
whether dumping has occurred.  The investigation period in this case commenced at the date of the
first importations of the steel shelving from Thailand.
Question 2 refers to the investigation of pineapple concentrate and canned pineapple and expresses
concern over the method used to establish a dumping margin.
Answer:  The investigation of pineapple involved an unusually large group of Thai producers.  For
this reason sampling methods consistent with article 6.10 of the Agreement were used and the data of
five Thai exporters was chosen for verification.  An examination of the Thai exporters costs wasundertaken by an independent international accounting firm in order to confirm the approach of the
investigating authority.  Unfortunately, that ex amination concluded the costs did not reasonably
reflect the costs associated with the production and sale as required by article 2.2.1.1 of the
Agreement.  However, the investigating authority wa s able to construct costs that reasonably reflected
the costs of production and sale for one exporter.  This normal value was used as a basis for otherWT/TPR/M/104/Add.1
Page 35
exporters.  Keeping in line with the investiga ting authority’s commitment to transparency this
approach was clarified in the statement of essential facts pursuant to article 6.9 of the Agreement.
Question 3 refers to the investigation of pineapple concentrate and canned pineapple and expresses
concern over provisional measures and securities.
Answer:  The WTO panel decision (hot rolled steel) precludes anti-dumping duties being imposed on
the basis of the best available information.  Australia has been re-examining its legislation regarding
the establishment of duty following this decision.  In the meantime the Thai exporters sought a reviewby the TMRO.  The outcome of the review had the potential to alter the basis for the anti-dumping
duties.  Unfortunately, that review took some time to complete and did not result in an alteration of
the basis of the anti-dumping duties.  Australia notes that the Thai exporters affected can apply for a
further review of the measures.  Australia will not await the outcome of any further review before
proceeding to re-examine the basis of which duties are imposed.
Question 4 refers to the investigation of pineapple concentrate and canned pineapple and expresses
concern over the confidentiality issues involved employment of a private auditing firm.
Answer:  Australia is committed to preserving the confid entiality of all interested parties.  All the staff
involved from the private accounting firm were subject by contract to the same legislative
confidentiality provisions as officers of the investigating authority and all work was required to beundertaken on the premises of the investigating authorit y.   Further, the private accounting firm staff
were subject to comprehensive security checks identical to those applied to the officers of the
investigating authority.
(a) Standards
Question from Chinese Taipei
Question:  Referring to paragraph 61, a 1992 Commonwealth/State Agreement on Mutual
Recognition allows a product that is in conformity with the requirements of at least one State orTerritory to be sold throughout Australia.  Please clarify whether this agreement on mutual
recognition can be applied to all other products, apart from those mentioned as examples, pressure
equipment and bicycle helmets.  If there are some other products that are exceptions, further
information would be appreciated with an explana tion of how the standards requirements throughout
Australia can be met.
Answer:  The Commonwealth Mutual Recognition Act 1992 (the Act) provides that if a good is
legally saleable in one state or territory then it is legally saleable in all other states and territories. The
Act contains a list of goods and laws relating to goods that are permanently exempt from the operation
of the Act. The goods permanently exempt are, firearms and other prohibited or offensive weapons,
fireworks, gaming machines, and pornographic material. Laws relating to goods that are permanentlyexempt fall into the following categories: quarantine, environmental issues, firearms and offensive
weapons and the classification of publications, films and videotapes. Therefore, by definition all other
goods are covered by the operation of the Act.
The issue that Chinese Taipei has raised is in relation to the “use” of a small number of goods. This is
where, for example, a construction helmet may be legally saleable between jurisdictions, however,only construction helmets that meet the Australian Standard can be used on construction sites. So as
can be seen in this particular case there is no restriction on the sale of the helmet, however, the “use”WT/TPR/M/104/Add.1
Page 36
of the helmet in certain circumstances may be subject to the health and safety regulations of a
particular jurisdiction.
It should be noted that very few goods are regulated by use and that for the vast majority of goods the
mutual recognition arrangement for sale is adequate.
The Mutual Recognition Arrangement is the subject of  a review to be held in 2003. The issue of sale
and use is likely to be examined as part of the review.
Question from Switzerland
Question:  Paragraph 66 says that technical regulations often refer to voluntary standards prepared
by Standards Australia International (SAI). What is the ratio between technical regulations that refer
to voluntary standards in comparison to technical regulations that do not make such a reference?
Answer:  Standards Australia advise that approx imately 2400 Australian voluntary standards (or 40
per cent) are referenced in Australian legislation/regulations. We have no data on the total number oftechnical regulations. It should be noted the high level of alignment of Australian Standards with
international standards as outlined in paragraph 72.
Question:  In many countries there is only one accreditation service that provides for accreditation of
calibration, testing, inspection and certification bodies. Is it planned to merge NATA and JAS-ANZ in
the near future?
Answer:  The Government is not currently considering a merger of NATA and JAS-ANZ. Moreover
NATA is a private company whereas JAS-ANZ is an unincorporated entity created by treaty between
Australia and New Zealand. A merger as su ch would not be a simple transaction.
Question:  Switzerland is interested in inform ation concerning the application of the MRA between
Australia and the European Community. Does the impl ementation proceed smoothly or are there any
problems mentioned in this context? Is it planned to amend the EC-Australian MRA (especially the
sectoral annexes)? When will this procedure be completed?
Answer:  The implementation of the MRA the European Community has proceeded without any
significant problems and is being utilised to facilitate trade by both parties.
Australia has made a number of representations to the European Community in relation to the “rules
of origin” clause and updating the existing sectoral coverage to incorporate changes to European
Directives and Australian legislation. These issues are likely to be the focus of discussions at the nextJoint Committee meeting of the parties due to take place in late October 2002.
Question:  What efforts are being made to guarantee in future the normal 60-day comment period for
notifications being submitted by Australia?
Answer:  Australia is fully conscious of the 60 day period recommended by the Committee for the
submission of comments on draft technical regulations and procedures for assessment of conformity.
We take seriously the notification recommendations of the Committee and seek to meet them.  As the
Secretariat notes in its Report, the timeliness of our notifications has been improving.WT/TPR/M/104/Add.1
Page 37
Australia is keen to promote increased transparency in the notification process and, for its part, will
shortly be reminding Agencies responsible for promulgating technical regulations and procedures forassessment of conformity of the desired 60 day notification period.
Question from Thailand
Question:  Australian authorities require that steel wire and PC strand/wire imports into the country
must be approved by ACRS and NATA respectively. In  view of the Thai stee l industry, involvement of
domestic producers of like products in standard certifying body(ies) has raised doubts on grounds oftransparency. This practice is in place despite there being a competent international testing and
certification institute accepted by the steel industry worldwide. We would like to hear Australia’s
rational for not accrediting such institute.
Answer:  The Commonwealth Government has a clear policy of adopting international standards and
implementing arrangements for the mutual recogniti on of conformity assessment in both the regulated
and voluntary sectors. This means that regulators are encouraged to accept test reports from NATA
accredited laboratories and NATA MRA partners.
There is no internationally recognised standard for reinforcing steel.  There is a sound technical basis
for the Australian standard.  The standard has been investigated on competition policy grounds and
cleared by the Australian Competition and Consum er Commission and the Australian Building Codes
Board.  Both bodies are independent of the steel industry.  That the standard is not a technical barrier
to trade is readily demonstrated by the rapid growth in imports of reinforcing steel.  The Australian
standard for pre-stressing strand is under review.  There are sound technical reasons driving the need
for this review.
(b) Sanitary and phytosanitary regulations
Questions from Brazil
Question:  Import prohibitions and restrictions in the form of stringent quarantine or technical
requirements have remained in place, in principle to preserve, inter alia, public health, the
environment, safety, or security. Please explain what efforts have been made to align certain
compulsory standards to international standards as  well as to improve coordination and international
cooperation in this regard. (WTO notification, MRAs, APEC).
Answer:  Australia is a major exporter of unprocessed agricultural products.  Of the $30 billion of
agricultural exports, only a small percentage is in highly processed form.  Most has not been subject
to any process that would inactivate pathogens of concern to an importing country.  For this reason,
maintenance of Australia’s highly favourable animal and plant health status is therefore critical to its
ability to trade in world markets – hence our very conservative approach to quarantine.
In this respect Australia is in a markedly different position to many other countries that are net
importers of agricultural products or which process most of their agricultural exports to the consumer-
ready stage.
Australia’s history and comparative geographic isolation as well as traditionally strong quarantine
system has resulted in a favourable animal and plant health status that we intend to maintain.
Where current international standards such as those endorsed by OIE and IPPC meet Australia’s
needs with regard to protection from pests and diseases, they are included in import protocols.WT/TPR/M/104/Add.1
Page 38
However, many do not provide an adequate level of quarantine protection and Australia legitimately
exercises its right under the SPS Agreement to impose stricter controls, justified on scientific groundsand supported by a transparent risk analysis.
Furthermore, relevant international standards do not always exist. This is particularly notable for plant
biosecurity where there are a comparatively large number of pests and diseases infecting a large
number of host species, but there are only a very small number of standards (none of which cover
specific pests or diseases).
Question:  Changes have been introduced to Australia's SPS and quarantine requirements to cover,
inter alia, genetically modified organisms and biot echnology; a formal import-risk-analysis process
has also been introduced. How does Australia plan on preventing formal import-risk-analysis
processes from being trade-distorting or from  relying on mechanisms that distort trade?
Answer:  The SPS Agreement requires governments to base their quarantine measures on
international standards, or on a transparent science-based risk analysis. Australia uses a formal,
science-based process to assess risks associated with proposed imports of animals, plants and their
products. Our process is open and transparent and keeps stakeholders, including the trading partners
requesting access, informed of the progress and detail of scientific assessments. Few other countries
have import risk analysis processes as articulated and transparent as Australia’s.
We have consulted extensively in developing a ne w Administrative Import Risk Analysis Framework.
Despite receiving copies of relevant draft documents, none of our trading partners took up the
invitation to comment. The proposed new Framework builds on experience to date with the current
process and aims to improve consultation and further enhance the scientific rigour and transparency of
quarantine decisions.
Question:  Prohibition or stringent quarantine/permit/inspection procedures (see section (ix)(b))
currently apply on more than 150 agricultural/livestock products (e.g. cereals, fresh fruit, vegetables,meat, poultry products) and other items (e.g. used machinery) considered to have the potential to
introduce contamination or disease. What are the technical studies necessary to state that a certain
product falls under such legislation?
Answer:  The SPS Agreement requires governments to base their quarantine measures on
international standards, or on a transparent science-based risk analysis. Australia uses a formal,science-based process to assess risks associated with proposed imports of animals, plants and their
products. Our process is open and transparent and keeps stakeholders, including the trading partners
requesting access, informed of the progress and detail of scientific assessments. Few other countries
have import risk analysis processes as articulated and transparent as Australia’s.
We have consulted extensively in developing a ne w Administrative Import Risk Analysis Framework.
Despite receiving copies of relevant draft documents, none of our trading partners took up the
invitation to comment. The proposed new Framework builds on experience to date with the current
process and aims to improve consultation and further enhance the scientific rigour and transparency of
quarantine decisions.
Questions from the European Union
Question:  The report states that Australia’s SPS measures are considered by a number of its trading
partners as unduly stringent, and that it maintains many quarantine and food standards which are
stricter than international standards, claiming that these are necessary to reflect domestic needs. TheWT/TPR/M/104/Add.1
Page 39
EU agrees that it is the right of sovereign states to set their appropriate level of protection. The major
concern of the EU, however, is the very lengthy process, which is invoked each time an IRA is made.This usually involves publication of an issues paper, which in itself may take several years, with
lengthy comment periods. This is then followed up by the risk assessment process, which again make
take several years. Furthermore, Australia frequently goes beyond international standards without
publishing scientific justification for this action.
Answer:  The SPS Agreement requires governments to base their quarantine measures on
international standards, or on a transparent science-based risk analysis. Australia uses a formal,
science-based process to assess risks associated with proposed imports of animals, plants and their
products. Our process is open and transparent and keeps stakeholders, including the trading partners
requesting access, informed of the progress and detail of scientific assessments. Few other countries
have import risk analysis processes as articulated and transparent as Australia’s.
We have consulted extensively in developing a ne w Administrative Import Risk Analysis Framework.
Despite receiving copies of relevant draft documents, none of our trading partners took up the
invitation to comment. The proposed new Framework builds on experience to date with the current
process and aims to improve consultation and further enhance the scientific rigour and transparency of
quarantine decisions.
The time taken to complete IRA’s by Australia is comparable with other countries which have strong
quarantine systems and which used science-based risk analysis to develop their quarantine policies.
Australia is a major exporter of unprocessed agricultural products.  Of the $30 billion of agricultural
exports, only a small percentage is in highly processed form.  Most has not been subject to any
process that would inactivate pathogens of concern to an importing country.  For this reason,
maintenance of Australia’s highly favourable animal and plant health status is therefore critical to its
ability to trade in world markets – hence our very conservative approach to quarantine.
In this respect Australia is in a markedly different position to many other countries that are net
importers of agricultural products or which process most of their agricultural exports to the consumer-
ready stage.
Australia’s history and comparative geographic isolation as well as traditionally strong quarantine
system has resulted in a favourable animal and plant health status that we intend to maintain.
Where current international standards such as those endorsed by OIE and IPPC meet Australia’s
needs with regard to protection from pests and diseases, they are included in import protocols.
However, many do not provide an adequate level of quarantine protection and Australia legitimately
exercises its right under the SPS Agreement to impose stricter controls, justified on scientific grounds
and supported by a transparent risk analysis.
Furthermore, relevant international standards do not always exist. This is particularly notable for plant
biosecurity where there are a comparatively large number of pests and diseases infecting a large
number of host species, but there are only a very small number of standards (none of which cover
specific pests or diseases).
Question:  With cases such as the Danish pig meat or the Australian ban on European products on
FMD grounds, the EU has experienced situations which support the contention that Australia may be
using the WTO process to hinder access to its market for as long as possible. We would therefore like
to request that AustraliaWT/TPR/M/104/Add.1
Page 40
- expedites market access requests for products covered by the SPS Agreement,
- uses current knowledge as much as possible to adopt interim solutions which
minimise trade disruption pending the final assessment,
- uses international standards as much as possible, and provides scientific justification
for any departure from them .
Answer:  The SPS Agreement requires governments to base their quarantine measures on
international standards, or on a transparent science-based risk analysis. Australia uses a formal,science-based process to assess risks associated with proposed imports of animals, plants and their
products. Our process is open and transparent and keeps stakeholders, including the trading partners
requesting access, informed of the progress and detail of scientific assessments. Few other countries
have import risk analysis processes as articulated and transparent as Australia’s.
Denmark already has access to the Australian market for its pig meat.  The EU’s reference to this is
obscure. With regard to the suspension of potentially contaminated products from EU member
countries during the 2001 FMD outbreak, it should be noted that Australia permitted the resumption
of trade immediately adequate technical information had been supplied to demonstrate that it was safe
to do so.
Australia is a major exporter of unprocessed agricultural products.  Of the $30 billion of agricultural
exports, only a small percentage is in highly processed form.  Most has not been subject to any
process that would inactivate pathogens of concern to an importing country.  For this reason,
maintenance of Australia’s highly favourable animal and plant health status is therefore critical to its
ability to trade in world markets – hence our very conservative approach to quarantine.
In this respect Australia is in a markedly different position to many other countries that are net
importers of agricultural products or which process mo st of their agricultural exports to the consumer-
ready stage.
Australia’s history and comparative geographic isolation as well as traditionally strong quarantine
system has resulted in a favourable animal and plant health status that we intend to maintain.
Where current international standards such as those endorsed by OIE and IPPC meet Australia’s
needs with regard to protection from pests and diseases, they are included in import protocols.
However, many do not provide an adequate level of quarantine protection and Australia legitimatelyexercises its right under the SPS Agreement to impose stricter controls, justified on scientific grounds
and supported by a transparent risk analysis.
Furthermore, relevant international standards do not always exist. This is particularly notable for plant
biosecurity where there are a comparatively large number of pests and diseases infecting a large
number of host species, but there are only a very small number of standards (none of which coverspecific pests or diseases).
Questions from India
Question:  Australia maintains very stringent  standards for Maximum Residue Levels(MRLs) for
spices in general and chillies in particular. Would Australia give reasons for fixing such stringent
standards? Has it been fixed after appropriate risk assessment?WT/TPR/M/104/Add.1
Page 41
Answer:  In Australia, Food Standards Austra lia New Zealand (FSANZ) is the agency with
responsibility for developing food standards, including Maximum Residue Limits (MRLs) forchemical residues in food.
FSANZ must be satisfied that any changes to the residues and MRLs do not represent an unacceptable
risk to public health and safety before agreeing to  a variation to any MRLs.  All changes to Australian
MRLs only occur following completion of a scientific risk assessment.  Codex standards are taken
into account when Australia establishes national food standards.  FSANZ makes WTO notificationson all proposed MRLs.
FSANZ is currently processing an application specifically to allow the import of specific foods (ie.
herbs and spices) that have been treated with pesticides overseas.  The assessment of this application
will involve a thorough examination of scientific data associated with the chemicals and residue trials
and consideration of the results of exposure assessment studies.
Question:  It is gathered that Australia does not disclose the testing methods used in the laboratory
for fixing SPS standards on the ground that these are intellectual property. Would Australia elaborate
as to how it considers such methods of tests as an intellectual property?
Answer:  Australia discloses information on its testing methods that are part of its import
requirements. The “Australian Diagnostic Techniques for Animal Diseases” details the tests andstandards for each disease. This book is published and the information available on the internet.
Question:  Is there any provision in the Australian law by which the testing procedures and food
standards can be shared with other countries?
Answer:  (For food standards) All of the Australian food standards are contained in the Australia New
Zealand Food Standards Code . This is a public document and freely available on the website of Food
Standards Australia New Zealand: www.foodstanda rds.gov.au.   Explanatory material and User
Guides are also available on that website.
Question:  It is gathered that for Dehydrated Culture Media exported from India, Australian
Government agencies do not accept certificates of Government of India/Government of Maharashtra,
Animal Husbandry Department certifying such pr oducts to be BSE/TSE free and FMD free. Could
Australia elaborate on the reasons for non-acceptance of such certificates?
Answer:  Australia understands that FMD is endemic to India and appreciates that it has not
undertaken a thorough examination of India’s TSE status. Australia appreciates that dehydrated
culture may be used for the production of vaccines, certain therapeutics and other in vivo products
and, as such, represent a potential high quarantine risk.
Questions from the United States
Question:  Please elaborate on how defending a country’s reputation as a high quality exporter (as
discussed in para. 75 of the Secretariat’s report) is a legitimate scientific basis for imposing trade
restrictive SPS measures under the SPS agreement.
Answer:  The SPS Agreement requires governments to base their quarantine measures on
international standards, or on a transparent science-based risk analysis. Australia uses a formal,
science-based process to assess risks associated with proposed imports of animals, plants and theirproducts. Our process is open and transparent and keeps stakeholders, including the trading partnersWT/TPR/M/104/Add.1
Page 42
requesting access, informed of the progress and detail of scientific assessments. Few other countries
have import risk analysis processes as articulated and transparent as Australia’s.
Australia is a major exporter of unprocessed agricultural products.  Of the $30 billion of agricultural
exports, only a small percentage is in highly processed form.  Most has not been subject to any
process that would inactivate pathogens of concern to an importing country.  For this reason,
maintenance of Australia’s highly favourable animal and plant health status is critical to its ability to
trade in world markets.
Australia’s history and comparative geographic isolation as well as traditionally strong quarantine
system has resulted in a favourable animal and plant health status that we intend to maintain through
quarantine measures developed legitimately under the SPS Agreement.
Question:  Para. 33 of the Government’s report states that  "The Import Risk Analysis (IRA) process
is open and transparent . . ."  We would like to note for the record that exporters to Australia havecommented that although the IRA process is now open  and transparent, it is extremely slow, to the
point that there is now a 19-year backlog of IRA requests. Consequently, some of these exporters feel
the process continues to protect Australian agriculture.
Answer:  The length of time taken for individual IRAs depends on a number of factors including the
availability of published or other information necessary to support the analysis.  It also depends on thequality and completeness of information provided by the proponent of the import.  Only some of the
import requests received by Biosecurity Australia will necessitate a formal IRA.  Many other requests
are dealt with by means of simpler reviews of or extensions to existing policies. Also, not all IRAs
flow through to a conclusion.  Proposals are sometimes withdrawn or aggregated (into a generic
analysis) and changing circumstances can affect the commencement and progress of an IRA.
Question:  Has a new administrative framework for IRAs been implemented (as discussed in para. 81
of the Secretariat’s report)?  If so, how long will it take Australia to catch up on its backlog ofrequests for market access?
Answer:  In the light of lessons from recent years, Australia has reviewed its Import Risk Analysis
process to strengthen opportunities for external scientific input and to enhance opportunities for public
consultation.  The basic elements of the IRA process will remain unchanged, but the aim is to make it
more consistent, accountable and transparent. This information is available at www.affa.gov.au.
The IRA process will continue to comply with ou r international obligations. The Government will
finalise the new IRA Framework late in 2002.
Overall, it is hoped that the new framework will help to ease potential delays in the IRA process, by
identifying and handling any stakeholder technical concerns earlier in the process.  The changes are
directed towards greater consultation with stakeholders as well as the scientific community, toincrease the transparency and scientific rigour of the analysis process.  Other countries that develop
their measures through science-based risk analyses take similar time periods to complete their IRAs.
Question:  IRA processes in many countries are often vulnerable to politicization and influence from
protectionist interests.  What measures does the Australian Government have in place to ensure
against undue political influence in the IRA process?
Answer:  The following measures assure the independence of the IRA processWT/TPR/M/104/Add.1
Page 43
- IRA decisions are made by the Director of Quarantine
- Australia’s IRA process and technical guidelines are published and readily available
to all interested parties;
- The are regular reports and updates to stakeholders;
- There is no restriction on who can be a stakeholder;
- All IRA’s are science-based and open to public scrutiny;
- Stakeholders have a right of appeal.
Question:  Does Australia recognize disease/pest free regions within a country?  If so, please provide
examples.
Answer:  Yes.  Australia does recognise disease/pest free regions within a country. Examples of zone
freedom incorporated into import decisions include Bluetongue in the US, Bluetongue in Canada and
foot and mouth disease in South Africa. Examples for plant products include mangoes from theGuimaras Islands, the Philippines (mango and pulp weevil), Ya pears from China (fruit flies and some
other pests), Fuji apples from Japan (brown rot and bacteria shoot blight), fresh table grapes from
California (USA), (medfly, black rot and a number of other pests and diseases) and citrus from
California, Texas and Arizona - freedom from citrus canker (only present in Florida).
Question:  How many biotech products are still waiting to be assessed by ANFZA.  Is there any
commercial productions of approved biotech products?  In general, how long does ANFZA’s
assessment process take?
Answer:  FSANZ (formerly ANZFA) has assessed 23 applications for approval of GM foods to be in
food in Australia and New Zealand. Of these, 19 have been fully approved by the Australia New
Zealand Food Regulation Ministerial Council (ANZ FRMC, formerly the Australia New Zealand Food
Standards Council); one is currently under consideration by the Council; one is undergoing
assessment by FSANZ; and two have been withdrawn.
For foods that require a mandatory pre-market sa fety assessment, the FSANZ process for the safety
assessment of foods is transparent and consultative, and includes two full rounds of public
consultation. The statutory timeframe for assessment is twelve months, with the possibility of a six-
month extension. GM food safety assessments generally take up to twelve months to complete.
In Australia, there are two genetically modified varieties of carnations available commercially to be
grown, and two genetically modified cotton vari eties allowed to be grown under the OGTR's
processes. FSANZ does not regulate the environmental release of GM crops.  This is regulated under
the Gene Technology Act 2000 and is the responsibility of the Office of the Gene Technology
Regulator (OGTR).
Question from Brazil
Could Australia make comments on its position in relation to product tracing (traceability)
requirements for many foods, feedstuffs and food-producing animals the European Union wants to
impose?WT/TPR/M/104/Add.1
Page 44
Answer: Australia has previously raised its concerns about the European Union’s proposed
traceability requirements on products containing GMOs and food and feed products produced from
GMOs in the SPS and TBT Committees.
As the EU’s proposed regulations have been notified to the SPS Committee as a sanitary and
phytosanitary measure, the SPS Agreement requires that the measure be based on an international
standard or a science-based risk assessment, does not result in arbitrary or unjustified discrimination,
and is not more trade restrictive than necessary.
Australia is concerned about the scientific basis for the proposed EU traceability regulations,
including whether it is justified on a scientific risk assessment or an international standard.  Australia
also questions whether, in the absence of an identifiable risk to human health, the proposed
regulations would meet the WTO requirements.
Question from the European Union
Question:  Australia’s Ministry of Health has presented a draft in order to complement BSE
surveillance measures which puts into question the safety of milk and milk products and introduces
additional requirements on imports. These measures s eem not to be in line with the SPS Agreement
(articles 2.2 and 4). In addition, these regulations provide for a difference between suppliers from
Australia and New Zealand on the one hand and the EU on the other. This would be a discriminatorytrade barrier, which again would be inconsistent with the SPS Agreement (article 2.3). Does the
Government intend to revise these draft regulations  in order to make them conform with the SPS
Agreement?
Answer:  In Australia, a new standard was intr oduced into the Food Standards Code on 18 July 2001
requiring that all beef and beef products sold in Australia for human consumption be derived from
animals free from Bovine Spongiform Encephalopath y (BSE). These restrictions do not include milk
and dairy products, gelatine, fats and tallow, collagen from bovine skins and hides, and non-beefflavourings, as current scientific evidence indicates these products present a negligible risk for
transmission of the BSE agent.
Question from the Philippines
Question:  The SPS Agreement encourages Members to rely upon the SPS standards established by
the three international standards setting bodies, CODEX, OIE and IPPC.  However, as noted in the
Secretariat's report, Australia has maintained many quarantine controls and standards that are
stricter than those established by these bodies. Will Australia consider adopting international
standards thereby promoting the objective of  the SPS Agreement to harmonize standards?
Answer: The SPS Agreement requires governments to base their quarantine measures on international
standards, or on a transparent science-based risk analysis. Australia uses a formal, science-basedprocess to assess risks associated with proposed imports of animals, plants and their products. Our
process is open and transparent and keeps stakeholders, including the trading partners requesting
access, informed of the progress and detail of scientific assessments. Few other countries have import
risk analysis processes as articulated and transparent as Australia’s.
Australia is a major exporter of unprocessed agricultural products.  Of the $30 billion of agricultural
exports, only a small percentage is in highly processed form.  Most has not been subject to any
process that would inactivate pathogens of concern to an importing country.  For this reason,WT/TPR/M/104/Add.1
Page 45
maintenance of Australia’s highly favourable animal and plant health status is therefore critical to its
ability to trade in world markets – hence our very conservative approach to quarantine.
In this respect Australia is in a markedly different position to many other countries that are net
importers of agricultural products or which process most of their agricultural exports to the consumer-
ready stage.
Australia’s history and comparative geographic isolation as well as traditionally strong quarantine
system has resulted in a favourable animal and plant health status that we intend to maintain.
Where current international standards such as those endorsed by OIE and IPPC meet Australia’s
needs with regard to protection from pests and diseases, they are included in import protocols.
However, many do not provide an adequate level of quarantine protection and Australia legitimately
exercises its right under the SPS Agreement to impose stricter controls, justified on scientific grounds
and supported by a transparent risk analysis.
Furthermore, relevant international standards do not always exist. This is particularly notable for plant
biosecurity where there are a comparatively large number of pests and diseases infecting a large
number of host species, but there are only a very small number of standards (none of which cover
specific pests or diseases).
Questions from Malaysia
Question:  Market access into the Australian market has been impeded by stringent SPS requirements.
These have been criticised as unduly stringent. Many of the standards imposed have been stricter than
international standards. We appreciate Australia’s views and their response to such criticism.
Answer: The SPS Agreement requires governments to base their quarantine measures on international
standards, or on a transparent science-based risk analysis. Australia uses a formal, science-based
process to assess risks associated with proposed imports of animals, plants and their products. Our
process is open and transparent and keeps stakeholders, including the trading partners requestingaccess, informed of the progress and detail of scientific assessments. Few other countries have import
risk analysis processes as articulated and transparent as Australia’s.
Australia is a major exporter of unprocessed agricultural products.  Of the $30 billion of agricultural
exports, only a small percentage is in highly processed form.  Most has not been subject to any
process that would inactivate pathogens of concern to an importing country.  For this reason,maintenance of Australia’s highly favourable animal and plant health status is therefore critical to its
ability to trade in world markets – hence our very conservative approach to quarantine.
In this respect Australia is in a markedly different position to many other countries that are net
importers of agricultural products or which process most of their agricultural exports to the consumer-
ready stage.
Australia’s history and comparative geographic isolation as well as traditionally strong quarantine
system has resulted in a favourable animal and plant health status that we intend to maintain.
Where current international standards such as those endorsed by OIE and IPPC meet Australia’s
needs with regard to protection from pests and diseases, they are included in import protocols.
However, many do not provide an adequate level of quarantine protection and Australia legitimatelyWT/TPR/M/104/Add.1
Page 46
exercises its right under the SPS Agreement to impose stricter controls, justified on scientific grounds
and supported by a transparent risk analysis.
Furthermore, relevant international standards do not always exist. This is particularly notable for plant
biosecurity where there are a comparatively large number of pests and diseases infecting a large
number of host species, but there are only a very small number of standards (none of which cover
specific pests or diseases).
Question from the Philippines
Question:  In the course of the SPS Committee's deliberations on specific trade concerns, several
Members have questioned some of the SPS measures required by Australia.  In particular, some
developing countries have noted that the stringent measures required by Australia are oftentimes very
costly and render exports to Australia no longer viable.  Article 9.2 of the SPS Agreement states that:
“Where substantial investments are required in order for an exporting developing country to fulfil the
SPS requirements of an importing country, the latter  shall consider providing such assistance as will
permit the developing country Member to maintain and expand its market access opportunities for the
product involved.
Is Australia willing to commit to such technical assistance to enable developing countries to shoulder
the additional costs of complying with Australia’s stringent SPS measures on specific products,thereby ensuring real market access for these countries?
Answer:  Australia gives a high priority to providing technical assistance to regional countries seeking
to improve their capacity in SPS-related matters, and the health status of their animal and plant
industries.
Under Australia’s ASEAN-Australia Development Cooperation Program (AADCP) which will
commence later this year, a number of quarantine-related activities have been agreed following
consultations with ASEAN countries.  These include:
Quality Assurance Systems for ASEAN Fruit and Vegetables.
The goal of this project is to contribute towards building consumer confidence in ASEAN
horticultural produce.  The indicative budget is $A1.55 million.
Quality Assurance and Safety of Fish and Fishery Products, Processing and Packaging
The goal of this project is to facilitate and promote intra- and extra- ASEAN trade in fishery products
through the application of Hazard Analysis and Critical Control Point (HACCP)-based quality
assurance systems.  The indicative budget is $A0.8 million.
Strengthening ASEAN Plant Health Capacity
The goal of this project is to support regional objectives of harmonising plant health regulations
through science-based policies and regulations.  The indicative budget is $A1.05 million.WT/TPR/M/104/Add.1
Page 47
Strengthening Animal Health Management and Quarantine
The goal of this project is to enhance the capability of ASEAN members to comply with
commitments related to the application of sanitary and phytosanitary (SPS) measures for livestock and
animal products.  The indicative budget is $A1.05 million.
Strengthening ASEAN Capability in Risk Assessment in Support of Food Safety Measures
The goal of this project is to strengthen ASEAN capability in risk assessment in support of food safety
measures. The indicative budget is $A0.65 million. ASEAN and Australia are now well into a processof consultations to develop the detailed final designs of these activities.
Australia is also funding a new $3.5 million SPS initiative under the AFTA-CER Closer Economic
Partnership (CEP), the Sanitary and PhytoSanitary Capacity Building Program  (SPSCBP).  The
SPSCBP will build regional cooperation in SPS matters, and strengthen the internal and border
quarantine capacities of the ASEAN countries.  Inter alia, the SPSCBP will build the technical,scientific and managerial capacities of the organi sations (regional and national) within the ASEAN
region with responsibilities for management of SPS matters.
There are two planned stages of implementation.
- Stage 1 is an initial, 9-12 month, phase of working jointly with the participating
governments to identify the scope for enhanced regional cooperation, to confirm
areas of focus, to select specific institu tions for capacity building support, to analyse
their institutional building needs, and to develop detailed programs of work.
- Stage 2 (approx 3 years) will focus on the delivery of specific technical assistance
activities to support enhanced regional SPS-related cooperation, and build key
technical, scientific and organisational capacities.
Question from the Philippines
Question:  We note in the Secretariat's report that since June 1999, Australia has required imported
agricultural commodities to undergo Import Risk Analysis (IRA).  In the same report, however,
Australia has pointed out the limit on resources as constraint to undertaking IRAs.  For those
commodities where Australia has no IRA, what is  Australia's basis for instituting an SPS measure?
Likewise, to what extent does Australia take into account pertinent information that may be available
from international organizations, as well as of SPS measures applied from other Members, whenestablishing measures for which Australia has not undertaken an IRA?
Answer:  The SPS Agreement requires governments to base their quarantine measures on
international standards, or on a transparent science-based risk analysis. Australia uses a formal,
science-based process to assess risks associated with proposed imports of animals, plants and their
products. Our process is open and transparent and keeps stakeholders, including the trading partnersrequesting access, informed of the progress and detail of scientific assessments. Few other countries
have import risk analysis processes as articulated and transparent as Australia’s.
Australia is a major exporter of unprocessed agricultural products.  Of the $30 billion of agricultural
exports, only a small percentage is in highly processed form.  Most has not been subject to any
process that would inactivate pathogens of concern to an importing country.  For this reason,WT/TPR/M/104/Add.1
Page 48
maintenance of Australia’s highly favourable animal and plant health status is therefore critical to its
ability to trade in world markets – hence our very conservative approach to quarantine.
In this respect Australia is in a markedly different position to many other countries that are net
importers of agricultural products or which process most of their agricultural exports to the consumer-
ready stage.
Australia’s history and comparative geographic isolation as well as traditionally strong quarantine
system has resulted in a favourable animal and plant health status that we intend to maintain.
Where current international standards such as those endorsed by OIE and IPPC meet Australia’s
needs with regard to protection from pests and diseases, they are included in import protocols.
However, many do not provide an adequate level of quarantine protection and Australia legitimately
exercises its right under the SPS Agreement to impose stricter controls, justified on scientific grounds
and supported by a transparent risk analysis.
Furthermore, relevant international standards do not always exist. This is particularly notable for plant
biosecurity where there are a comparatively large number of pests and diseases infecting a large
number of host species, but there are only a very small number of standards (none of which cover
specific pests or diseases).
Question from Argentina
Question:  “Paragraph 80 of the Secretariat's Report points out that since June 1999 a quarantine
and inspection process requires that imported agri cultural products be subject to an import risk
analysis to determine the risk that could exist that these goods might introduce pests and illnesses into
Australia and how to face these risks.  An import  risk analysis of imports can take between one and
two years.  A new administrative framework for this type of analysis - according to the report - must
be completed and put into practice in 2002.  What is the status of the new system?  Can Australia
provide some additional elements and characteri stics about the future administrative framework,
besides those contained in paragraph 34 of the Government Report?  Is this new framework expected
to fast-track the risk analyses?"
Answer:  In the light of lessons from recent years, Australia has reviewed its Import Risk Analysis
process to strengthen opportunities for external scientific input and to enhance opportunities for public
consultation.  The basic elements of the IRA process will remain unchanged, but the aim is to make itmore consistent, accountable and transparent. This information is available at www.affa.gov.au.
The IRA process will continue to comply with ou r international obligations. The Government will
finalise the new IRA Framework late in 2002.
Overall, it is hoped that the new framework will help to ease potential delays in the IRA process, by
identifying and handling any stakeholder technical concerns earlier in the process.  The changes aredirected towards greater consultation with stakeholders as well as the scientific community, to
increase the transparency and scientific rigour of the analysis process.  Other countries that develop
their quarantine measures based on science-based risk analyses take similar time periods to complete
their IRAs.WT/TPR/M/104/Add.1
Page 49
Questions from Chile
Question:  Page 52 of the Secretariat's TPR Repor t states that an Import Risk Analysis (IRA) for
imported agricultural commodities "may take from one to two years".  Chilean table grapes have
been undergoing this process for more than seven years.  In this context, we would like to ask the
following questions:
- Could Australia explain the different stages of the IRA and the timelines for the
completion of each one?
- The report says that a new administrati ve framework of IRA's will be finalized and
implemented in 2002.  Could Australia pr ovide further details on what this
framework entails and how it diff ers from the actual system?
- Once the IRA is finished and a product is approved for import is this valid for all of
Australia or are there regional quarantine measures that might affect this import?
Answer:  In the light of lessons from recent years, Australia has reviewed its Import Risk Analysis
process to strengthen opportunities for external scientific input and to enhance opportunities for public
consultation.  The basic elements of the IRA process will remain unchanged, but the aim is to make it
more consistent, accountable and transparent. This information is available at www.affa.gov.au.
The IRA process will continue to comply with ou r international obligations. The Government will
finalise the new IRA Framework late in 2002.
Overall, it is hoped that the new framework will help to ease potential delays in the IRA process, by
identifying and handling any stakeholder technical concerns earlier in the process.  The changes are
directed towards greater consultation with stakeholders as well as the scientific community, to
increase the transparency and scientific rigour of the analysis process.  Other countries that develop
their quarantine measures based on science-based risk analyses take similar time periods to complete
their IRAs.
Australia addresses regional differences in pest status and risk and any consequent variation to SPS
measures as part of its import risk analyses.   If region-specific quarantine measures are required,
these are scientifically-justified and are available on ICON.
Question from China
Question:  We seek Australia’s clarification on the pending Pest Risk Analysis  test of China’s apple
and peach originating from Shandong and Shaanxi provinces and China’s request for lifting of the
ban on Ya pear to be expanded to cover all kinds of pears.
Answer: In November 2001, China advised that its top priority for access was Shandong pear and
Australia has commenced work on this request. In August 2002, China provided data on six Chinese
arthropod pests that Australia is considering as being of potential quarantine significance.
Questions from Chinese Taipei
Question:  Chinese Taipei respects the fact that as a major exporter of agricultural products,
Australia is heavily dependent on agriculture.  It would therefore be desirable to adopt stringent SPS
measures to ensure that agricultural products would not be jeopardized by pests and diseases, and to
secure food safety.  Clarification from Australia on two issues would be appreciated.  First, on theWT/TPR/M/104/Add.1
Page 50
issue of preserved eggs, Chinese Taipei has been requesting access to the Australian market since
2000, but access has been denied on the basis that the import risk analysis (IRA) is not yet complete.Furthermore, it should be noted that for a long time preserved eggs have been freely imported into
both the United States and Japan.  Chinese Taipei is concerned at the length of time being taken to
complete the IRA process.  In the interests of transparency, it is hoped that Australia could provide an
update on the status of the IRA on preserved eggs.  In addition, Australia’s new administrative
framework of IRAs is to be fina lized and implemented in 2002.  Plea se clarify how this administrative
change is likely to affect the IRA process on preserved eggs after 15 May 2002 and indicate when this
process will be finalized.
Answer:  Australia is currently undertaking a generic (ie from all potential sources) import risk
analysis (IRA) of egg and egg products. Alkalized eggs are being considered as part of this IRA and
are not the subject of a separate IRA. Whether this egg product can be imported and whether it shouldbe subject to further quarantine treatment will be determined in the risk analysis process.
The Economic Division, Taipei Economic and Cultural Office (TECO) in Canberra, has been placed
on the stakeholder register for the IRA on non-viable eggs and egg products and will be advised of
any developments in this matter.
The IRA was started in May 1998.  Progress has been slow for a number of reasons including delays
due to external review of technical papers.
A common reason for delays in progressing IRAs is the difficulty in obtaining relevant technical
information. For example, Chinese Taipei has provided some details of the manufacturing process for
alkalized and salted eggs.  However, it has not been possible to accurately assess the efficacy of the
process at inactivating pathogens of concern, in particular very virulent infectious bursal disease virus
(IBDV) since details are lacking such as:
- the precise steaming time and- core temperature for salted eggs;  and
- the changes in internal pH of the alkalised eggs
We would welcome provision of this technical information. The change to a revised IRA Framework
is not expected to adversely impact on the egg and egg product IRA.
Question:  On the second question concerning Konjac, Australia has issued an import ban on food
containing Konjac at customs agencies, resulting in an adverse effect on the normal trade of food.
Konjac has been a traditional food used in Asian countries for more 10 centuries, and it has been
proved as safe as rice and wheat for the human body.  Please could Australia clarify whether such
extensive bans of all food containing Konjac are appropriate SPS measures.  Does an alternative
measure exist that could avoid damage to normal food trade?
Answer:  On 16 November 2001 the Australia New Zealand Food Authority (ANZFA) announced
that mini jelly cup products containing konjac should be recalled from sale in Australia, due to the
choking risk that they posed, especially to children.  On 23 August 2002, the Australian Competition
and Consumer Commission issued an 18 month ba n on mini-cup confectionary containing konjac.
Similar action has been taken by governments overseas (e.g. USA and the EU).Several people, including a child in Australia, have choked to death after jellies containing konjac
became lodged in their throats.WT/TPR/M/104/Add.1
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The issue is not the safety of konjac per se, but its formulation as a jelly cup confectionary of such a
shape and consistency as to pose an undoubted threat, particularly to children. Only jelly cupconfectionery containing konjac was recalled through this action.
Konjac is not currently an approved food additive under the Australia New Zealand Food Standards
Code  (the Code).
Australia has consulted with representatives from both Chinese Taipei and Japan about the ban, and at
these meetings indicated that we would welcome a formal application to have konjac approved as alegal food additive in Australia and New Zealand.
As yet, no application has been received.  In the absence of this application, FSANZ cannot make an
assessment of the safety of konjac as an additive in the food supply.  I reiterate our invitation to
Chinese Taipei to apply to FSANZ to have konjac approved as a legal food additive so that an
assessment can be made and, subject to the results of that assessment, the Code can be appropriatelyamended.
Australia recognises that in prohibiting entry of foods containing konjac and banning specific jelly
cup products from sale some impact upon trade may have occurred.  However, we believe that these
actions are consistent with Australia’s obligations under the Agreement on the application of Sanitary
and Phytosanitary Measures (the SPS Agreement), and the Agreement on Technical Barriers to Trade.These agreements provide for Governments to introduce measures where urgent problems of safety or
health arise or when they have not been provided with the necessary information to undertake a risk
assessment.
Questions from the European Union
Question:  We note that Australia maintains that it “requires a highly conservative (but not a zero-
risk) approach to biosecurity role management ”. Documentation on Australia’s biosecurity
framework illustrates the approach  in terms of a risk estimation matrix and a theoretical iso-risk
curve. Can Australia please quantify the probability it uses for its ALOP, which it describes in generic
terms as “very low risk”.
Answer:  The Appropriate Level of Protection (ALOP) is a cornerstone of quarantine policy.  It
represents the level of risk that a country is prepared to accept at a particular point in time, and is the
benchmark against which quarantine risk management decisions are made.
Australia’s ALOP is expressed as taking a “very conservative approach to quarantine policy” aimed at
reducing risk to a very low level but not to zero.  Australia’s ALOP is not quantified.  Nor is any other
country’s and no other country provides a more detailed definition of its ALOP. The iso-risk curve
provides a pictorial representation of risk as a product of likelihood and consequence.
Question:  We also note the statement “An IRA process may take from one to two years”. There is a
perception that the Australian process takes longer than this. Accordingly, can Australia please
specify how many IRAs since 1995 have been comp leted within one to two years and how many have
taken over two years? Also, for the outstanding I RAs how many have been in process for under two
years, how many have been in process for over tw o years and under three years, how many for over
three years and under four years and how many for four years or more?WT/TPR/M/104/Add.1
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Answer:  The length of time taken for individual IRAs depends on a number of factors including the
availability of published or other information necessary to support the analysis.  It also depends on thequality and completeness of information provided by the proponent of the import.
Only some of the import requests received by Biosecurity Australia will necessitate a formal IRA.
Many other requests are dealt with by means of simpler reviews of or extensions to existing policies.
Also, not all IRAs flow through to a conclusion.  Proposals may be withdrawn or aggregated (into a
generic analysis) and changing circumstances can affect the commencement and progress of an IRA.
Question:  Further, for each IRA process where the time taken exceeds two years could reasons be
given for the delay, and for outstanding IRAs, what steps are being taken to speed up the process?
Answer:  The length of time taken for individual IRAs depends on a number of factors including the
availability of published or other information necessary to support the analysis.  It also depends on the
quality and completeness of information provided by the proponent of the import.
Only some of the import requests received by Biosecurity Australia will necessitate a formal IRA.
Many other requests are dealt with by means of simpler reviews of or extensions to existing policies.
Also, not all IRAs flow through to a conclusion.  Proposals may be withdrawn or aggregated (into a
generic analysis) and changing circumstances can affect the commencement and progress of an IRA.
Question:  We also note the statement “It is also recognised that Australia cannot reject or
indefinitely defer consideration of access requests fr om its trading partners.” Could Australia specify
how many outstanding requests there are for access,  how many of these have been outstanding for
under one year, how many for over one year and under two years, how many for over two years and
under three years, over three years and under four years, over four years and under five years, and
over five years?
Answer:  In line with its transparency obligations, Australia maintains a listing of information,
including year of receipt, about outstanding requests to access its markets at www.affa.gov.au.  Again,
this is an element of transparency undertaken by few other WTO members.
Question:  Given the answers to the above, how long does Australia consider it to be a reasonable
time period before it commences consideration of requests?
Answer:  The length of time taken for individual IRAs depends on a number of factors including the
availability of published or other information necessary to support the scientific analysis.  It alsodepends on the quality and completeness of information provided by the proponent of the import.
Only some of the import requests received by Biosecurity Australia will necessitate a formal IRA.
Many other requests are dealt with by means of simpler reviews of or extensions to existing policies.
Also, not all IRAs flow through to a conclusion.  Proposals may be withdrawn or aggregated (into a
generic analysis) and changing circumstances can affect the commencement and progress of an IRA.
Questions from Hungary
Question:  Please list the countries from according to Australian sanitary and phytosanitary
regulations the imports of fresh, chilled or frozen  meat of beef, pig, sheep and poultry are admitted?
Answer: Australia, like many other countries, has quarantine measures in place applying to a wide
range of live animals, plants and their products.WT/TPR/M/104/Add.1
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To list all the products to which these measures apply would not be practical in the context of this
review. However, in keeping with Australia’s open and transparent approach to quarantine, details onall of Australia’s import requirements can be found in AQIS’ “ICON” database at www.affa.gov.au.
Please list the countries from according to Aust ralian SPS regulations the imports of smoked,dried,
canned or otherwise prepared processed products of beef, pig, sheep and poultry are admitted?
Answer: Australia, like many other countries, has quarantine measures in place applying to a wide
range of live animals, plants and their products.
To list all the products to which these measures apply would not be practical in the context of this
review. However, in keeping with Australia’s open and transparent approach to quarantine, details on
all of Australia’s import requirements can be found in AQIS’ “ICON” database at www.affa.gov.au.
Question from Norway
Question:  Norway has for five years tried to get the necessary permissions to start export of "pork
seed/sperm" to Australia without succeeding. Australian authorities argue that a world-wide risk
analysis for all pork products is underway and that we will have to wait for the results of this
analysis. In practice this argumentation works as an effective barrier to trade. Norway is as a matter
of fact declared as a risk free area. We would therefore be pleased if Australia could explain why
Norwegian export of pork sperm is not allowed.
Answer: Australia appreciates that Norway is currently seeking access to its market for pig semen. A
generic IRA is being undertaken on pig semen from all destinations to address this and other requests.
Australia notes that Norway did not provide formal comments on the draft IRA report on pig semen,
despite being invited to do so.
The Norwegian Government has been advised that the next step in the IRA will be the consideration
of the stakeholder comments and the incorporation of these comments where relevant.
Following this the Final IRA Report will be the released.Questions from the Philippines
Question:  The Secretariat's report notes that Members have criticized Australia's SPS measures as
unduly stringent and protectionist.  In addition, we woul d also note that some of these measures, as in
the case of requiring methyl bromide as fumigan t, are also harmful to the environment.  Does
Australia take into account the environmental effect of its quarantine control prescription?
Answer: Methyl bromide is widely used as a quaran tine fumigant in many countries around the world,
including the Philippines.
Along with other countries, Australia is keen to identify potential alternative treatments of equivalent
efficacy, however at the present time, there are many situations both in Australia and in other
countries for which methyl bromide remains the most appropriate quarantine fumigant.
There is a specific exemption to the Montreal Protocol for the use of methyl bromide for quarantine
purposes.WT/TPR/M/104/Add.1
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Question:  Footnote 84, page 52 of the Secretariat's report refers to a partial equilibrium empirical
analysis conducted on Australia's SPS related ban on the imports of bananas.  The study suggests thatthe consumer benefit from moving to free trade on banana would far outweigh the losses to
producers. The study further concludes that there is a need for a comprehensive economic review of
Australia's myriad SPS policy measures.
Following concerns raised by the Philippines on Australia's long-standing ban on the imports of
bananas, in 2000, Australia finally committed to undert ake an IRA for this product.  Said IRA would
be conducted within two years, or by June 2002. We understand that there have been delays in
completing the said IRA.  Could Australia inform us of the status of this IRA, including the final date
of its completion. Moreover, in the conduct of the IRA, has Australia taken into account the economic
benefits to Australian consumers of opening its banana market?
Answer: The SPS Agreement limits consideration of economic considerations of economic factors to:
the potential damage in terms of loss of production or sales in the event of the entry, establishment or
spread of a pest or disease; the costs of control or eradication in the territory of the importing
Member; and the relative cost-effectiveness of alternate approaches to limiting risks.
Australia appreciates that the Philippines Govern ment has provided comments on a Draft IRA Report
on the importation of fresh banana fruit from the Philippines, the comment period for which closed on30 August 2002.
The Philippines Government has been advised that th e next step in the IRA will be the consideration
of the stakeholder comments.  There is no nominated length of time for this step as it depends on the
extent and complexity of stakeholder comment. Following this will be the release of the Final IRA
Report.
The Philippines Government has been kept informed of progress at all stages of the banana IRA.
Questions from Switzerland
Question:  Which agricultural products were mainly concerned (products, tonnage) by the strict
quarantine and inspection provisions which may make market access to the Aust market more costly
and risky (page 87, para. 13 and 17)?
Answer: Australia, like many other countries, has quarantine measures in place applying to a wide
range of live animals, plants and their products.
To list all the products to which these measures apply would not be practical in the context of this
review. However, in keeping with Australia’s open and transparent approach to quarantine, details on
all of Australia’s import requirements can be found in AQIS’ “ICON” database at www.affa.gov.au.
Similarly, to provide tonnages for the products subject to quarantine conditions is also not practical.
Australia challenges the comment about the "risky" nature of the Australian market. Australia has
clearly articulated quarantine conditions, and trade can take place provided these conditions are met.
The conditions are publicly available.
Other WTO members apply the same concepts, i.e. they allow trade provided their national quarantine
requirements are satisfied.WT/TPR/M/104/Add.1
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Question:  "Australia is carrying out "import risk analysis" concerning dairy products.  In what way
are these analysis carried out for the importation of  cheeses made from raw milk?  What are the
results of the analysis in this field?"
Answer: The import risk analysis that is referred  to in this question was completed in 1999. The
requirements allow the importation of raw milk cheeses with respect to animal quarantine issues but
do not address the public health and safety requirements regulated by Food Standards Australia New
Zealand (FSANZ) in the Food Standards Code.
The Food Standards Code  requires milk for cheesemaking to be either pasteurised or, as an
alternative, be subjected to a minimum heat treatment of 15 seconds at 62 ˚C (thermisation) in
conjunction with a requirement for 90 days storage of the cheese at not less than 2 ˚C. This
requirement applies to both domestically produced and imported cheese.
The Food Standards Code  allows the importation of raw milk cheeses if it is demonstrated that they
can be consistently produced to an equivalent level of safety as cheese made from pasteurised milk.
Safety can be demonstrated by undertaking a risk assessment or other scientific evaluation as
appropriate. This was undertaken in relation to a number of Swiss raw milk cheeses in 1998, and these
are now allowed into Australia.  Currently, FSANZ has raised and is assessing a proposal to evaluate
the safety of very hard grating cheeses produced using raw milk.
Question:  On 17 July, the Therapeutic Goods Administration (TGA) published a draft on
“Supplementary Requirements for Therapeutic Goods for Minimising the Risk of Transmitting
Transmissable Spongiform Encephalopaties (TSE)”. The proposed provisions lay down rules for
ingredients of human and animal origin, which are used in the preparation of active medicinal
substances. Switzerland is of the opinion that the measures proposed by Australia seem to provide
little additional benefit to the patient’s safety, but significant additional cost and efforts for
manufacturers. Furthermore, the access to essential medicinal products could be endangered inAustralia if the proposed requirements enter into force.
The Australian proposal is in contrast to global harmonisation efforts and can therefore be
considered as a technical barrier to trade. Switzerl and would welcome if Australia would consider the
above mentioned requirements.
Answer:  The proposed measures are primarily intended to capture information on the potential for
TSE risk mitigation associated with materials processing and addressing the potential for cross-
contamination with high risk materials.  It is impor tant that these measures be documented so that, in
the event the TSE risk profile of the materials changes, both the industry and TGA will be able to
respond quickly and appropriately to avoid serious disruption to the supply of essential therapeutic
goods. The TGA will give careful consid eration to the comments from Switzerland.
Following the outbreak of BSE, Australia has applied stringent import restrictions on beef and beef
products that are much stricter than relevant stan dards promulgated by international bodies (eg OIE
International Animal Health Code). Are there plans to review these trade restricting measures and the
Australian risk assessment taking into account the present state of scientific knowledge?
Answer:  Variant Creutzfeldt-Jakob disease (vCJD) is a fatal disease caused by the transmission of the
bovine spongiform encephalopathy  (BSE) agent to humans via consumption of beef and beef
products contaminated with the infectious agent.WT/TPR/M/104/Add.1
Page 56
Australia’s measures are designed to manage the risk of human exposure to the BSE agent through
consumption of beef and beef products. The measures are not animal health measures such as coveredin the OIE Code, but for the protection of human health.
The measures are appropriate measures to minimise the likelihood of the Australian population being
exposed to a fatal, food-borne illness and to maintain consumer confidence in the safety of imported
beef and beef products.
Australia will continue to review its measures in light of new scientific information in accordance
with its WTO rights and obligations.
Questions from Thailand
Question:  We would like to stress that the stringe nt measures imposed by Australia on the two Thai
products have given rise to conditions which are commercially unviable. Although Thailand fully
understands Australia’s concerns over the safety of indigenous habitats, the importance of theprinciples of free trade and fair trade laid down by the WTO should not be ignored. In this regard, we
would like to seek Australia’s views on the possibility of accepting alternative testing methods and
procedures endorsed by internationally recognised scientific institutions, so as to show Australia’s
sincerity in these two long-standing issues and wo uld appreciate prompt attention and responses from
the Australian delegation.
Imports of chicken meat into Australia are required to undergo the cooking temperature of 74 degrees
Celsius for 165 minutes or 80 degrees Celsius so as to get rid of the Infectious Bursal Disease Virus.
Answer:  Conditions for the importation into Aust ralia of cooked chicken meat from Thailand,
Denmark and the USA took effect in August 1998. The final conditions were based on laboratory test
results on the time/temperature cooking parameters for inactivation of virulent infectious bursal
disease virus. Australia is currently reviewing further information provided by the Thai authorities on
this matter.
Australia is currently conducting a generic IRA on uncooked chicken meat from all destinations,
including Thailand. The Thai authorities did not comment on an issues paper, released on
18 July 2001 for 60 days public comment that provided technical information on pests and diseases.
Question:  Australia’s import inspection procedure requires the cutting of durians in an excessive
sampling size, i.e. 450 out of 1,000 or 600 out of more than 1,000 in order to ensure that they are freeof seed borers.
Answer: Australia completed an IRA on fresh Durian from Thailand in 2000 but Thai agreement to an
Arrangement document to underpin the trade remains outstanding. The measures in the IRA are based
on sound science to mitigate pest and disease risks and the fruit sampling regime is in accordance with
relevant international standards.
Australia has a long history of providing assistance to regional countries, including Thailand, to
improve the health status of their animal and plant industries. Australia has indicated it would be
willing to work with Thailand to jointly explore th e scope for using rapid-scan X-ray imaging or other
non-destructive sampling of tropical fruits, including durian and mangoes, including via the visit in
June 2002 when technical assistance was given to the Thai authorities to investigate the use of non-destructive detection methods using x-ray imaging for the detection of durian seed borer. AustraliaWT/TPR/M/104/Add.1
Page 57
would also be willing to explore the scope for greater use of “area freedom” from specific pests and
diseases when considering market access requests.
Question from China
Question:  The labelling requirement to indicate the Latin name in addition to the English one for
mushroom and fish imports from Chi na seems to be unnecessarily burdensome.
Answer:  The Australia New Zealand Food Standards Code does not require the compulsory naming
of fish in Latin.  It is mentioned in a (non-mandato ry) editorial note to the Code.  Codex, at the behest
of the European Union, is in favour of the labellin g of fish in Latin due to the difficulty in accurately
identifying the same fish with different names or different fish with the same names, depending on
which country or region the fish is labelled in.  The Latin name is the only universal system of
identification of fish.
(3) Measures Directly Affecting Exports
(i) Registration and documentation
Question from Chinese Taipei
Question:  Referring to paragraph 87, about 97% of exports are lodged directly into the EXIT system
on a self-assessment basis.  Please explain why th ere is a difference between imports and exports in
the percentages of electronic data interchange.
Answer:  Customs Export Integration (EXIT) syst em was designed after the import system and
provided an EDI interface from the outset.  Take up of electronic access via EXIT has been extensive
throughout the exporting community.  However, the decision to opt for electronic processing is one
for individual exporters, or importers, to make based on the benefits to their business.  Consequently,
there is no direct relationship between the take-up figures for the two systems. With regards to
exporters, the time critical nature of export cargo especially cargo exported via air demands speedy
clearance through Customs formalities, therefore electronic initiatives provide that efficiency.
(ii) Export prohibitions, restrictions, and licensing
Question from Brazil:
Question:  Export controls or quantitative restrictions operated by public sector entities affect certain
primary and therapeutic goods to ensure, inter alia, adequate domestic supply, and to enforce
standards.  How does Australia plan to prevent these controls and restrictions from being trade-distorting or from relying on mechanisms that distort trade?
Answer:  In regard to primary products, the Secretariat has outlined in paragraphs 90 and 91 the
rationale for export controls.  In essence Australia maintains export controls as a trade facilitation
measure, and not as a trade restriction.  Because of Australia's reliance on agri-food exports, export
controls have been maintained to ensure its reputation as a reliable supplier of high-quality food.Under existing legislation (Export Control Act, and other), export controls on certain agricultural and
food products (meat, dairy, grains, horticultural products, fish, sugar, wine) are operated by certain
public sector entities with a view to, inter alia,  ensuring importing country requirements are met (e.g.
volume limitations, trade and product descriptions), and to maintain food safety and quality standards.WT/TPR/M/104/Add.1
Page 58
Export controls on wood and woodchips are for the purpose of protecting environmental and heritage
values.
(iii) State Trading
Question from Republic of Korea
Question:  The Australian Wheat Board Ltd still maintains monopolistic exports rights. By means of
monopolistic status, it manipulates export price and quantity, causing serious trade distortion and
increasing the burden of importing countries including Korea.
It is necessary to ensure that the AWB Ltd operates with transparency and fairness by making public
the information on produced quantity and price of wheat. What is the view of Australia on this?
Answer: AWB Ltd does not command an unfair market advantage in the international wheat market
and does not engage in unfair trading practices.  The Australian domestic wheat market is completely
deregulated, so there is no scope for AWB Ltd to charge higher prices on the domestic market in orderto subsidise exports
Australia is a price taker on the international wheat market, accounting for only around 10-15 per cent
of international wheat exports and its marketing operations do not have a decisive influence over the
general level of world prices, compared with large exporters such as the US, EU and Canada
AWB Ltd must compete with domestic users for grain on the Australian domestic market to acquire
wheat for export and competes for sales to foreign markets with multiple international suppliers, many
who operate behind market distorting production and exporting systems.
AWB Ltd makes commercial decisions regarding the timing of export sales and is required to
maximise returns to growers. It does not hold large stocks and attempts to minimize storage costs by
shipping at the earliest possible opportunity.
neither does AWB Ltd receive any direct assistance or domestic subsidies of any kind from the
Government
AWB Ltd is no less transparent than its private sector competitors; private traders do not disclose
commercially confidential information such as contract and price information.
Question from Switzerland
Question: Are the single desk state trading enterprises really compatible with the competition laws in
Australia? See page 88 paragraph 18 and page 93 para 30.
Answer:  Australian STE’s are compatible wi th National Competition Policy (NCP).  In 1995,
Australia’s nine governments agreed to implement the NCP reform program.  The resulting
Competition Principles Agreement (CPA) builds on a process that was launched with the Trade
Practices Act 1974  (TPA).  The TPA established rules to limit the abuse of market power by
businesses, promote fair trading and efficient industry practices and to protect consumers.
Over the period of the NCP’s operation governments have reviewed the legislative arrangements
underpinning all STEs and have announced or implemented their responses to a number of these
reviews. Further, all single desk arrangements in Australia are subject to continuing periodic review
under the CPA to ensure that the arrangements deliver net public benefit to Australia.WT/TPR/M/104/Add.1
Page 59
Question from the United States
Question:  While single-desk State Trading Enterprises such as the Australian Wheat Board have
been modified to allow greater private sector participation, government influence in other sectors
(dairy, lamb, wool) remains strong.  Is the Government of Australia considering additional de-
regulatory steps (beyond those discussed in para. 93 of the Secretariat’s report) to eliminate the
monopoly export control of state trading enterprises?
Answer:  It is misleading to suggest that Australian  government influence in the dairy, lamb and wool
sectors remain strong.  No government controls or constraints exist in the marketing and production of
wool and lamb both domestically and for export.  In regard to dairy no government controls or
constraints exist in dairy production.  Government involvement in export management in the dairy
industry is currently being wound back.  It was always very limited in both products and markets
covered. Trade in Australian dairy products for all intents and purposes is operated on a commercialbasis.
The Government is not considering additional measures to remove single desk selling for wheat.  It
should be noted that the Australian domestic wheat market was deregulated in 1989, and the statutory
marketing authority, the Australian Wheat Board, no longer exists and was replaced by AWB Ltd
under Corporations Law on 1 July 1999.  This means that AWB Ltd is as transparent in itscommercial operations as other privately owned grain trading companies.
(iv) Export assistance
Question from the European Union
Question:  We note local content requirements in the context of export assistance. Could you please
provide details and how this can be reconciled with Australia`s WTO obligations in particular with
Art 3,1b of the WTO Subsidies Agreement?
Answer:  The EMDG scheme is a widely available program which is not specific within the meaning
of the WTO Agreement on Subsidies and Countervailing Measures (SCM).  While intended to
develop an export culture within Australia, foreign-sourced goods, components, labour costs etc are
not excluded from the scheme.  Benefits are therefore not contingent on the use of domestic over
imported goods.
(c) Free trade export zones and similar schemes
Question from Japan
Question:  Please explain the details of incentive packages offered in the Darwin Trade Development
Zone scheme as a free-trade zone (FTZ).  Do the incentive schemes operated in this Zone contain
exported-oriented measures? If yes, please explain how these schemes can be justified in relation to
Article 3 of the SCM Agreement.
Answer:  The Darwin Trade Development Zone Sche me is not a Free Trade Zone (FTZ) as known in
countries throughout the world.  It is a scheme designed to attract investment into regional Australia,
more particularly the Northern Territory. It is administered by a NT legislation, the Trade
Development Zone Act 1999  (NT) and Trade Development Zone Regulations 1987 (NT).  No Free
Trade Zone or Foreign Trade Zone Legislation exists in Australia.WT/TPR/M/104/Add.1
Page 60
The incentive schemes offered in the Trade Development Zone (TDZ) are in two categories:
1) those businesses that qualify to hold a licence to operate in the Trade Zone; and2) those available to all investment that is attracted to the NT.
Under the first category, eligibility is based on the continued satisfaction of the licence criteria
(including financial resources, industrial experience or technical skills necessary to carry on a
business).  Eligibility for a license is not contingent on exporting or export performance.
The second category of incentives available to TDZ operators involve one-off discretionary
inducements to either relocate into the TDZ or to expand their business operations.  The criteria for
these types of incentives is not based on export activity and businesses that wish to relocate to the NT
or expand their existing operations into new endeavours, are able to apply for such incentives.
Question from Chinese Taipei
Question:  Referring to paragraph 103, no further information was available from the authorities on
the set of incentives and the employment/productio n/trade benefits from operating the Darwin Trade
Development Zone.  Could Australia please provide an example showing the characteristics of the
incentive packages and their justification under the WTO SCM Agreement.
Answer:  Please see Australia’s response to the Government of Japan.
Since the introduction of the Darwin Trade Deve lopment Zone in 1985, industry in the Northern
Territory has been dynamic and its needs and prioritisations have changed significantly.  The financial
incentives available have shown little evidence of providing any significant benefit to licensees.
In August 2001 a new Government was elected into the Northern Territory, Australia. It has called for
a review of all its Economic Development Strategies including the Darwin Trade Development Zone.
The review will consider the impact of the incen tives offered to licensees of the Darwin Trade
Development Zone, investment attraction strategies and trade enhancement schemes on a sectorial
basis.
Discretionary incentives granted to businesses under the second category (see response to
Government of Japan para 103) have taken the form of interest rate subsidies and payroll tax, stamp
duty and land tax exemptions.
Questions from the United States
Question:  Please provide all notification information as required under Article 25 of the Agreement
on Subsidies and Countervailing Measures for each of the “individually tailored” incentive packages
provided under the Darwin Trade Developmen t Zone (FTZ), including subsidies for up-front
property, plant, and equipment costs, and relocation assistance; as these did not appear to be
included in your notification on December 4, 2001.
Answer:  In terms of Australia’s notification of investment incentives, please see page 18 of
G/SCM/N/71/AUS of  4 December 2001.
Question:  Please state whether receipt of these incentives is contingent upon exportation.
Answer:  None of these incentives are contingent upon exportation.WT/TPR/M/104/Add.1
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Question:  Please provide more information a bout your manufacture-in-bond (MIB); specifically,
whether or not it confers any prohibited subsidies to Australian companies.
Answer:  The manufacture-in-bond (MiB) scheme was designed to allow firms to use Australia as a
base for hub operations servicing the Asia Pacific region without incurring duty liability on imported
goods re-exported or used as inputs to exports.
Exemption from duties and GST is provided for goods which are imported into an MiB warehouse
and subsequently exported either in their original form or as components of a new product. Importsbrought into the warehouse and subsequently entered for home consumption incur a duty and GST
liability at the time they leave the warehouse.
The premises in which the firm intends to undertake MiB must be licensed by the Australian Customs
Service as a bonded warehouse under Section 79 of the Customs Act 1901 .
The MiB scheme exempts an exported product from duties or taxes borne by the like product when
destined for domestic consumption, providing the remission of such duties or taxes in amounts is not
in excess of those which have accrued.  The scheme does not confer prohibited subsidies on
Australian companies.
Question:  As the operation of the zone is under review, please provide further information on the set
of incentives and the employment/production/trade benefits from operating the zone.
Answer:  Since the introduction of the Darwin Trade Development Zone in 1985, industry in the
Northern Territory has been dynamic and its needs and prioritisations have changed significantly.
The financial incentives available have shown little evidence of providing any significant benefit to
licensees.
Question:  If no further information is available from the authorities, please explain why this
information is not available.
Answer:  Information has been provided.
(e) WTO notification
Questions from the United States
Question:  Please state why each of the programs listed in this paragraph are non-notifiable under
Article 25.  What distinguishes these programs from the two that Australia has notified (e.g.
Automotive Competitiveness and Investment Scheme, and Textiles, Clothing and Footwear StrategicInvestment Programme)?
Answer:  The Textile Clothing and Footwear Impor t Credits Scheme expired on 30 June 2000.  The
Passenger Motor Vehicle (PMV) Export Facilitation Scheme terminated on 31 December 2000.  The
Export Market Development Grants (EMDG) scheme is not a specific subsidy within the meaning of
the WTO Agreement on Subsidies and Countervailing Measures and is therefore not notifiable.WT/TPR/M/104/Add.1
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(4) Measures Affecting Production and Trade
(ii) Production assistance
Questions from the European Union
Questions:  We note that since 1998 part of Australia‘s support programmes and certain sub-
Commonwealth programmes have been notified to the WTO Committee on Subsidies and
Countervailing Measures. Please indicate if there are any other notifiable programmes in force?
Answer:  Australia has in fact notified its support programmes for both federal and sub-federal
jurisdictions covering financial years 1995/1996 and onwards.  Australia’s subsidy notification
contained in document G/SCM/N/38/AUS, G/SC M/N/48/AUS, G/SCM/N/60/AUS circulated
11 May 2000 contained a new and full notification relating to sub-federal programmes backdated
from financial year 1995/1996 and onwards.
Document G/SCM/N/71/AUS contains Australia’s late st notification reporting on programs to the end
of financial year 2000/2001, i.e. 30 June 2001, and reflects a comprehensive listing of assistance
programs by federal and sub-federal jurisdictions.
Questions from the United States
Question:  The paragraph states these programs “were to benefit rural exporters and tourism
operators”.  Please provide additional information about these programs, and please either notify theschemes discussed in this paragraph, or explain why “the authorities consider these subsidies to be
non-notifiable”.
Answer:  These schemes are widely-available a nd non-specific within the meaning of the WTO
Agreement on Subsidies and Countervailing Measures (SCM).  They are therefore not notifiable
under the SCM.
(iii) Competition and consumer policy
Questions from Brazil
Question:  In document WT/TPR/S/104, pages 74 and 75, Australia presents its Competition Policy
legislation. It states that Competition (and consumer  protection) legislation is contained in the Trade
Practices Act 1974 (TPA) and is intended to promote and preserve fair and free competition in the
domestic market.  Each State and Territory also ha s legislation that mirrors the provisions of the
Commonwealth legislation. Are these laws based on "rule of reason" or "per se" standards?
Answer:  To the extent that State and Territory legislation apply the provisions of the schedule version
of Part IV of the Trade Practices Act 1974 , those Acts mirror the standards contained in the
Commonwealth Act.  The competition provisions of the Act contain both “rule of reason” and “per
se” standards. For example, mergers are subject to a substantial lessening of competition test, whereas
resale price maintenance is subject to a per se prohibition.
Question:  The TPA contains provisions on anti-com petitive agreements; misuse of substantial market
power; exclusive dealing; resale price maintenance; access to essential infrastructure; and anti-
competitive acquisitions. What about public policies? What is the Australian reference and position
regarding industrial policies and its relationship with Competition Policies and Laws?WT/TPR/M/104/Add.1
Page 63
Answer:  The TPA’s anti-competitive conduct provisions apply generally to all sectors of the
economy, including Government business activities.  However, for industries where special rules arejustified (eg telecommunications), the TPA contains industry-specific provisions.  Exemptions from
the competition provisions of the TPA have also b een made where it is considered that competition
would produce an undesirable outcome or where it is considered that other legislation should regulate
a particular activity.  One example of such an activity is collective bargaining between employers and
employees, which enjoys an exemption from the TPA because industrial relations are alreadyregulated by the Workplace Relations Act 1996 .
Question from Chinese Taipei
Question:  As indicated in the  Secretariat report (WT/TPRS/104), a legislative review programme to
release unnecessary restrictions and improve competition was scheduled to be finalized by June 2002.
Chinese Taipei would appreciate knowing the details of the results as well as learning how thisreview could be translated into government reform s, particularly with regard to the amendments of
the Trade Practices Act.
Answer:
Legislation Review
In 1995, all Australian Governments entered into three agreements establishing National Competition
Policy (NCP).1  Under the Competition Principles Agreement  (CPA) Governments agreed to
undertake a program for the review and, where appropriate, reform of legislation (including Acts,
enactments, ordinances or regulations) that restricts competition.
The principle guiding these reviews is that legislation should not restrict competition unless it can be
demonstrated that:
- the benefits of the restriction to the community as a whole outweigh the costs; and
- the objectives of the legislation can only be achieved by restricting competition.
New legislation that restricts competition must  also be shown to meet these principles.
The CPA provides guidance on the issues that a review should consider.  Without limiting the scope
of the review, a review should:
- clarify the objectives of the legislation;
- identify the nature of the restriction on competition;- analyse the likely effect of the restriction on competition and on the economy
generally;
- assess and balance the costs and benefits of the restrictions; and
- consider alternative means for achieving the same result including non-legislative
approaches.
                                                     
1 The three agreements that underpin NCP are: the Competition Principles Agreement , the Conduct
Code Agreement  and the Agreement to Implement the National Competition Policy and Related Reforms .WT/TPR/M/104/Add.1
Page 64
In 1996 all Australian Governments published a schedule for reviewing its restrictive legislation.
Approximately 1800 pieces of legislation have been identified for review over seven years.
The review and reform processes represent an extremely comprehensive reform effort over a
relatively short period and has proved to be more challenging than envisaged at the beginning of this
process.  Consequently, no Australian Government has completed its review and reform program by
the 30 June 2002 deadline.  However, substantial progress has been achieved and much of the work
still underway is expected to be completed over the next twelve months or so.
Main regulatory reform projects arising from the reviews
The scope of legislation being subject to this review process is broad.  Governments have reviewed
and reformed regulation of many significant activities, of which a number have been characterised by
endemic restrictions.  These activities include: agricultural marketing arrangements, fishing and
forestry; transport services including taxi licensing; professions and occupations; compulsoryinsurance arrangements; retail matters such as reta il trading hours and liquor licensing; the education
sector; gambling activities; communications sector including telecommunications and post; and
planning, construction and development services.
The National Competition Council (NCC) — an independent agency — assesses annually
Governments’ progress against agreed NCP reform s, which includes review of legislation that
restricts competition.  Assessments are avai lable on the NCC’s website (www.ncc.gov.au).
The NCC also produces a Legislation Review Compendium that reports progress with the legislation
being reviewed by Australian Governments.  This publication is also available on the website
(http://www.ncc.gov.au/publication.asp?publicationID=111&activityID=36).
The CPA obliges all Governments to produce annual reports outlining their progress against theirNCP obligations.  The aim of these reports is to provide full public reporting on NCP activity by
Governments.  The Commonwealth National Competition Policy Annual Report is available on theCommonwealth Treasury website (www.treasury.gov.au).
Trade Practices Act Review
On 15 October 2001, the Prime Minister announced that there would be an independent review of the
competition provisions of Australia’s competition law – the Trade Practices Act 1974  (TPA) and their
administration.
In setting the terms of reference for the review the Government stated that it was timely to review
some key provisions of the TPA in view of the significant structural and regulatory changes that are
occurring in Australia that impact on the comp etitiveness of Australian businesses, economic
development and affect consumer interests.
In establishing the review, the Government made reference to:
- Australian businesses being increasingly faced with global competition and the need
to be able to compete locally and internationally;
- the fact that excessive market concentration and power can be used by businesses to
damage competitors; andWT/TPR/M/104/Add.1
Page 65
- the need for businesses to have reasonable certainty about the requirements for
compliance with, or authorisation under, the TPA.
The Review Committee has been specifically instru cted to examine the operation of the competition,
authorisation and associated penalty provisions of the TPA to determine whether they:
- inappropriately impede the ability of Australian industry to compete locally and
internationally;
- provide an appropriate balance of power between competing businesses, and in
particular businesses competing with or dealing with businesses that have larger
market concentration or power;
- promote competitive trading which benefits consumers in terms of services and price;
- provide adequate protection for the commercial affairs and reputation of individuals
and corporations;
- allow businesses to readily exercise their rights and obligations under the TPA,
consistent with certainty, transparency and accountability, and use compliance or
authorisation processes applicable to their circumstances; and
- are flexible and responsive to the transitional needs of industries undergoing, or
communities affected by, structural and/or regulatory change and to the requirements
of rural and regional areas.
The Committee is to report to the Government by end of November 2002.  Further information about
the review, including copies of all public submissions, can be found on the review website at:
http://tpareview.treasury.gov.au.  The Government will consider its response after receipt of the
inquiry report.
(iv) Intellectual property rights
International treaties
Question from Argentina
Question:  In paragraph 133 [paragraph 134 of the English text] of the Secretariat Report it is stated
that Australia participates in 12 out of 19 treaties administered by the World Intellectual Property
Organization (WIPO).  Nevertheless, Australia has yet to take action for acceding to and
implementing treaties such as the WIPO Perfor mances and Phonograms Treaties and the Patent Law
Treaty.  Does Australia plan to accede to the WIPO Performances and Phonograms Treaties or the
Patent Law Treaty?  What are the reasons for the delay in taking such a decision?
Answer:  The new rights for producers of sound recordings in the WIPO Performances and
Phonograms Treaty (WPPT) were implemented in the Copyright Amendment (Digital Agenda) Act
2000.  While the Australian Government commenced consulting on the additional rights forperformers in the WPPT in December 1997, it subsequently deferred further action pending the
holding of the WIPO Diplomatic Conference in December 2000 on the protection of audiovisual
performances.  Following the inconclusive outcome of that Conference, the Government has
committed itself to developing legislation for rights for performers which will enable Australia to
accede to WPPT, and substantial progress has been made towards preparing a proposal for legislation.WT/TPR/M/104/Add.1
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Australian patent legislation is now in compliance with the Patent Law Treaty. However, we are yet to
undertake the formal consultation process necessary before the Government can take action onpossible accession.
Question from Japan
Question:  Japan would like to welcome Australia's  implementation of the main obligations of the
WIPO Copyright Treaty (WCT). Please explain the future prospects of Australia's accession to WCT.
Answer:  The Copyright Amendment (Digital Ag enda) Act 2000 introduced protection of copyright
works on on-line that was intentionally in conform ity with the obligations of the WCT, including
sanctions against circumvention of technological copyright protection and against tampering with
rights management information.  Before Australi a can consider formally acceding to the WCT, the
Copyright Act has to be further amended to extend the existing term of protection for photographs
under the Act.  The government is committed to introducing legislation to make that amendment, andconsultations have been undertaken with stakeholders.
Question:  Please also explain the measures which are necessary for acceding the WIPO
Performances and Phonograms Treaty (WPPT), whic h was adopted simultaneously with the WCT, as
well as the future prospects of its accession by Australia
Answer:  Before Australia can consider acceding to the WPPT, the Copyright Act will have to be
amended to introduce the Rome-plus and TRIPs-plus rights for performers that are required by the
WPPT.  The government is committed to introducing legislation to make those amendments, and has
undertaken consultations with stakeholders.
Question from Brazil
Question:  In document IP/C/W/233, Australia pointed out the existence of an increasing number of
transactions involving intellectual property rights not necessarily captured by goods or services
commitments (e.g. license fees, royalties).  How do these transactions affect the task of classification?What is Australia's position on the treatment of such intellectual property transactions?
Answer:  When intellectual property is involved in an electronic transaction, TRIPS will apply to that
intellectual property.  To the extent that services or goods are involved, GATS or GATT would also
apply.  Assessment of which agreements apply should be made on a case-by-case basis.  Most
electronic transactions involve services, and will consequently be subject to GATS.  Australia willcontinue to participate actively in the Work Program on Electronic Commerce, which, inter alia, is
seeking to determine an appropriate response to the issues raised in the question.
Enforcement and parallel imports
Question from Chinese Taipei
Question:  Referring to paragraph 139, please explain the legal implications of lifting the restrictions
on parallel imports.  Is it in compliance with the TRIPS Agreement?  In allowing parallel imports,
how is Australia able to effectively protect the rights of the intellectual property rights holders in this
area.
Answer:  Australia's parallel importation policy is to ensure that consumers have access to world
competitive prices for legitimate goods and are not subject to differential pricing based on the abilityWT/TPR/M/104/Add.1
Page 67
to control access to our market.  Australian legislation permitting parallel imports reflects a sound
policy balance where the Australian Government is acting in the best interests of the Australianpeople and the Australian economy.
The legislation is TRIPS-consistent.  The TRIPS Agreement is designed to reduce distortions and
impediments to international trade and to ensure that measures to enforce intellectual property rights
do no themselves become barriers to legitimate trade.  Parallel importation is not prohibited by the
TRIPS Agreement.  Article 6 provides that "nothing  in this Agreement shall be used to address the
issue of the exhaustion of intellectual property rights."  In addition, the Objective of the TRIPS
Agreement (Article 7) is to protect and enforce IP  rights "to the mutual advantage of producers and
users of technological knowledge and in a manner conducive to social and economic welfare, and to a
balance of rights and obligations."
There is no evidence that allowing parallel importation into Australia has increased the likelihood of
trade in pirated goods.  Australia is amongst those countries with the lowest rates of copyright piracy.
To maintain this situation, appropriate safeguards are provided in Australian copyright legislation.  As
part of the parallel importation reforms in respect of sound recordings, legislation was amended so
that in a civil action for infringement of copyright arising from the commercial importation of sound
recording, the defendant has the legal burden of proving that an imported copy is a non-infringingcopy.
Questions from the United States
Question:  Video cassettes copied from Vide o CDs (VCDs) and DVDs, parallel imported Zone 1
DVDs (i.e. DVDs that are programmed for play back and distribution in North America only) and
pirated VCDs continue to be the major threat to Australia’s otherwise low rate of piracy.  Counterfeit
DVDs imported from Asia are also an emerging pr oblem.  The U.S. motion picture industry estimates
annual losses due to audiovisual piracy in Australia to be US$21 million in 2001.  However, itappears that Australia’s Central and State Governments assign a relatively low priority to IPR
enforcement.   The Australian Copyright Act, its in terpretation by Australian courts in some instances,
and the position of the Australian Federal Police not to pursue criminal prosecution where civil
remedies are available, have created costly and burdensome obstacles to enforcement.  Civil remedies
have not proven effective against piracy.  We note that Zone 1 DVDs are released in Australia threeto six months prior to the local video release, and frequently coincide with the Australian theatrical
release.  It is also estimated that 20 percent of DVDs in Australia are parallel imports, adversely
affecting the theatrical and video markets in Australia.
Answer:  The claim 'that 20 percent of DVDs in Australia are parallel imports, adversely affecting the
theatrical and video markets in Australia' is incorrect.   While it is possible to parallel importlegitimate copies of sound recordings (CDs), films  (including DVDs) are not open to parallel
importation in Australia.  The amendments contained in the Copyright Amendment (Parallel
Importation) Bill 2002 reflect the policy of allowing parallel importation of printed material and
software.  The amendments provide for situations where short film clips are included in a computer
program or music CD as an accessory.  This is necessary to prevent the copyright in a film accessorybeing used to prevent parallel importation of the com puter program or CD (for example, software in a
computer game that generates moving pictures may also be 'film' in this context).  The amendments
do not allow parallel importation of feature films, which are defined as a film produced for television
broadcast and/or distribution in cinemas of greater than 20 minutes duration, or with short films on
their own.WT/TPR/M/104/Add.1
Page 68
The assertion that  the "position of the Australian Federal Police not to pursue criminal prosecution
where civil remedies are available, have created costly and burdensome obstacles to enforcement" is
incorrect .  In fact, the Australian Federal Police has recently carried out a number of successful
investigations including one which ended in the conviction and deportation of persons involved in
importing quantities of infringing CDs into Australia.  In another recent case the AFP took part in a
successful international operation coordinated by US authorities against a major software piracy
group.  (For further information on the AFP see www.afp.gov.au).
Question:  What is the time line for Australia Acceding to and implementing the WIPO Performances
and Phonograms Treaty?
Answer:  Before Australia can consider acceding to the WIPO Performances and Phonograms Treaty
(WPPT), the Copyright Act 1968 (Cth) will have to be amended to introduce the rights for performers
required by the WPPT that are not already in th e Act.  The Government is committed to introducing
legislation to make those amendments, and has undertaken consultations with stakeholders.
While the Australian Government commenced consulting on the additional rights for performers in
the WPPT in December 1997, it subsequently deferred further action pending the holding of the
WIPO Diplomatic Conference in December 2000 on the protection of audiovisual performances.
Following the inconclusive outcome of that Conference, the Government has committed itself todeveloping legislation for rights for performers which will enable Australia to consider accession to
the WPPT and subject to priorities of the Government, passage of legislation and treaty accession
processes may occur concurrently.
Question:  Please describe the mechanisms adopted to ensure efficiency and transparency in
copyright management.  Were any changed made to the Copyright Act of 1968 in order to establish
these mechanisms?
Answer:  We would be grateful for clarification of this question, particularly the reference to
"mechanisms to ensure efficiency and transparency in copyright management".
Question:  What is the schedule for debate on th e Copyright Amendment (Par allel Importation) Bill
2002?  If possible, please provide a copy of that legislation.
Answer:  The Copyright Amendment (Parallel Impor tation) Bill 2002 is on the Government business
list for the House of Representatives for its current sitting period.   The text of the Bill may be foundon the website of the Parliament of Australia in the folder "Current Bills by Title" (see
www.aph.gov.au).
Question:  What is the current effect of the July 2000 Cabinet decision to remove the restriction on
parallel imports for printed material and computer software?
Answer:  The Copyright Amendment (Parallel Importation) Bill 2002 will amend the Copyright Act
1968 to enable the legal parallel importation and subsequent commercial distribution of computer
software products, including interactive computer games, books, periodical publications (such as
journals and magazines) and sheet music.
A similar Bill was introduced in the previous Parl iament and lapsed with the calling of the federal
election in October 2001. In its election policy for the arts (Arts for All)  the Coalition promised that it
would re-introduce legislation to remove outdate d parallel importation restrictions on computerWT/TPR/M/104/Add.1
Page 69
software, books and periodicals, ensuring that Austra lians no longer have to pay higher prices in an
unnecessarily limited market.
Details of the effect of the Bill are set out in the explanatory Memorandum
http://search.aph.gov.au/search/ParlInfo.ASP?ac tion=view&item=0&from=browse&path=Legislation
/Current+Bills+by+Title/Copyright+Amendment+(Parallel+Importation)+Bill+2002/Explanatory+me
moranda&items=1
Question:  Has Australia studied the connection between allowing parallel importation and copyright
piracy?  Please describe the process under which the Australian government decided to stop banning
parallel imports and provide any related materials.
Answer:  There have been extensive studies undert aken in Australia on this issue including the 1995
Industry Commission Report, Comput er Hardware, Software and Related Services Industries, the
1998 Copyright Law Review Committee Report as well as research undertaken by the PricesSurveillance Authority, and the Australian Consumer and Competition Commission.  (These reports
are usefully summarised in the Explanatory Memorandum to the draft Copyright Amendment
(Parallel Importation) Bill 2002 currently before Parliament: see website of the Parliament of
Australia in the folder "Current Bills by Title"  (see www.aph.au).  The report of the Intellectual
Property and Competition Review Committee, ‘Review of intellectual property legislation under the
Competition Principles Agreement’ , which was produced in 2000, contained a report on parallel
importing and CD piracy.  It stated that “since mid-1998, there is little evidence of the increase in CD
piracy predicted by opponents of liberalisation” (see www.ipcr.gov.au).  This view was also expressed
by the Federal Court in the matter Australian Consumer and Competition Commission v Universal
Music Australia Pty Ltd  [2001] FCA 1800 (see http://www.austlii.edu.au/au/cases/
cth/federal_ct/2001/1800.html).
There is no evidence that allowing parallel importation into Australia has increased the likelihood of
trade in pirated goods.  Australia is amongst those countries with the lowest rates of copyright piracy.
To maintain this situation, appropriate safeguards are provided in Australian copyright legislation.  As
part of the parallel importation reforms in respect of sound recordings, legislation was amended so
that in a civil action for infringement of copyright arising from the commercial importation of sound
recording, the defendant has the legal burden of proving that an imported copy is a non-infringingcopy. Software piracy rates have also decreased since the introduction of parallel importation of
copyright goods in New Zealand according  to industry statistics (see www.bsa.org).
Question:  The Australian Patents Act 1990, Section 50(1)(a) permits the Commissioner to refuse a
patent application or to grant a patent for an “invention the use of which would be contrary to law.”
Please explain how this provision of the patent law is in compliance with TRIPs Article 27.2 that
states that Members shall not exclude inventions from patentability merely because the exploitation of
the invention is prohibited by law.
The Australian Patents Act 1990, Section 50(1)(b) permits the Commissioner to exclude from
patentability “a substance that is capable of being used as a food or medicine (whether for human
beings or animals and whether for internal or external use) and is a mere mixture of knowningredients” or processes of preparing such a substance “by mere admixture.”
Please explain how this provision of the patent law is in compliance with TRIPs Article 27.1 that
requires that “patents shall be available for any inventions, whether products or processes, in allWT/TPR/M/104/Add.1
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fields of technology provided they are new, involve an inventive step and are capable of industrial
application.”
Answer:  Paragraph 50(1)(a) of the Patents Act is interpreted to be limited to inventions where the
only use described for it would be punishable as a crime.  That is, the application of
paragraph 50(1)(a) will result in the refusal of a patent if its ONLY use is contrary to criminal law.
Thus guns are patentable since they can be used for both lawful and unlawful purposes.  Consequently
exclusions beyond the scope of Article 27(2) of TRIPs cannot arise.
Paragraph 50(1)(b) of the Patents Act is the codification of a specific instance of the more general law
of inventive step.  A “mere mixture of known ingredients” is a mixture exhibiting only the aggregate
of the known properties of the ingredients.  Not on ly must the ingredients be known, but the property
which makes the ingredients useful for the pu rpose of the invention must also be known.
Question:  We note in your submission that you provide 5 years of data protection for Agricultural
and Veterinary chemicals; could you please describe your data protection regime for
pharmaceuticals?
Answer:  The data protection regime for pharmaceuticals
Confidential information about active com ponents submitted to the Therapeutics Goods
Administration (the “TGA”) in connection with applica tions to register new products in the Australian
Register of Therapeutic Goods (“the Register”) is accorded a “five year data protection” under
section 25A of the Therapeutic Goods Act 1989 (the TG Act). “New” products are active components,
in therapeutic goods, that have never been included in the Register.  The five year data protection
applies to “new” therapeutic goods registered on or after 17 April 1998 and commences on the day the
“new” goods is included in the Register. Information submitted in relation to the “new” therapeutic
goods is described as “protected information”
When evaluating therapeutic goods for registration, the TGA cannot use information about therapeutic
goods that is protected information.  During the five year data protection, any other company seeking
to register a generic copy of the registered product containing, or consisting of the active component
will not be able to rely on protected information in the possession of the TGA to facilitate inclusion of
the generic product in the Register.  The company will either have to obtain the permission of the
sponsor of the original product to access the protected information to facilitate inclusion of the genericproduct in the Register, or alternatively lodge full documentation required for a full evaluation of the
generic product to take place.
An active component for the purposes of data protection under section 25A of the TG Act is a
substance or one of the substances that together are, primarily responsible for the biological or other
effect identifying the goods as therapeutic goods.
Applicant’s seeking to register generic products containing “new” active components which have five
year data protection may still do so.  However, they must develop and lodge their own full data
package, instead of lodging an abbreviated package that demonstrates bioequivalence with a new
active component.
Information is accorded protection under section 25A of the TG Act:
- if the information was given in relation to an application to register therapeutic goods:
containing, or consisting of active components;WT/TPR/M/104/Add.1
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- the information is not available to the public;
- when the application to register the new therapeutic goods, no other therapeutic goods
consisting of, or containing the active component were included in the Register; and
- no such therapeutic goods had been included in the Register at any time before then.
The five year data protection does not apply to therapeutic or medical devices.
Please find below the relevant section of the TG Act.
25A  When the Secretary must not use protected information
(1) When evaluating therapeutic goods for registration, the Secretary must not use information
about other therapeutic goods that is protected information.
(2) Information is protected information  if:
(a) the information was given to the Secretary in relation to an application to register
therapeutic goods (the new goods ):
(i) not being therapeutic devices;  and(ii) consisting of, or containing, an active component;  and
(b) the information is about the active component and is not available to the public; and
(c) when the application to register the new goods was lodged:
(i) no other therapeutic goods consisting of, or containing, that active 
component were included in the Register;  and
(ii) no such therapeutic goods had been included in the Register at any 
time before then;  and
(d) the new goods became registered on or after the commencement of this subsection;
and
(e) 5 years have not passed since the day the new goods became registered; and
(f) the person in relation to whom the new goods are registered has not given the
Secretary permission in writing for the Secretary to use the information.
(3) For the purposes of subsection (2), an active component , in relation to therapeutic goods, is a
substance that is, or one of the substances that together are, primarily responsible for the
biological or other effect identifying the goods as therapeutic goods.
(4) The use of protected information contrary to subsection (1) does not render the
Commonwealth, the Secretary or a delegate of the Secretary liable to a person in respect of
loss, damage or injury of any kind suffered by the person as a result of, or arising out of, theuse of that information.WT/TPR/M/104/Add.1
Page 72
Question from Japan
Question:  What kind of right holders would be gr anted the right of operation? Please describe the
reason for the Australian Cabinet decision in 2000 to  relax the restrictions on parallel imports for
printed material and computer software. Was there any opposition for relaxing the restrictions?
Answer:  Australia's parallel importation policy is to ensure that consumers have access to world
competitive prices for legitimate goods and are not subject to differential pricing based on the ability
to control access to our market.  Australian legislation permitting parallel imports reflects a soundpolicy balance where the Australian Government is acting in the best interests of the Australian
people and the Australian economy.
Some sections of the relevant industries opposed the removal of parallel import restrictions on printed
material and books when the relevant amendments were introduced into Parliament in 2001.  The
present Government made an election promise before the November 2001 federal election to re-introduce the amendments if it were returned to office.  The position of the non-government parties
will be apparent when the legislation is considered by each House of Parliament
(a) Industrial property
Question from Chinese Taipei
Question:  Australia promulgated its Innovation Patent Act on 24 May 2001 to provide protection for
these inventions by requiring a lower inventive threshold than is required for a standard patent and to
repeal the petty patent system.  Could Australia  please provide information as to the number of
applications from SMEs and the percentage of all patents that are innovation patents.  Meanwhile,
has any innovation patentee successfully lodged a claim for damages?  Please clarify whether the
Innovation Patent Act complies with Section V, Part II of the TRIPs Agreement.
Answer:  IP Australia has received 1203 filed in novation patent applications between  24 May 2001
and 30 June 2002.  Our records indicate that approximately 85% are lodged by an individual or SME.There were 1002 granted innovation patents between 24 May 2001 and 30 June 2002 which is
approximately 6% of all the patents granted in Australia.
There are currently two Innovation patents that are before the courts. One involves infringement and
revocation proceedings. The other has infringement proceedings before the Court, with an opposition
before the Commissioner. We would not expect a final decision of the court in either matter beforenext year.
Australia's obligations under Part II of Section 5 of the TRIPS Agreement are met by the standard
patent system.
The innovation patent system is an alternative form of protection for inventions that may not meet the
requirements of the standard patent system.  In this respect it is TRIPS plus.
The innovation patent system is not intended to meet Australia's obligations under the TRIPS
Agreement.  It replaced the petty patent system, which had been in place since 1979, and is analogous
to the utility model systems that are offered in many countries.  It offers protection to lower level and
incremental inventions, therefore it has a lower inventive threshold and a shorter term of 8 years.WT/TPR/M/104/Add.1
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Copyright and related rights
Questions from Japan
Question:  Please provide detailed information on  the amendment to the Copyright legislation for
greater copyright protection to works on-line.
Answer:  Many of the amendments introduced by the Copyright Amendment (Digital Agenda)
Act 2001 increased the protection of copyright works online. The most important of these were:
The creation of a new right of communication to the public  - Copyright owners now have the
exclusive right to control how their work is electronically transmitted to the public or made available
online. This right is designed to be technology neutral and covers a broad range of uses of copyright
material, from broadcasting and cable-diffusion to e-mail, Intranets and web publishing. Previously,
copyright owners were dependant upon the reproduction right to enforce their rights over the Internet.
This meant that they could take action against the person accessing the material (eg the personopening the website) but not necessarily the person who had actually made the material available (eg
the person who created the website).
The introduction of a ban on hacking tools  - It is now illegal to make or deal commercially in
devices or services that have only a limited commercial purpose other than the circumvention of
technological protection measures used to protect copyright material online, such as access codes,encryption and software locks. A limited set of 'permitted purpose' exemptions applies to this ban.
Individuals may obtain circumvention devices in order to access computer programs for security
testing, error correction or to make interoperable products. Educational and cultural institutions may
obtain circumvention devices in order to gain access to 'locked' material that they are entitled to copy
under existing exceptions.
The protection of electronic rights management information  - Criminal penalties now apply to
tampering with copyright information attached to electronic documents, eg information giving the
details of the copyright owner, or setting out terms of  use. It is also an offence to deal in works that
have had this information tampered with.
The introduction of higher penalties where copyright infringement occurs in the digital
environment  - Higher criminal penalties and additional civil damages may now be applied where an
infringement occur in the digital environment, or involves the first digitisation of analogue material.
Further information on the Copyright Amendment (Digital Agenda) Act  2000 is available at the
following internet links:
http://www.ag.gov.au/publications/copyfactsheet/c opyfactsheet.html and http://www.dcita.gov.au/
Article/0,,0_1-2_12-3_460-4_13287,00.html
Question:  Does the Australian government survey piracy of copyright Australian copyrighted
materials abroad?
Answer:  No.
Question:  Please explain the details of “recommend ations mentioned in the para. 151, page 81 of the
Report.  Do they address the strengthening of copyright enforcement on the Internet?WT/TPR/M/104/Add.1
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Answer:  The recommendations referred to in para 151 (i.e. recommendations to amend legislation so
as to make it easier for copyright holders to defend their rights in civil actio ns and to increase the
criminal penalties for commercial infringement) were made by the House of Representative Standing
Committee on Legal and Constitutional Affairs, following its enquiry into the enforcement of
copyright in Australia.  The Government’s response to the report is pending.  A list of the
Committee’s recommendations can be found in the Committee’s report, which is available at:
http:// www.aph.gov.au/house/comm ittee/laca/copyrightenforcement/contents.htm.
Question:  Please explain the judicial remedies for copyright violation in Australia.  Are there any
systems of statutory compensation or penal compensation?
Answer:  Remedies
(i) Civil actions
Copyright owners have a number of civil remedies available where their copyright is infringed:
- Damages.  A person whose copyright is infringed is entitled to damages as
compensation for infringement.  In the case of a blatant infringement, or where some
particular benefit has accrued to the defendant, additional (punitive) damages may be
awarded to a copyright owner.  In determ ining the amount of damages for copyright
infringement, a court may consider whether the infringement involved convertinghardcopy material into digital form.
- Account of Profits.  Alternatively, the court may order payment to the owner of
copyright of the profit made by the infringer as a result of the infringement.
- Conversion damages.  Where the infringement was deliberate, the Copyright Act also
provides for the owner of the copyright in  a work or other subject-matter to be in
substantially the same position as if he or she owned the infringing copies of the
material.  Subject to the discretion of the court, there is a provision for a copyrightowner to have any infringing copies of th e material in the hands of the infringer
(including any device used in making the copies) delivered up to him or her.
- Provisional remedies.  A court may grant relief for infringement in the form of an
interlocutory injunction to restrain an infringement of copyright occurring or
continuing..  Injunctions may be granted ex parte if the circumstances require suchaction.  In addition, a copyright owner may seek an ex parte order for the inspection
and seizure of evidence (Anton Piller Orders).
- Border controls.  A notice in writing may be given to Customs objecting to the
importation of copies of copyright materials suspected to be infringing copies. A
copyright owner giving such a notice is required to lodge security for enforcementcosts.  Once a notice is accepted, Customs may seize the copies to which the notice
applies and hold them for a specified period to enable the objector to commence a
civil action for infringement of copyright.  Importers of copies that are non-infringing
can counterclaim for damages arising from the infringement proceedings.WT/TPR/M/104/Add.1
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(ii) Criminal offences
Under the Copyright Act, the following are criminal offences:
- making an article for sale or hire, selling or offering for hire such an article,
commercially importing or distributing the article for the purpose of trade or to any
other extent that affects prejudicially the copyright owner, if the person knows or
ought to have known the article to be an infringing copy;
- being in possession of one of those articles for one of those purposes, if the person
knows or ought to have known the article to be an infringing copy;
- being in possession of equipment known to be used for making infringing copies;
- causing public performances of a work, film or sound recording at a public venue
knowing the performance to be infringing;
- advertising the supply of copies of computer programs that are known to be
infringing.
The Copyright Act also contains a number of criminal offence provisions that support enforcement
regimes for circumvention devices or services; abuse of rights management information and broadcast
decoding devices.
There are very high penalties.  Under the Copyright Act, criminal penalties range from a maximum of
5 years imprisonment or fines of up to $A93,500 for individuals or $A467,500 for corporations.
Statutory compensation
Australian legislation does not provide a scheme of statutory damages for copyright infringement.
Question:  Please provide us with the “Parliamen tary report on copyright enforcement” mentioned in
the para 153, page 81 of the Report.
Answer:  The Parliamentary report is available at the following Internet link:
http:// www.aph.gov.au/house/comm ittee/laca/copyrightenforcement/contents.htm
Question:  Please explain the system of coll aboration among related government authorities for
fighting against piracy.
Answer:  The system of collaboration is via a c onsultative group on IP enforcement chaired by the
Australian Federal Police.  There is a wide representation of government agencies including those
from the national office of government prosecutors, the Australian Customs Service, variousAustralian State police services and, as appropriate, national criminal intelligence and organised crime
investigation bodies.  Key IP industries that suffer from criminal activity such as music, film, business
software, computer entertainment, toys, subscription broadcast industries and trade mark
representatives covering a range of industries, are represented.  Such representatives are persons or
bodies tasked by the industries with investigation of, or legal action against, infringements.Membership is generally required to be on behalf of a recognisable industry or segment of an
industry.WT/TPR/M/104/Add.1
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The group meets approximately every 4 months.  It has been developing a crime management strategy
for IP enforcement and provides a forum for consider ation of practical issues in improved activity and
intelligence gathering to defeat IP crime.  Th is may include review of recent operations and
investigations.
Question:  Is public lending right covered in the Australian Copyright legislation? If yes, please
explain the provision.  Please also explain how th e exhaustion of the distribution right is covered in
the copyright legislation."
Answer:  Public lending right is not covered under the Australian Copyright Act .  The Public Lending
Right Act 1985 provides the legislative framework for the Public Lending Right (PLR) scheme .
Under the scheme payments are made to eligible Australian creators and publishers.  In 2001-02 PLR
payments totalling $5.937 million were made to 8,193 creators and 308 publishers.
Exhaustion of the right under the Copyright Act to control distribution varies according to the
category of copyright subject-matter.  The right is expressed as a right of action in relation to
prejudicial distribution of infringing copies, which for some copyright subject-matter includes
legitimate, i.e., non-pirate copies imported into Australia.  The effect is that for that subject matter
there is exhaustion of the right over distribution of copies of that subject matter after first authorised
transfer in Australia (national exhaustion).  However, legitimate copies of sound recordings (andcopyright material that constitutes packaging and labelling) imported into Australia are not treated as
infringing copies, so that for sound recordings ther e is effectively international exhaustion of the right
over distribution.  That is also the case with printed material (including books) first published
overseas and not simultaneously published in Australia.  Legislation is before the Parliament that
would have the effect of making books and also co mputer software and software products subject to
full international exhaustion of the right over distribution of copies in Australia.
Question:  Please explain the fair compensation system of reproduction for private use. (Is the system
applied to multi-purpose machines such as perso nal computers? Does the system cover not only
digital media but also analog media?)
Answer:  The Copyright Act does not have provisi on for a statutory licence for the private copying of
copyright materials in return for fair compensation, other than live broadcasts.  That is, private
copying of materials other than broadcasts is subjec t to the exclusive right of the owners of copyright.
The Act provides for a free licence for the copying of broadcasts for private purposes;   the licence
does not apply to the copyright in any underlying works or sound recordings in broadcasts so the
licence would be of practical use to record only certain live broadcasts such as those of sport.
Trade secrets
Question from Argentina
Question:  In paragraph 145 [paragraph 146 of the English text], the Secretariat Report states that
undisclosed information and trade secrets are protected by common law.  Under the National
Registration Scheme for Agricultural and Veterinary Chemicals, test data protection for agricultural
and veterinary chemicals is provided through the Agricultural and Veterinary Chemicals
Administration Act 1994 and its Regulations.  A review of the current data registration protectionsystem is underway to establish a level of protecti on that provides incentives to undertake innovative
research and development with regard to agricultural – veterinary chemicals and maintains
competition (and reasonable prices) in the chemicals market.  What will be the main features of the
new system?WT/TPR/M/104/Add.1
Page 77
Answer:  The objective of the proposed data protection scheme is to ensure an appropriate balance
between:
- protecting the commercial interests of registrants, approval holders and other data
owners, who have invested in data in support of the approval, registration and
continuance of registration of agvet chemicals; and
- the level of competition in the market, so as to:
- create incentives for investment in agvet chemical research and innovation;- encourage investment in the generation of data required for approval and
registration purposes;
- increase the on-label availability of agvet chemicals to Australian primary
producers and other users for pest and disease management purposes
including in chemicals that may currently be available to their overseas
competitors but not in Australia;
- increase the availability of more effective and safer agvet chemicals, with the
added benefit to the economic and environmental sustainability of Australian
agriculture;
- maintain the current relative affordability of chemicals; and
- not adversely impact on the viability of farming which in turn can have
indirect impacts:
- on rural communities through loss of primary industries; and
- through the re-introduction of former environmentally-harmful farming
practices such as regular soil tilling for weed control.
- This will be achieved through:
- establishing a scheme of specific circumstances and periods of time when the
National Registration Authority for Agricultural and Veterinary Chemicals (NRA) is
permitted to reference 'protected' data in making its determinations for the purposes
of:
- granting approvals for use of active constituents in Australia;
- registration of chemical products;
- registration of new formulations and product uses; and
- affirmation of approvals and registrations.WT/TPR/M/104/Add.1
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(v) Other measures (environmental)
Questions from Brazil
Question:  Environmental concerns have been addressed by the introduction/enforcement of new
legislation (e.g. Environment Protection and Biodiv ersity Conservation Act), national environment-
protection measures and a product stewardship (oil r ecycling) scheme. Please explain which are the
main points of the new legislation that could affect  trade. What has been done in order to avoid trade
distortion caused by environmental legislation?
Answer:  The Commonwealth Environment Protection and Biodiversity Conservation Act 1999
(EPBC Act), came into force on 16 July 2000.  The following are the list of relevant Acts and its
regulations:
- Environment Protection and Biodiversity Conservation Act 1999
- Environment Protection and Biodiversity Conservation Regulations 1999- Environment Reform (Consequential Provisions) Act 1999
Under the assessment and approval provisions of the EPBC Act, actions that are likely to have a
significant impact on a matter of national environmental significance
 are subject to a rigorous
assessment and approval process. An action includes a project, development, undertaking, activity, or
series of activities.
The Act currently identifies six matters of national environmental significance:
- World Heritage properties;
- Ramsar wetlands of international significance;
- listed threatened species and ecological communities;
- listed migratory species;
- Commonwealth marine areas;  and
- nuclear actions (including uranium mining).
Actions that are likely to have a significant im pact on the environment of Commonwealth land (even
if taken outside Commonwealth land) may require approval under the EPBC Act.  Australia has
implemented measures to conform to MEAS such as CITES, the Montreal Protocol and the Basel
Convention; for example exports of protected wildlife, some heritage items and other internationally
controlled goods (e.g. hazardous waste, ozone depleting substances) are prohibited or subject toexport permit.  Amendments to the Commonwealth’s Environment Protection and Biodiversity
Conservation Act 1999 have streamlined many of the processes for the export of native wildlife and
CITES-listed species and their products, thus further ensuring these measures are least trade
restrictive so industry groups and individuals can conduct reasonable and legitimate trading activities.WT/TPR/M/104/Add.1
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IV. TRADE POLICIES BY SECTOR
(1) OVERVIEW
Questions from the United States
Question:  Please discuss the following programs in  further detail, noting any subsidy elements that
are specific:
a. Petroleum Products Freight Subsidy Scheme
b. Diesel Fuel Rebate Scheme
c. Diesel and Alternative Fuels Grant Scheme
Answer:  The Petroleum Products Freight Subsidy Scheme is a national subsidy scheme providing
assistance to offset the cost of freighting eligible petroleum products to remote Australian areas.  The
Scheme acts to benefit purchasers in those places by reducing the freight component of the purchase
price of fuel.
The Scheme covers automotive distillate, motor sp irit, aviation gasoline and aviation turbine fuel.
The Scheme applies only to deliveries to certain sites or locations.  The places currently eligible for
inclusion are retail sites, airports, safe anchorages, remote places or large volume users (for example,
mine sites).
The Scheme is funded by Commonwealth grants to Australian States and the Northern Territory.  Oil
companies and independent fuel distributors are required, upon application for registration, to sign an
undertaking to pass on the benefit of the subsidy to purchasers at the time of sale.
(iii) Selected agricultural and livestock items
Question from the European Union
Question:  Reference is made of the support for the sugar sector. We are aware that on
10 September 2002 the outline of a new $A150mn sugar industry assistance package was announced,
to be largely funded by a levy on domestic sugar sales, including imports. Can the details of thispackage be provided, including the measures being introduced and their funding sources?
Answer:  The 10 September announcement of a support package for sugar stated that the details of the
package were yet to be finalised.  Australia will provide appropriate notification to WTO members
once details of the package have been settled.
Question from Mauritius
Question:  On page 93 of the Secretariat’s report, it is mentioned that sugar has enjoyed domestic
support, owing to the industry’s importance in sust aining many rural and regional economies, as well
as its position as a leading export commodity for Australia.  We would appreciate hearing about the
philosophy behind this initiative.
Answer:  Domestic support to the Australian su gar industry has been provided in response to a
specific set of circumstances and meets Australia’s agricultural policy objectives.  Agricultural
support in Australia is now largely decoupled from agricultural production after having undertakenWT/TPR/M/104/Add.1
Page 80
significant adjustment in domestic agricultural policies over the past 30 years.  Australia’s agricultural
policies are targeted at building business and risk management skills, encouraging innovation,developing leaders who can assist industry to self determine their future, placing farmers, processors
and other players in the supply chain in strategic alignment and working in partnership with regional
and local communities to address natural resource management and wider rural issues.  In essence our
approach is to try to ensure that government inte rvention in the market place is strategic and works
with, and not against, market signals.
The Sugar Industry Assistance Package (Canegrowers) provided short term assistance in response to
an unusual combination of circumstances.  These include serious effects of a combination of adverse
climatic and pest conditions and the impacts of low world prices caused in part by high support and
protection policies in other countries.
(a) CropsQuestions from the United States
Questions:  Paragraph 28 of the Secretariat’s report mentions that Australia provided $A 83 million
in assistance to the sugar industry in 2000 as part of a "temporary" Assistance Package.  Some of the
benefits from the package extend through 2002.  In addition the Queensland Government allocated
$A 10 million in concessional loans for replanting and establishment of sugar cane crops.  How doesAustralia plan to notify this additional support to the sugar industry?
Answer:  Queensland Government subsidies on concessional loans for planting and sugar cane will be
notified to the WTO for the financial year in which the funds have been expended.
(b) Livestock
Question:  Paragraph 31 of the Secretariat’s report mentions that Australia provided an assistance
package on lamb in response to the imposition of a tariff rate quota from the U.S.  The GOA provided
19 grants, ranging between $A 70,000 and $A 700,000.  How does Australia plan to notify thatsupport?
Answer:  Australia notified the lamb package as de minimis  support in the Aggregate Measure of
Support in 1999-2000 (G/AG/N/AUS/36).
Question:  In para 35, page 95, it is said that it seems that no element of the federal program for the
adjustment of the dairy sector is linked to exports of dairy products.  At the other hand, the exportedproducts seem to be exempted from the levy under the title of this program (page 94, para 34).  How
could this apparent contradiction be explained?
Answer:  There is no contradiction in the opera tion of the Dairy Industry Adjustment Program
(DIAP), the 3 elements of which are the Dairy St ructural Adjustment Program (DSAP), Diary Exit
Program (DEP) and the Dairy Regional Assistance Program (RAP).
It is correct that no element of the program is linked to exports of dairy products:
- DSAP payments to eligible farmers (dai ry farmers who delivered milk in 1998-99)
are fixed and made to farmers to compensate them for the removal of regulated
pricing arrangements.  DSAP payments have been notified in the AMS.WT/TPR/M/104/Add.1
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- DEP payments are available to dairy farmers who exit the industry.  These payments
have been notified within the green box (Annex 2:9).
- Dairy RAP payments to assist regional communities adjust to deregulation.  These
have been notified as green box payments (Annex 2:5).
It is also correct that the levy does not apply to exported product:
- The levy which is collected to fund the DIAP is a domestic sales tax applied at the
retail level on all sales of liquid milk.
(iv) Forestry
Question from Japan
Question:  (Please describe in more detail the aim and structure of the export restriction and
licensing system in the forestry sector referred to in para. 38, page.95 of the Report.
Answer:  Regulations relating to export controls for hardwood wood chips are intended to ensure the
appropriate consideration of environmental values in the management of Australia's forests.
The control of Australian exports is governed by the Export Control Act 1982  (the Act). The Act
provides for the making of Regulations to prohibit the export of prescribed goods from Australia,
either absolutely or subject to certain conditions or restrictions.
Regulations created under the abovementioned Act include The Export Control (Hardwood Wood
Chips) Regulations 1996 . These Regulations were amended in April 2000 to ensure that hardwood
woodchips could only be exported from a region if a Regional Forest Agreement (RFA) applied to
that region or if they are exported under a restricted shipment licence.
Regional Forest Agreements cover 10 regions in Australia. They are Tasmania; the Central Highlands,
East Gippsland, Gippsland, North East, and West regions of Victoria; the South-West forest region of
Western Australia; and Eden, North East, and Southern regions of New South Wales. The agreements
are between the Commonwealth and State Governments and take account of conservation andindustry requirements.
Under The Export Control (Hardwood Wood Chips) Regulations 1996  export of hardwood woodchips
from areas not covered by RFAs is only permitted if a restricted shipment licence has been granted for
that purpose. The Regulations ensure each application is considered by the Minister on a shipment-by-
shipment basis, having due regard to the need to protect areas that are or may be required to establisha comprehensive, adequate and representative (CAR) national forest reserve system and any other
relevant matter.
As well as being required to comply with the a bove regulatory requirements under the Act, the
Minister (or delegate) has also had to consider all relevant matters relating to the granting, or refusal
to grant, a licence including issues of natural justice (for example if there is an adverse matter raisedabout an application, the applicant should be given adequate opportunity to respond to such a matter).
Further, when considering an application for a licence , the Minister or delegate must consider relevant
obligations under the Commonwealth environment and heritage legislation.WT/TPR/M/104/Add.1
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Further Information:
A copy of the Regulations is available at:  http ://scaleplus.law.gov.au/html/pastereg/2/1323/top.htm
A copy of CAR reserve criteria is available at:  http://www.affa.gov.au/content/
output.cfm?ObjectID=D2C 48F86-BA1A-11A1-A2200060B0A02033
(ii) Energy
(a) Hydrocarbons
Questions from the United States
Question:  Does Australia accord market access and national treatment for pipeline transportation
and local distribution of natural gas, including the authorization to construct as well as the right to
own and operate pipelines and pipeline facilities or networks?  Please indicate the regulatory
agencies that authorize these activities.
Answer:  There are no market access or national treatment limitations in respect of construction of gas
transmission pipelines and distribution networks.  Technical approvals and licenses are issues by
relevant State Governments and a range of departments are usually involved.  The lead departments in
the major states are Department of Natural Resources and Mines (Qld), Ministry of Energy and
Utilities (NSW), Department of Natural Resource s and Environment (Vic), Primary Industries and
Resources (South Australia), Department of Mine ral and Petroleum Resources (WA), Department of
Infrastructure Energy and Resources (Tas)and Department of Mines and Energy (NT).
The pipeline transportation market (transmission) is regulated by the Australian Competition and
Consumer Commission (ACCC), and the Office of  Gas Access Regulation (OffGAR) in Western
Australia. Some pipelines which operate in a competitive environment are not subject to economic
regulation (e.g. Duke Energy International's Eastern Gas Pipeline). There is no discrimination in the
regulatory regimes against foreign companies.
Question:  Can consumers of natural gas choose their natural gas supplier?Answer:  At the distribution level, regulation is generally effected by State regulatory authorities. Full
retail competition (i.e. choice of gas supplier) is in the process of being implemented across all
Australian States and Territories. In all jurisdictions, firms from large industrial through to small
commercial users will be able to choose their gas supplier. New South Wales has already introduced
full competition in gas to the household level, and Victoria will do so over the next one or twomonths. Other States and Territories have committed to the introduction of full competition at the
household level over the next two years.
Question:  How is third party access implemented?  Please indicate the regulatory agencies that
implement such access.
Answer:  Third party access to natural gas pipelines  and networks is implemented principally through
the National Gas Code, which provides a fram ework for commercial negotiations between
infrastructure owners and access seekers, underpinned by a mandatory set of terms and conditions
(including standard transportation tariffs) approved by independent regulators. The National Gas
Code is part of the Gas Pipeline Access Law, a nationally consistent legislative framework for third
party access in the pipeline and network sectors of the gas industry developed as part of the NationalWT/TPR/M/104/Add.1
Page 83
Competition Policy, and implemented through agreement by the Council of Australian Governments
in 1997.
Third party access arrangements to gas distribution networks are approved by State and Territory
regulators, such as the Essential Services Commission (Vic), the Independent Pricing and Regulatory
Tribunal (NSW), the South Australian Independe nt Pricing and Access Regulator (SA), Queensland
Competition Authority, the Independent Competition and Regulatory Commission (ACT), Office of
the Tasmanian Energy Regulator, OffGAR (WA) and the Department of Business Industry and
Resource Development (NT).
(4) MANUFACTURING
(ii) Pharmaceuticals
Questions from the United States
Questions:  Please provide further details on the Pharmaceutical Benefits Scheme (PBS) and
Pharmaceutical Industry Investment Programme (PIIP) discussed in these paragraphs.  These
programs do not appear to be notified.  Please explain why these programs are non-notifiable?
Answer: The PBS provides universal access to medici nes by Australian residents when they purchase
medicines on PBS prescriptions from community pharm acists.  It does not involve the payment of a
subsidy within the meaning of the WTO Agreemen t on Subsidies and Countervailing Measures (SCM)
and is therefore not notifiable under the SCM.
The PIIP was notified in G/SCM/N/60/AUS/R ev.1 on 19 December 2000 and in G/SCM/N/71 on
4 December 2001.
Question from Switzerland
Questions:  Referring to the Pharmaceutical Benefits Scheme (PBS) and the Pharmaceutical Industry
Investment Programme (PIIP): Do only domestic firms benefit from these programmes or can also
foreign drug manufacturers apply for such financial support?  If PBS and PIIP are only given todomestic firms: How does Australia justify a possib le discrimination of foreign manufacturers against
domestic enterprises?  How can these financial aids be justified in the light of the WTO Agreement on
Subsidies and Countervailing Measures?
Answer:  Both domestically-owned and foreign-owned firms can access the PBS and PIIP and do
participate in the schemes.
Questions (paragraph 61):  So called “springboarding” provisions allow regulatory approval for
generic products still under patent.  How does Australia justify such measures in the light of
obligations resulting from the WTO TRIPS Agreement?  Will it also be allowed to sell the approved
generics on the market even though the patent on the reference drug is still valid?
Answer:  (i) The Australian pharmaceutical "springboarding" provisions enable generic manufacturers
to undertake otherwise infringing activities solely for the purposes of meeting pre-marketing
regulatory requirements for therapeutic use in humans.  Under the Australian system, springboarding
is restricted to patents which have been granted an extended patent term.
The TRIPS Agreement sets out a patent holder's exclusive rights, in Article 28.  It also permits, in
Article 30, limited exceptions to those rights, provided that these exceptions do not unreasonablyWT/TPR/M/104/Add.1
Page 84
conflict with the normal exploitation of the patent and do not unreasonably prejudice the legitimate
interests of the patent owner, taking account of the legitimate interests of third parties.
The Australian "springboarding" provisions, so far as they impact on the exclusive rights in
Article 28, are entirely consistent with the exceptions permitted under Article 30.
(ii) No.  The provisions, in the Australian Patent Act , enable a generic manufacturer to produce a
substance solely for the purposes of obtaining regulatory approval, not for sale, while the patent is still
in force.
(iii) Automotive
Questions from Republic Of Korea
Questions:  Since 2001, the Australian Government has maintained the ACIS (Automotive
Competitiveness and Investment scheme) and the “Review of Automotive Assistance” announced by
the Australian Productivity Commission indicates that the scheme will last even after 2005.  Ourconcern is that the scheme includes specific support to industries producing automotive vehicles and
parts, thus creating unfair competition conditions for foreign companies in Australia.
Does Australia have any plans to eliminate this scheme? And what is the view of the Australian
government on the WTO-consistency of this scheme.
Answer:  ACIS is scheduled to conclude on 31 December 2005.  The Productivity Commission is
conducting a review of post 2005 assistance arrangements for the automotive manufacturing sector in
Australia.  The Government will consider the recommendations of the Review of Automotive
Assistance later this year.
ACIS is consistent with the WTO Agreement on Subsidies & Countervailing Measures (SCM) and
other WTO Agreements.
Questions from the United States
Questions:  Please provide further details on the programs discussed in these paragraphs (eg
“[o]ther government support includes customs duty and sales tax relief, export insurance and
financial services, immigration assistance, and a variety of R&D support schemes,” excluding the
Automotive Competitiveness and Investment Scheme  (ACIS) which Australia has already notified.)
These programs do not appear to have been notified.  Please explain why these programs are non-
notifiable.
Answer:  These “[o]ther government support” programs are generic policy arrangements that are not
specific to the automotive industry.  Most of these are described elsewhere in the text of the WTO
report.
The Automotive Market Access and Development Strategy concluded on 30 June 2002 and no
replacement or substitute policy measure has been introduced.
Questions from Chinese Taipei
Questions:  Based on a report from the Australian Productivity Commission, Chinese Taipei believes
that as a developed country, Australia’s import tariffs on textiles, clothing and footwear (TCF), and
on passenger motor vehicles (PMV) are relatively high, and notes that TCF and PMV account for theWT/TPR/M/104/Add.1
Page 85
largest shares of domestic support.  Please could Australia say whether it will further reduce import
tariffs and domestic support on PMV and TCF.
Answer:  Australia has unilaterally and systematically reduced its import tariffs on passenger motor
vehicles and components over recent years and has no  tariff quotas on motor vehicles.  Import duty on
passenger motor vehicles and components is currently 15 per cent and will fall to 10 per cent on
1 January 2005.  Light commercial and off-road vehicles are subject to a 5 per cent import duty.  The
government will decide later this year on post 2005 policy arrangements for the Australian automotiveindustry.
The Australian Government undertook an extensive review of the textiles, clothing and footwear
(TCF) industry in 1997. This review resulted in a commitment by the Government to maintain tariff
levels at year 2000 levels until 2005. This commitment provides an environment of certainty for
Australia's TCF firms as they adjust to increasing global competition.
The Government has announced a commitment to undertake a substantive inquiry in late 2002 of post
2005 assistance to the TCF industry.
Questions:  It was noted that a $A2.8 billion Automotive Competitiveness and Investment Scheme
(ACIS) is in effect for the period 2001 to 2005.  Please provide details of this scheme including the
figures on how many companies are benefiting from  the scheme and the amount of credit claimed.
Please also clarify whether this scheme is consistent with the WTO SCM Agreement.
Answer:  The Automotive Competitiveness and Investment Scheme (ACIS) is directed towards
encouraging new investment and innovation in the Australian automotive industry.  The scheme
commenced on 1 January 2001 and will conclude on 31 December 2005.
ACIS rewards strategic investment, research and development and the production of eligible motor
vehicles through the issue of import duty credits to registered participants.  These credits can be used
to discharge customs duty on eligible automotive imports, or alternatively, can be sold or otherwisetransferred.
Eligible participants in the scheme include motor vehicle producers (MVPs), automotive component
producers (ACPs), automotive machine tool and tool ing producers (AMTPs), and automotive service
providers (ASPs).
Eligible ACIS incentives are calculated as follows:
MVPs
Capped incentives
- 25% of the value of all other production of PMVs (other than PMVs sold in Australia
and New Zealand), multiplied by the current PMV tariff rate.
- 10% of the value of investment in plant and equipment averaged over the preceding
three yearsWT/TPR/M/104/Add.1
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ACPs, AMTPs and ASPs
Capped incentives
- 25% of the value of investment in plant and equipment, averaged over the preceding
three years
- 45% of the value of investment in R&D, averaged over the preceding three years
The total amount of capped incentives payable under ACIS is limited to $2 billion over five years.
Furthermore, no participant will be permitted to receive incentives exceeding 5 per cent of its annualsales in the preceding year.
Currently, there are approximately 200 participants in ACIS, with capped credit payments to these
participants broadly averaging $100 million over each of the first six quarters of the scheme’s
operation.  Uncapped incentives, which are only available to MVPs, are estimated to total
approximately $825 million over the operation of ACIS and will be spread broadly over the
years 2001 to 2005.
ACIS is compliant with Australia’s WTO obligations.
Questions:  Referring to paragraph 70, the Productivity Commission was expected to report the
findings of its review of post-2005 assistance measures for the automotive industry and present its
recommendation to the Australian government.  Please provide details of this report.
Answer:  The Productivity Commission has concluded its Review of Automotive Assistance  and
forwarded its final report to the Australian government on 30 August 2002.  The government is
considering the report and will release it within twenty five Parliamentary sitting days from the date
of receipt.  Following its release, the report can be accessed at
http://www.pc.gov.au/inquiry/auto/index.html.  The Productivity Commission’s preliminary findings
are now available in a position paper which can be viewed at
http://www.pc.gov.au/inquiry/auto/positionpaper/index.html.
Questions from Republic Of Korea
Questions:  Since 2001, the Australian Government has maintained the ACIS (Automotive
Competitiveness and Investment scheme) and the “Review of Automotive Assistance” announced by
the Australian Productivity Commission indicates that the scheme will last even after 2005.
Our concern is that the scheme includes specific support to industries producing automotive vehicles
and parts, thus creating unfair competition conditions for foreign companies in Australia.
Does Australia have any plans to eliminate this scheme? And what is the view of the Australian
government on the WTO-consistency of this scheme.
Answer:  ACIS is scheduled to conclude on 31 December 2005.  The Australian government will
decide later this year on post 2005 policy arrangements for the automotive industry.
ACIS is compliant with Australia’s WTO obligations.WT/TPR/M/104/Add.1
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Question from the European Union
Question:  We note the reference to the Productivity Commission’s inquiry into Post-2005 Assistance
Arrangements for the Automotive Manufacturing Sector.  The Productivity Commission submitted its
final report at the end of August, but (at the time of tabling the question) has not yet been made
public.  Can Australia indicate what are the main recommendations of this report and the
Government’s response, notably in terms of tariffs, luxury car tax and the Automotive Competition
and Investment Scheme?
Answer:  The Australian government is consider ing the Productivity Commission’s final report on
Review of Automotive Assistance .  The report can be accessed at
http://www.pc.gov.au/inquiry/auto/index.html.  The Productivity Commission’s preliminary findings
are now available in a position paper which can be viewed at http://www.pc.gov.au/inquiry/auto/
positionpaper/index.html.
The Australian government will decide later this year on post 2005 policy arrangements for the
automotive industry.
(iv) Shipbuilding
Question from the United States
Questions:  Please provide further details on the Shipbuilding Innovation Scheme (SIS).  Do any
measures under this program constitute actionable subsidies?
Answer:  The Shipbuilding Innovation Scheme (SIS ) enables shipbuilders registered under the Bounty
(Ships) Act to access payment of a research and development bounty. It provides payment at the rate
of 50% of innovation expenditure up to a total of 2% of the eligible construction costs of a bountable
vessel.  The SIS applies to eligible research and development expenditure bounty for vessels
completed on or before 30 June 2004.
Australia has notified this program contained in Australia’s subsidy notification (document
G/SCM/N/71/AUS).
(5) SERVICES
Question from India
Question:   In February 2001, arrangements were made by the Australian Government to allow easier
travel of IT professionals from overseas countri es including India.  On 16 July 2002, the Australian
Government announced suspension of priority vi sa processing arrangements for Information and
Communication Technology 9ICT) workers.  It fe ared that the new visa regime would have an
adverse impact on movement of IT professionals/pers onnel, who may be required to visit Australia at
short notice in connection with their on-site assi gnments on behalf of their Indian software employer
firms or on behalf of their Australian IT  employer firm(s) as services providers/IT professionals.  In
view of the above, is Australia considering reintroducing the priority visa processing arrangements
for information and communication technology (ICT) workers/professionals from overseas including
India
Answer:  The Australian Government ceased giving priority treatment to IT professionals seeking to
enter Australia on a permanent basis under the skilled migration program in 2002.  The GovernmentWT/TPR/M/104/Add.1
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has no plans to restore priority treatment for IT professionals seeking to enter Australia on a
permanent basis under the skilled migration program.  As a result, applications from IT professionalswill become part of the general caseload of migration and temporary entry applications that are
processed in the order in which they are received.
The ability of IT professionals to gain temporary entry to Australia is not affected by that decision.
- temporary caseload processing times are generally only a matter of several weeks,
with there being adequate scope to give high er priority to any applications where the
circumstances indicate that such is warranted.
Question from Brazil
Question:  In mode 4 horizontal commitments, "s pecialists" are subject to individual compliance to
labour market testing.  Which are the applied criteria?  Shall the specialists be employed by a
company from their home countries?
Answer:  Australia does not require labour market testing for specialists seeking long stay temporary
entry to Australia.
(ii) Domestic support
Question from Japan
Question:  In Australia’ s schedule of commitments, the subsidies for research and development are
“unbound”. Please clarify if there are any domestic support measures in Table IV.5, which are not
applied in a non-discriminatory manner to foreign service providers.  If there exist any such
measures, Japan is interested in knowing whether they are classified as subsidies for research and
development.  Please provide information on the objectives, scope, application requirements and
procedures, criteria for eligibility etc. of the ‘Export Market Development Grant Scheme’.  Please
also provide information on ‘Investmen t incentives to IBM’ in Table IV.5.
Answer:  There is no impediment to foreign owned companies accessing the R&D support programs
listed in Table IV.5, subject to the following conditions:
Cooperative Research Centres
CRC grants require the participation of at least one Australian higher education institution in research
collaboration. International participation from overseas universities and government-sector groups in
CRC programs is encouraged, provided that program funds are used for research within Australia.Companies based and owned oversees may also participate in CRCs.
R&D Start Programs
Assistance for R&D through the R&D Start and related programs is provided on a competitive basis
to non-tax exempt companies, provided they are incorporated in Australia.
R&D tax concession
Tax concessions for R&D expenses are available to foreign-owned companies incorporated in
Australia. Except in special circumstances, R&D activities must be conducted in Australia.WT/TPR/M/104/Add.1
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Innovation Investment Fund (IIF)
Access to the IIF requires companies to be incorporated in Australia, with a majority of its employees
(by number) and assets (by value) inside Australia at the time IIF facilitated investment.  The
company must use the whole of the initial investment within Australia.
Biotechnology Innovation Fund (BIF)
To access the BIF, companies must be incorporated in Australia.
Export Market Development Grants (EMDG) Scheme
Objectives
The primary objective of the program is to encourage small and medium sized Australian businesses
to develop an export culture. Funding is paid by way of taxable grant to firms and other legal persons
who are seeking to enter export markets.
Scope
Any Australian individual, partnership, company, association, co-operative, statutory corporation or
trust that has carried on business in Australia during the year for which they wish to apply for a grant
is eligible to apply.  In addition, the applicant must:
- have income of less than $50 million in the grant year;
- have export earnings of less than $25 million;- have incurred at least $15,000 of eligible expenses under the scheme (first time
applicants can combine two year’s expenses.
- Applicants are reimbursed 50% of their expenditure on eligible promotion and
marketing activities, less the first $15,000.  The minimum grant is $5,000.   The
maximum grant is $200,000, subject to available funds.  About 3,000 grants
averaging A$45,000 each are paid each year.
Application requirements
Applicants must submit an application form prov iding relevant details, including the expenses
incurred on eligible marketing expenditure, after the financial year in which they incurred that
expenditure has closed.
Austrade, the agency which administers the scheme, assesses the application and determines and pays
the relevant amount of grant, if any.
Investment incentive to IBM
In 2000/01, the Australian Government provided awarded a strategic investment incentive through
Invest Australia’s Strategic Investment Coordination (SIC) program, to facilitate an A$37m
investment by IBM Australia to build an E-business Innovation Centre in Sydney for education and
training and IT skills development.  The underlying rationale of the SIC program is to attractWT/TPR/M/104/Add.1
Page 90
additional capital investment in strategic industries located in Australia.  The incentives are open to
foreign and domestic investors.
Questions from Brazil
Question:  In mode 3 horizontal commitments, th ere's an “unbound” for subsidies for research and
development. Please clarify the scope and applicability of the regime.
Answer:  There is no impediment to foreign owned companies accessing the R&D support programs
listed in Table IV.5, subject to the following conditions:
Cooperative Research Centres
CRC grants require the participation of at least one Australian higher education institution in research
collaboration. International participation from overseas universities and government-sector groups in
CRC programs is encouraged, provided that program funds are used for research within Australia.
Companies based and owned oversees may also participate in CRCs.
R&D Start Programs
Assistance for R&D through the R&D Start and related programs is provided on a competitive basis
to non-tax exempt companies, provided they are incorporated in Australia.
R&D tax concession
Tax concessions for R&D expenses are available to foreign-owned companies incorporated in
Australia. Except in special circumstances, R&D activities must be conducted in Australia.
Innovation Investment Fund (IIF)
Access to the IIF requires companies to be incorporated in Australia, with a majority of its employees
(by number) and assets (by value) inside Australia at the time IIF facilitated investment.  The
company must use the whole of the initial investment within Australia.
Biotechnology Innovation Fund (BIF)
To access the BIF, companies must be incorporated in Australia.
Question:  In mode 4 horizontal commitments, "s pecialists" are subject to individual compliance to
labour market testing. Which are the applied criteria? Shall the specialists be employed by a company
from their home countries?
Answer:  Australia has eliminated its labour testing provisions.
Question:  Labour market testing is not required for specialists if the position in question is within a
labour agreement for the entry of specialists from overseas. Is there any labour agreement in force?
Answer:  See answer to question above.
Question:  If so, which are the signatory countr ies? How many foreign workers were admitted to
Australia in the last four years?WT/TPR/M/104/Add.1
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Answer:  See answer to question above.
Question:  Australia scheduled commitments across a range of services under the GATS. However,
there's no commitments for the following: postal services; courier services; audiovisual services; data
base services; and distribution services for agricultural raw materials, food, beverages and tobacco
(wholesale and commission agents' services), among other ones. Are there any restrictions of Market
Acess, National Treatment and/or domestic regulation that limit the provision of those services? Is
Australia willing to bind commitments on those sectors in the new round of negotiations?
Answer:  Our  preference would be to discuss th ese issues in the context of the GATS negotiations.
Question:  Please explain the horizontal limitation regarding restriction of foreign investment subject
to “national interest” considerations as committed by Australia in its the GATS schedule of specific
commitments. Has Australia considered the need to schedule this restriction to foreign investment
bearing in mind Articles XIV (General Exceptions) and XIVbis (Security) Exceptions of the GATS?
Answer:  Notification and examination under Australia’s foreign investment policy and the Foreign
Acquisitions and Takeovers Act 1975 is a horizontal commitment to the GATS under mode 3. This is
a horizontal commitment because Australia’s foreign investment policy covers investments in all
sectors.
All proposals submitted to the Government are exam ined with regard to the national interest. In
preparing its advice to the Treasurer, the Foreign Investment Review Board considers whether the
proposal is inconsistent with:
- existing government policy and law ⎯ taking the view that existing policy and law
define important aspects of the national interest (for example, environmental
regulation and competition policy);
- national security interests; and
- economic development.
Australia is not considering scheduling this exception.
Question from Canada
Question:  Paragraph 79 states that Australia has submitted to the WTO Council for Trade in
Services negotiating proposals on areas such as professional services (i.e., legal, accountancy,
architecture, and engineering services).  Please advise if there have been developments in terms of
regulatory reform in the area of professional services since Australia’s trade policy review in 1998.
Answer:  Yes, there have been developments in terms of regulatory reform in the area of professional
services since Australia’s trade policy review in 1998.  We will revisit this issue when formulating ourresponse to the requests received from Member countries.
Questions from Chinese Taipei
Question:  Paragraph 78 states that there exists restriction of foreign investment subject to national
interest considerations in Australia’s GATS commitments.  Chinese Taipei requests from Australia
examples of what would constitute “national intere st considerations”.  It would be appreciated if
Australia would also provide relevant information regarding its current application of restrictions.WT/TPR/M/104/Add.1
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Answer:  For the temporary business long stay visa, the visa applicant can receive up to four years at a
time.  In principle, there is no limit to the number of four years visas that they can receive.
Legal services
Questions from the United States
Question 1:  Is Australia contemplating removal of its requirement that foreign law firms in New
South Wales, Victoria and Queensland must have at least one equity partner who is a resident?
Question 2:  Is Australia willing to remove its restrictions on the practice of foreign law, specifically
that individuals practising foreign law only join a local firm as an employee or as a consultant and
may not enter into partnership with or employ local lawyers?
Answer:
Background
In March 1996, the Attorneys-General of each State and Territory Government and the Federal
Government, i.e. the Standing Committee of Atto rneys-General (SCAG), unanimously agreed that
there should, at the very least, be a clear statutory indication that there is no barrier to the practise of
foreign law in Australia.
That policy position resulted in the developm ent of a model Bill setting out two options:
- Option A - provides for a comprehensive framework for the regulation of foreign
legal practice in the relevant State or Territory; and
- Option B - provides for a limited approach simply stating that a person does not
commit an offence by practising foreign law in the relevant State or Territory.
To date, the States of Victoria and New South Wales as well as the Australian Capital Territory
(ACT) and the Northern Territory (NT) have implemented legislation based on Option A.  Legislation
based on Option B has been implemented in South Australia.  Pre-existing legislation in Tasmania
provides a simple mechanism for obtaining the right to practise foreign law by foreign lawyers, either
on their own account, or in combination with a local lawyer.  The States of Queensland and Western
Australia have indicated that they intend to implement foreign lawyer legislation based on Option A
in the near future.  There is no legislative bar to the practise of foreign law in Queensland or Western
Australia.  However, the Law Society of Queensland has issued guidelines on the practice of foreign
law in that State.
Answer to question 1:
Yes.  Legislation in New South Wales and Victoria no longer requires at least one equity partner to be
resident.  The Queensland guideline with the residency requirement was removed in late 2000.
Answer to question 2:
In the Australian States of greatest economic significance, New South Wales and Victoria, foreign
lawyers can enter into partnership with or employ  local lawyers.  This is also the situation in
Tasmania, the ACT and the NT.  Queensland guidelines also provide for partnership between foreign
and local law firms.  As indicated earlier, Western Australia intends to implement legislation on theWT/TPR/M/104/Add.1
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practise of foreign law which would provide for partnership between local and foreign lawyers as well
as employment of local lawyers by foreign lawyers.  There is no legislation in South Australia thatprovides for the employment of local lawyers by foreign lawyers or for partnership between local and
foreign lawyers.  Australia will continue to review the situation concerning comprehensive foreign
lawyer legislation in Australia.
Question from the United States
Accounting services
Question:  Is Australia contemplating removal of its permanent residency requirement for the
licensing of auditors or liquidators?
Answer:  This issue has recently been the subject for discussion at the Australian Securities and
Investments Commission (ASIC).  It is most unlikely that the current policy will be altered due to the
inability of ASIC to monitor and discipline au ditors and liquidators who live and work offshore.
Education services
Question from Norway
Question:  Norway would like to underline that trade in educational services constitute a growing
international business. Since the beginning of th e 1990s the number of Norwegian students studying
in Australia has doubled, meaning that there are currently some 4,300 Norwegian students enrolledin Australian colleges and universities. Norwegian students have experienced a fluctuation in their
tuition, which tends to follow our national subsidy level given to higher education.
Norway would like to emphasise the importance of non-discriminatory principles and would be
pleased if Australia could explain how the tuition facing international students are calculated.
Moreover, we wonder if there are any institutional variations or differences in tuition fees depending
on the nationality of the student.
Answer:  The majority of international students are full-fee paying unless they are recipients of aid
scholarships. Institutions are required to charge, as a minimum, fees designed to recover full
economic costs applicable to the course on offer, in order to ensure that resources provided to
Australian governments for the education of Australian students are not diverted to the provision of
services to overseas students. The Government sets the minimum charge for courses based on the cost
of provision. The Government does not set differential minimums based on country of origin of thestudent. Above that threshold fees for overseas students are deregulated and universities, as
autonomous institutions, can set individual course fees according to market demand.
(v) Financial services
(a) Banking and finance
Question from Brazil
Question:  In relation to Banking and other Financial Services, mode 3 limitations on market access,
which are the "prudential requirements" and "competition policy considerations" that shall be satisfied
by a company who seeks to operate in Australia?WT/TPR/M/104/Add.1
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Answer:  Banking licences are issued in Australia by the Australian Prudential Regulation Authority
(APRA), an independent regulatory body, under Section 9 of the Banking Act 1959.  Since mid-1999all applications for licences have been considered by the Cross-Divisional Licensing Committee
within APRA.  This Committee recommends to executive management whether an application should
be accepted or rejected.  Since this Committee was formed, no licence applications have been refused.
In a few instances potential applicants have not been able to satisfy APRA that they can meet the
authorisation requirements and their draft applications have not been presented to the LicensingCommittee.
(Note:  Australia could not identify this statement in our Trade Policy Review and would appreciate
further clarification if the above information does not suffice.)
Questions from Chinese Taipei
Questions:  Chinese Taipei welcomes Australia’s financial reforms undertaken since 1997 and would
like to raise the following questions based on the material prepared by the WTO Secretariat.
Question:  Paragraph 86 states that foreign banks operating as branches can only accept deposits
exceeding A$250,000 and that this restriction was to protect retail depositors, as foreign bank branch
operations are subject to more liberal regulatory requirements.  Please explain the rationale behind
the application of different regulatory requirements to foreign bank branches from those applied todomestic banks.  Chinese Taipei would also appreciate knowing whether the Australian authorities
have any plans to remove the restriction in the future.
Answer:  Foreign banks can chose their preferred form of commercial presence in Australia. Foreign
banks wishing to operate in the ‘wholesale market’ may operate through a branch structure and
thereby not be required to maintain endowed capital  in Australia or be subject to any capital-based
large exposure limits (as these are the responsibility of the home supervisor).
As the Australian Prudential Regulation Authority (APRA) would not have direct oversight of the
capital adequacy of foreign bank branches, those foreign bank branches are not subject to the
depositor protection provisions of the Banking Act 1959 and are not permitted to accept “retail
deposits”.
There are no explicit deposit insurance arrangements in Australia.  Retail depositors are protected
through the priority claims afforded depositors of locally-incorporated banks by the depositorprotection provisions of the Banking Act 1959.  APRA, through its supervision of the capital
adequacy of locally-incorporated banks, seeks to support such claims. As APRA does not have direct
oversight of the capital adequacy of foreign bank branches, those foreign bank branches are not
subject to the depositor protection provisions of the Banking Act 1959 and are not permitted to accept
“retail deposits”.  Foreign bank branches are, nevertheless, permitted to engage in all other activitiesopen to locally-incorporated bank branches. The purpose of the measure is to ensure that APRA can
effectively protect retail depositors in Australia.
The prudential practices governing foreign bank branches in Australia are consistent with the Basel
Committee on Banking Supervision’s core principles applicable to the supervision of banks and the
cross-border business operations of banks.
We are not in a position to comment on future plans.WT/TPR/M/104/Add.1
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Question:  According to the specific commitments in Australia’s service sector, when applying for
entry to the Australian financial market, foreign banks qualify only because their entry is justified onthe grounds of their contributing benefit to the competitiveness of Australia’s financial market,
according to the economic needs test.  Please explain how this conforms to the WTO obligations on
transparency.
Answer:  The Australian Prudential Regulation Au thority (APRA), an independent regulatory body,
issued its ‘Guidelines for Authorisation of ADI’s” after being given responsibility for authorisingbanks and insurers.  These guidelines are publicly available on APRA’s website www.apra.gov.au,
and indicate that prospective applicants do not need to meet an “economic needs test” or “demonstratetheir potential contribution to competition”.
Question:  According to the Financial System Inquiry, Australia stated that the large-scale transfer of
ownership of the financial system into foreign hands would be contrary to the national interest.
Please explain the definition of “large-scale” and the reasoning behind the assumption.
Answer:  The term ‘large-scale’ originates from the Final Report of the Financial System Inquiry.
This independent inquiry, inter alia, stated that;
‘The Inquiry is of the view there would be no economic disadvantage in some increase in the
percentage of foreign ownership of the Australian financial system. Its view in this regard extends
equally to the majors as to smaller institutions. Foreign ownership can bring with it a range of benefits
for countries, including: injections of capital; access to new skills and technologies; and enhanced
competitive pressure on the domestic market.  However, the Inquiry does not consider that a large
scale transfer of ownership of the Australian fi nancial system to foreign hands would be in the
national interest. Such an eventuality could restrict the options for the future development of the
financial system and Australia’s place in the regional and global economy. The general scheme of
regulation of foreign investment is sufficient to meet this objective.’
On 9 April 1997, the Treasurer issued the Government’s response to the Final Report in Press Release
No.28 (1997), which, inter alia, stated that;
‘The Government has decided to remove the former Government’s blanket prohibition on foreign
takeover of any of the major banks. Any proposed foreign takeover or acquisition will need to be
assessed, like any other proposed foreign takeover or acquisition, on a case by case basis and on itsmerits in accordance with the Foreign Acquisitions and Takeovers Act of 1975.  In making
assessments, however, the Government will apply the principle (as was concluded by the Inquiry)
that any large scale transfer of Australian ownership of the financial system to foreign hands would be
contrary to the national interest.’
Questions from the European Union
Question:  Could Australia specify in which respect the regulatory requirements for foreign bank
branch operations are more liberal than for subsidiaries or local companies?
Answer:  Foreign bank branches are not required to maintain endowed capital in Australia and are not
subject to any capital-based large exposure limits as these are the responsibility of the home
supervisor. The Australian Prudential Regulation Authority (APRA), however, monitors credit riskconcentrations and other risk exposures borne by foreign bank branches as part of its prudential
oversight of their local operations.WT/TPR/M/104/Add.1
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Australia’s prudential practices governing foreign bank branches are consistent with the Basel
Committee on Banking Supervision’s core principles applicable to the supervision of banks and thecross-border business operations of banks.
Question:  What has been the practice of the national interest test for licensing of foreign banks? How
many licences have been refused in recent years? We would also like to seek clarification whether the
acquisition by a foreign institution of one of the four major banks (NAB, ANZ, Westpac or
Commonwealth) would be considered as a larger-sca le transfer of ownership and hence contrary to
the national interest?
Answer:  Banking licences are issued by the Australian Prudential Regulation Authority (APRA), an
independent regulatory body, under Section 9 of the Banking Act 1959. APRA has stated that relevant
factors in the national interest test are that applicants must have the capacity and commitment to
conduct banking business with integrity, prudence and competence on a continuing basis.
Since mid-1999 all applications for licences have been considered by the
Cross-Divisional Licensing Committee within APRA.  This Committee recommends to executive
management whether an application should be accepted or rejected.  Since this Committee was
formed, no licence applications have been refused. Before reaching the Committee, detailed
discussions are held with applicants in order to develop workable licensing proposals.  In a few
instances potential applicants have not been able to  satisfy APRA that they can meet the authorisation
requirements and their draft applications have not been presented to the Licensing Committee.
The acquisition by a foreign institution of one of the four major banks (NAB, ANZ, Westpac or
Commonwealth) would be assessed, like any other proposed foreign takeover or acquisition, in
accordance with the Foreign Acquisitions and Takeovers Act 1975, on a case by case basis and on its
merits.
Question from Hong Kong
Question:  It is noted that foreign investors holding a share greater than 15% in a financial sector
company must obtain the approval of the Treasurer, who will take into account the national interest of
the case.  The Australian authorities stated that any large-scale transfer of the ownership of the
financial system to foreign investors would be cont rary to national interest.  Is there any benchmark
signifying “what is a large-scale transfer”?
Answer:  The term ‘large-scale transfer’ originates from the Final Report of the Financial System
Inquiry.  This independent inquiry, inter alia, stated that;
‘The Inquiry is of the view there would be no economic disadvantage in some increase in the
percentage of foreign ownership of the Australian financial system. Its view in this regard extends
equally to the majors as to smaller institutions. Foreign ownership can bring with it a range of benefitsfor countries, including: injections of capital; access to new skills and technologies; and enhanced
competitive pressure on the domestic market.  However, the Inquiry does not consider that a large
scale transfer of ownership of the Australian fi nancial system to foreign hands would be in the
national interest. Such an eventuality could restrict the options for the future development of the
financial system and Australia’s place in the regional and global economy. The general scheme ofregulation of foreign investment is sufficient to meet this objective.’
On 9 April 1997, the Treasurer issued the Government’s response to the Final Report in Press Release
No.28 (1997), which, inter alia, stated that;WT/TPR/M/104/Add.1
Page 97
‘The Government has decided to remove the former Government’s blanket prohibition on foreign
takeover of any of the major banks. Any proposed foreign takeover or acquisition will need to beassessed, like any other proposed foreign takeover or acquisition, on a case by case basis and on its
merits in accordance with the Foreign Acquisitions and Takeovers Act of 1975.  In making
assessments, however, the Government will apply the principle (as was concluded by the Inquiry)
that any large scale transfer of Australian ownership of the financial system to foreign hands would be
contrary to the national interest. ‘
(v) Financial Services
Question from China
Question:  I am instructed to raise concerns over the market access conditions in Australia in trade in
services, including telecom, financial services, air and marine transportation, etc.  Foreign equity
interests in those areas are subject to an upper limit, usually less than 50%, and qualificationexamination from administrative agencies of foreign participants is also required.  China believes
that the market access threshold to those sectors can be further lowered to promote the free trade in
the service area, particularly in view of Australia's competitiveness in these sectors as a developed
economy.  As an illustration for the problems encountered by Chinese services providers, I would like
to mention the application to establish a branch in Sydney by the Industrial and Commercial Bank ofChina (ICBC).  The application was turned down on a number of occasions by the financial
administration of Australia over considerations including Non-Performing Loan Rate, return on
capital, risk management system and rating given by major financial institutions.  My Government
believes that the reason given by Australia failed to reflect the real operative situation of ICBC and
this rejection of the application lacks legitimate ground.  We hope that a more objective approach can
be employed by the financial administration in Australia in dealing with this issue with a view to an
early appropriate solution.
Answer:  In general the services market in Australia is open and liberal as reflected in our schedule of
commitments.  No restrictions have been placed on the establishment of a commercial presence in the
telecommunication sector or the financial services sector provided that potential entrants can satisfy
prudential requirements.  While not entirely excludi ng foreign ownership, there are, however, foreign
investment limitations in respect of Qantas, Tels tra, the four major banks (Commonwealth, Westpac,
ANZ and National) and newspapers and television stations (the media).  These limitations are judged
to be in the national interest.
As regards the more particular case of efforts by the Industrial and Commercial Bank of China
(ICBC) to establish a branch in Sydney, Australia would like to advise that banking licences are
issued by the Australian Prudential Regulation Au thority (APRA), an independent regulatory body,
under Section 9 of the Banking Act 1959 .  Since mid-1999 all applications for licences have been
considered by the Cross-Divisional Licensing Committee within APRA.  This Committee
recommends to executive management whether an application should be accepted or rejected.  Since
this Committee was formed, no licence applications have been refused.  Before reaching the
Committee, detailed discussions are held with the applicants in order to develop workable licensingproposals.  In a few instances potential applicants have not been able to satisfy APRA that they can
meet the prudential requirements.WT/TPR/M/104/Add.1
Page 98
(b) Insurance
Questions from Chinese Taipei
Question:  Chinese Taipei noted that foreign insurance companies in Australia face limitations e.g.
they are prohibited from establishing new foreign branches of life insurers and from placing life
insurance business with foreign insurers.  Please explain the reasons for such limitations and whether
Australia is considering any deregulation in this area in the new round of GATS negotiations.
Answer:  The prohibition on life insurance branching was introduced in a context of major prudential
reform which saw, among other things, the establishment of new, technically detailed liability
valuation and capital requirements, and detailed requirements in respect of the equitable allocation of
company profits (Surplus) between shareholders a nd policyholders.  In view of these innovative
reforms it was considered that satisfactory prudential supervision could best be achieved where the
life company is an Australian incorporated entity.
The statement that ‘foreign insurance companie s in Australia… are prohibited from… placing life
insurance business with foreign insurers’ may be misleading. Under recent reforms to the
Corporations Act 2001, all general insurance and life insurance participants (including insurers,
agents and brokers) must comply with a new and uniform licensing, disclosure and conduct regime
that applies to most areas of the financial services sector. The new regime is designed to improveconsumer protection and market integrity.
Foreign insurance companies also have the opportunity to apply for a licence through the independent
regulator, the Australian Securities and Investments Commission. However foreign insurance
companies who do not chose to apply for a licence under the new regime can still access the
Australian market, though must provide their products through a licensed insurance intermediary
(such as an agent or broker).
Under the new regime, the disclosure requirements relating to unauthorised foreign insurers have been
reduced for certain consumers. The requirement that clients provided or recommended policies with
unauthorised foreign insurers must receive greater disclosure (e.g. be informed that the insurer is not
subject to the usual regulation for insurers in Aust ralia) still applies for 'retail' clients. However,
sophisticated clients deemed to be 'wholesale' clients, which includes those involved in business, are
no longer required to be provided with this information concerning unauthorised foreign insurers.
If Chinese Taipei wishes to make a request in the context of the current GATS Financial Services
negotiations, Australia will consider it.
Question:  Paragraph 91 states that in the case of any persons wishing to gain influence over a
registered insurance company, the Treasurer’s approval is required.  The Treasurer may approve an
application if it is in the “public interest”, and if the persons influencing the company are “fit and
proper”.  Please explain the criteria involved in the “fit and proper” test and explain how the
measures comply with GATS requirements.
Answer:  The Insurance Acquisitions and Takeovers Act 1991(IATA) protects the public interests by
ensuring that the affairs of Australian registered-insurance companies are carried out in a prudential
manner and that unsuitable persons do not gain a position of influence over Australianregistered-insurance companies.WT/TPR/M/104/Add.1
Page 99
Any person (foreign or domestic) wishing to gain influence over a registered insurance company
would require the Treasurer's approval under IATA. The Treasurer will approve an application if it isin the ‘public interest’.  When determining if an application is in the 'public interest', the Treasurer
will look at the concentration of economic power in the insurance industry, the national interest and
whether persons influencing the company are fit and proper.
When considering if a person is ‘fit and proper’ the Australian Prudential Regulation Authority
(APRA), an independent regulatory body, refers to, the individual’s formal qualifications and workexperience and demonstrated ability in a previous role as evidence that the person is fit to discharge
the functions of the role for which they are being considered.
Fit is formally defined as “qualified, competent, worthy”. Propriety is defined as the “correctness of
morals and behaviour”. This is assessed by reference to: a person’s conduct in the discharge of their
duties; the reputation and character of the individu al including whether the individual has engaged in
unlawful or improper conduct or is an undischarged bankrupt
Having a ‘fit and proper’ criteria is consistent with international regulatory requirements under the
Basel Committee’s “Core Principles for Effective Banking Supervision”, the “Insurance Supervisory
Principles” of the IAIS, and the Joint Forum’s “Fit and Proper Principles”.  As a domestic Regulation
IATA is exempt from the Market Access provisions of GATS under Article 2 of the Annex onFinancial Services.
Questions from the European Union
Question:  What is the rationale of not allowing direct branching of foreign life insurance companies,
whereas it is allowed in general insurance?
Answer:  The prohibition on life insurance bran ching was introduced in the context of major
prudential reform which saw, among other things, the establishment of new, technically detailed
liability valuation and capital requirements, and detailed requirements in respect of the equitableallocation of company profits (Surplus) between shar eholders and policyholders.  In view of these
innovative reforms it was considered that satisfactory prudential supervision could best be achieved
where the life company is an Australian incorporated entity.
Question:  What has been the practice of the public interest test for licensing of foreign insurance
companies? How many licences have been refused in recent years?
Answer:  Insurance licences are issued by the Australian Prudential Regulation Authority (APRA), an
independent regulatory body, under Section 12 of the Insurance Act 1973 and  Section 21 of the Life
Insurance Act 1995.
Since mid-1999 all applications for insurance licence have been considered the Cross-Divisional
Licensing Committee within APRA.  This Committee recommends to executive management whetheran application should be accepted or rejected.  Since this Committee was formed, no licence
applications have been refused. Before reaching the Committee, detailed discussions are held with
applicants in order to develop workable licensing proposals.  In a few instances potential applicants
have not been able to satisfy APRA that they can meet the authorisation requirements and their draft
applications have not been presented to the Licensing Committee.
Question:  Is there any plan to open to competition third party motor insurance, which is provided
under a monopoly regime in several States?WT/TPR/M/104/Add.1
Page 100
Answer:  Under Australia’s National Competition Policy, all State and Territory Governments have
committed to review and, where appropriate, reform legislation that restricts competition.  As part ofthis process, States and Territories have reviewed compulsory third party insurance regimes.
Some Governments have introduced competition into the provision of third party insurance, and some
are still considering their review recommendations .  Where Governments decide to retain a monopoly
insurance provider, they must be satisfied that the benefits to the community from restricting
competition outweigh the associated costs.
Question from Hong Kong
Question:  Similar to banking and finance services, any foreign investor wishing to gain influence
over a registered insurance company needs the approval of the Treasurer, who can approve the
application if it is in the public interest.  Grateful if the Australian authorities could elaborate on the
equity level which foreign investors have to seek the Treasurer’s approval.  Have any applicationsbeen rejected by the Treasurer so far?
Answer:  Equity levels beyond which foreign invest ors have to seek the Treasurer's approval under
the Foreign Acquisitions and Takeovers Act of 1975 and Foreign Investment Policy are set out on the
Foreign Investment Review Board website www.firb.gov.au <http://www.firb.gov.au> .
In addition, any person wishing to exceed a 15% equity limit in, or to gain influence over a registered
insurance company would require the Treasurer's approval under the Insurance Acquisitions and
Takeovers Act 1991 (IATA). The IATA applies equally to foreign and domestic persons and protects
the public interests by ensuring that the affairs of Australian registered-insurance companies are
carried out in a prudential manner and that unsuitable persons do not gain a position of influence over
Australian registered-insurance companies.
During the recent re-authorisation period, 29 insurers either had their authority revoked or went into
run-off. Of these, 16 were foreign-owned and made this decision either: as part of a restructure theirsubsidiaries in Australia; as part of a head office decisions to cease business worldwide or in
Australia; or due to mergers of foreign parents. In addition, nine insurers have been placed on
transition plans in order to increase their capital to the higher levels required under recent legislative
changes. Three of these insurers were foreign owned.
Question from Japan
Question:  The report states that clients that are provided or recommended policies with unauthorized
foreign insurers must be informed that the insurer is not subject to the usual regulation for insurers in
Australia, and that consideration should be given to the need for further information about the
insurer’s country of incorporation and the legal framework for dispute resolution. Does the same
condition apply to the reinsurance and MAT-insurance sectors, in which Australia commits the cross-border supply?
Answer:  Yes, however it should be noted that these disclosure requirements are exempt from GATS
under the General Exemptions outlined in Article XIV Subsection (c)(i).WT/TPR/M/104/Add.1
Page 101
(vi) Communications
(a) Telecommunications
Questions from Canada
Question:  Paragraph 94 mentions that the Government of Australia has reduced its ownership of
Telstra to 51.1% and plans to sell its remaining equity at some future point.  Please indicate when this
may take place.
Answer:  The Government intends for Telstra to be  fully privatised.  However, the Government has
undertaken not to proceed with the further sale of Telstra until it is fully satisfied that arrangements
are in place to deliver adequate telecommunication services to all Australians.  An assessment of such
arrangements is currently underway, and is due for completion by November 2002.
Questions from Chinese Taipei
Question:  Chinese Taipei welcomes Australia’s deregulation in the telecommunications sector made
since 1997.  However, could Australia please provide the following: (1) the timetable for the opening
of the market to foreign investment, (2) the timetable for the privatization of Telstra, and
(3) information on whether Australia is in the process of further deregulating the restrictions on the
foreign ownership of Telstra’s equity.
Answer:  With the exception of foreign investme nt in Telstra, investment in the Australian
telecommunications sector is subject only to over sight by the Foreign Investment Review Board.
Question:  Referring to paragraph 96, investment proposals in telecommunications above the
notification thresholds are dealt with on a case-by-case basis and are approved unless judged
contrary to the “national interest”.  Chinese Ta ipei would appreciate Australia providing information
regarding its justification of this under the requirements of GATS Article VI.
Answer:  Australia's foreign investment policy is administered in a transparent and impartial manner.
It is reasonable and objective. We have a policy summary which is widely accessible and identifiesexactly what the policy is, as well as the Foreign Investment Review Board’s (FIRB) procedures. The
summary distinguishes exempt proposal types from those requiring approval and identifies our
sensitive sectors.
In terms of telecommunications, the policy clearly identifies the restrictions on foreign investment in
Telstra and is very liberal in terms of acquisitions of other businesses in the industry and theestablishment of new businesses in the industry.
Proposals in all sectors can expect to be approved unless considered contrary to the national interest.
The FIRB has recently streamlined the application process, with new easy-to-use application forms.
An online application system will also be available soon.
Question:  Could Australia please explain the reasons for its institutional setting for the
telecommunications sector into ACA, ACIF and TIO and whether or not the setting would result in
difficulties in terms of telecommunications market access.WT/TPR/M/104/Add.1
Page 102
Answer:  The Australian regime provides for:
- Access and competition regulation (by the Australian Competition and Consumer
Commission);
- Standards setting and quality of service monitoring (by the Australian
Communications Authority);
- Industry development and administration of technical and operating arrangements (by
the Australian Communications Industry Forum); and
- An independent, industry-funded consumer complaints watchdog (through the
Telecommunications Industry Ombudsman)
These agencies collectively promote the continued development of a competitive, fair, efficient and
consumer-focussed telecommunications industry and do not impede access to the Australian
telecommunications market. As an indication of this, there are currently 81 active licensed carriers inAustralia (30 June 2002 figures).
Questions from the United States
Question: Please provide details on the time frame in which Australia plans to full privatize Telstra
and whether these plans also include eliminating foreign ownership restrictions in Telstra.
Answer: The Government intends for Telstra to be  fully privatised. However, the Government has
undertaken not to proceed with any further sale of Telstra until it is fully satisfied that arrangements
are in place to deliver adequate telecommunication services to all Australians. An assessment of such
arrangements is currently underway, and is due for completion by 8 November 2002.
The current statutory limits on foreign ownership of Telstra are 35% (of the 49.9% of Telstra which is
privately held) and 5% of the privately held equity for individual or associated group foreign
investors. The Government has stated that foreign eq uity limits would continue to be in place on full
privatisation of Telstra.
Question:  Under its Reference Paper obligation, Australia is obliged to require its major supplier
(Telstra) to make its interconnection agreements publicly available, or to make available a reference
interconnection offer.  Has Australia imposed these requirements on Telstra?
Answer:  Telstra is required under Part XIC of the Trade Practices Act 1974  to supply its “declared”
services to access seekers ( Section 152AR ).  Failing agreement with an access seeker, Telstra must
supply a declared service on terms and conditions set out in an “access undertaking”2 or, where there
is no such undertaking in effect, on terms and conditions determined by the regulator ( Section 152AY ),
the Australian Competition and Consumer Commission.
The regulator has published indicative terms and conditions for key declared services in the form of
access pricing principles and an approved access code under Section 152BE .  The pricing principles
and the access code inform the market of the regulator’s indicative views on relevant terms and
conditions for interconnection, including price.
                                                     
2 An access undertaking is a written undertaking, approved by the regulator under Section 152BV ,
setting out terms and conditions upon which a carrier will comply with its access obligations.WT/TPR/M/104/Add.1
Page 103
Question:  With regard to its Reference Paper obligation, does Australia impose a time limit for
resolution of interconnection disputes between Telstra and its competitors?
Answer:  The Australian regulatory regime does not specify a timeframe for interconnection dispute
resolution.  The Australian regime is based upon a negotiate/arbitrate model which is designed to
encourage commercial negotiation of interconnection agreements.  If parties cannot reach a
commercially negotiated outcome they have recourse to arbitration by the regulator.  Although there
is an absence of a particular timeframe for these arbitrations there is an obligation on the regulator toresolve disputes as quickly as possible.  This is considered to be an effective way of balancing the
need for quality of regulatory decision making w ith the expediency of decision making desired by
parties.  In addition there are mechanisms with in the regulatory framework, such as interim
determinations, that the regulator can use to ensure that interconnection can take place even if there is
still a dispute subject to arbitration.
Question:  Since Australia has often claimed that Internet access and transport is a basic
telecommunications service, does it require Telstra, its major supplier of basic telecommunications
services, to offer competing Internet Service Providers (ISPs) cost-based interconnection, or to
publish its Internet peering arrangements with other ISPs?  If not, why not?
Answer:  No. Australia’s approach to interconnect ion is explained at Question 2 above. Internet
Service Providers have access to the same negotiating processes and arbitral mechanisms in the event
of an interconnection dispute.  Accordingly, the Australian interconnection regime treats all carriage
service providers on the same terms.
(b) Broadcasting and audiovisual
Question from Japan
Question:  For the purpose of upholding identity, character and the cultural diversity of Australia,
there exists a transmission quota for Australian programmes and advertisements, as well asgovernment support for the Australian film industr y.  Please provide information on the criteria
required to be regarded as Australian programmes, advertisements or films which can uphold the
Australian identity, character and cultural diversity.
Answer:  Under the Australian content standard (ACS) that applies to free-to-air commercial
television licensees, an Australian program must meet the ‘creative elements test’ set out in Part 3 ofthe ACS.  It is based on the premise that if Australians have creative control, the programs they make
will be Australian.
In summary, the test requires Australians in the following roles:
- Producer or producers (additional non-Australian co-producers and executive
producers permitted);
- Either writer or director;
- At least 50 per cent of the leading actors (including voice actors and on-screen
presenters); and
- 75 per cent of major supporting cast in a drama program.WT/TPR/M/104/Add.1
Page 104
Under the ACS, all programs other than Australian news, current affairs and sports programs filmed
overseas must be produced and post-produced in Australia.
The Australian content in Advertis ing Standard similarly requires Australian creative control through
the following positions or activities:
- the producer of the advertisement (other than a producer employed by the advertising
agency);
- the principal director;- the director of photography;
- the writers of the script and storyboards;
- the visual editing;
- the production of the sound track, including recording, sound editing and mixing;
- the role of featured talent appearing in the advertisement;- all performance, including voice over, on the sound track; and
- the music used in the advertisement.
In order to be consistent with the Protocol on Trade in Services to the Australia New Zealand Closer
Economic Relations Trade Agreement, the ACS and the Advertising standard recognise New Zealand
programs and Australian/New Zealand programs equa lly with Australian programs for the purposes of
compliance.
Questions from Chinese Taipei
Question:  New Zealand programmes and Australian/New Zealand programmes are counted as
Australian in the local-content requirements of the broadcasting services sector.  What are the
identification criteria in this regard?  If companies of other countries co-produce programmes with
Australian companies, would these programmes be  counted as foreign?  What qualifies as an
Australian/New Zealand programme?
Answer:  In order to be consistent with the Protocol on Trade in Services to the Australia New
Zealand Closer Economic Relations Trade Agreement, the Australian content standard (ACS) that
applies to free-to-air commercial television licensees, and the Australian content in Advertising
standard, recognise New Zealand programs and Australian/New Zealand programs equally with
Australian programs for the purposes of compliance.
Under the ACS, an Australian program must meet the ‘creative elements test’ set out in Part 3 of the
ACS.  It is based on the premise that if Australians have creative control, the programs they make will
be Australian.
In summary, the test requires Australians in the following roles:
- Producer or producers (additional non-Australian co-producers and executive
producers permitted);WT/TPR/M/104/Add.1
Page 105
- Either writer or director;
- At least 50 per cent of the leading actors (including voice actors and on-screen
presenters); and
- 75 per cent of major supporting cast in a drama program.
Under the ACS, all programs other than Australian news, current affairs and sports programs filmed
overseas must be produced and post-produced in Australia.
Co-productions provide a means for Australian producers to join with producers in other countries to
make films and high budget television productions that can access both nations’ quotas and
production support mechanisms.  The Commonwealth Government and the Australian Film
Commission (acting as an ‘authority’ of the Government) have entered into co-productions treaties or
arrangements with the United Kingdom, Canada, Italy, France, Israel, Northern Ireland, Germany, and
New Zealand.  Television drama produced under unof ficial co-production arrangements must meet
the creative elements test to qualify as Australian content for content quota purposes.
Question:  According to Article II of GATS, Annex of Article II Exemptions, the exemption period for
MFNs should not last in principle for more than 10 years.  For how long does Australia intend to list
audiovisual services as an exemption?  Will the exemption period be shortened?  Under what
conditions will Australia maintain audiovisual serv ices on the list of exemptions?  In the current
round of negotiations, will Australia consider opening up the audiovisual market?
Answer:  The MFN exemption that Australia holds in audiovisual services relate to international film
co-productions and measures taken to respond to unreasonable actions by another Member with an
MFN exemption.
In response to Chinese Taipei’s questions concerning Australia’s intentions to liberalise the sector, it
should be noted that Australia’s audiovisual sector is critical to the achievement of our key social and
cultural objectives.  We therefore approach negotiations to liberalise the audiovisual sector with somedegree of caution.
Question:  The national broadcasters in Australia are required to televise live certain designated
events.  Apart from sporting events, what other kinds of programmes are included under “designated
events”?  For what purposes does Australia require the national broadcasters to televise certain
designated events live?  Do the programmes of the live designated events have to be Australian?
Answer:  Anti-hoarding rules are contained in Part 10A of the Broadcasting Services Act 1992  (BSA).
The main purpose of these provisions is to maximise the opportunities for full and live free-to-air
coverage of major events, particularly sporting events, by encouraging commercial television
broadcasting licensees and national broadcasters to use, rather than hoard, any rights acquired by them
to live television coverage of such events.
The anti-hoarding provisions require commercial broadcasters with live broadcast rights to a
designated event or series of events to offer to the ABC and/or SBS (for a nominal payment), within a
specified time, any rights they do not propose to use by televising those events live themselves.
Where one national broadcaster does not intend to fully televise a designated event live, the offer of
excess rights must be made to the other national broadcaster.  Similarly, the national broadcasters arerequired to offer such unused rights to each other.WT/TPR/M/104/Add.1
Page 106
The list of designated events comprises domestic and international sporting events in 11 categories
including cricket, tennis, golf, motor sports and the football codes.  There are currently no non-sporting events in the list of designated events.
Question:  Could Australia please explain whether cable television broadcasters must carry the
programmes of the free-to-air television broadcasters.  If so, are they required to bear the costs, and
on what basis?
Answer:  Australia does not require cable television broadcasters to carry the programs of the free-to-
air television broadcasters.
Question:  Australia, on the basis of preserving its cultural heritage, imposes restrictions on foreign-
produced TV commercials, requiring that at least 80% of advertising time broadcast each year by
commercial television licensees between the hours of 6am and midnight must use advertisements
produced in Australia.  Furthermore, Australia has not set the broadcasting of TV advertisingservices in the schedule of Specific Commitments on Services.  Chinese Taipei would appreciate
receiving Australia’s explanation of the relationship between the production of TV commercials and
the preservation of its cultural heritage.  It would also like to know whether Australia has any plan to
open up the services market related to the broadcasting of TV advertising and to cancel the
requirements for Australian content in the programmes?  And if so, is there a timetable?
Answer:  Audiovisual services, and particularly television, are the most immediate and pervasive
media for creative expression and mass communication.  They play an integral role in developing and
reflecting a sense of national and cultural identity within Australia's multicultural society.  They
provide opportunities for almost universal access by Australians to their own experiences and
narratives.
The legitimacy of such cultural considerations is recognised by many Members.
It is in the national interest to ensure that Australians have access to their own images and stories in
the cinema and on television, whether through programs or commercials.  Therefore, there are no
plans to further open up the services market relating to the broadcasting of television advertising, or to
cancel the requirement for Australian content in programming.
(vii) Transport
Question from Norway
Question:  Shipping is by far the most important sector for Norway in the bilateral trade with
Australia. Norway therefore appreciates the Austra lian efforts and support for inclusion of maritime
transport in the WTO/GATS in a proper way, as well as the substantial Australian commitments in
this sector in the schedule under the GATS agreement.
We have, however, information indicating that the Australia-New Zealand trade has been subject to
some trade union measures, which restricts the competition to Australian and New Zealand vessels. If
such measures prevail they would undermine the commitments made by Australia under the GATS
agreement for maritime transport. It would therefore be of interest for us to know if maritime
transport between Australia and New Zealand is without restrictions. More specifically, would
Australian authorities have the adequate legal possibility to remedy such a situation in order toprovide for an open market situation in this particular trade?WT/TPR/M/104/Add.1
Page 107
Answer:  In the past an unofficial accord exis ted between maritime unions in Australia and New
Zealand that was aimed at reserving trans-Tasman cargoes to ships manned by Australian or NewZealand crews.  That accord, which was a purely inter-trade union arrangement, has since completely
broken down. This was confirmed in 1998 after the Minister then responsible for maritime transport
referred the matter investigation by the Australian Competition and Consumer Commission.
Consequently, there are no restrictions of this nature in maritime transport between Australia and New
Zealand.
Australia is confident that the Trade Practices Act 1974  provides adequate remedies in the event of
any attempt to create another such agreement.
(vii) Transport
(a) Shipping
Question from Chinese Taipei
Question:  Referring to paragraph 109, coastal operations are carried out through a system of
licences and permits that are available to both Australian and international operations.  Furthermore,
licences are not restricted to Australian registered, owned or crewed vessels and may be issued to a
ship of any flag, regardless of crew nationality or ow nership.  Could Australia please explain why the
cabotage is not included in Australia’s schedule of the Maritime Transport Service Sector of theGATS commitments.  Chinese Taipei would be grateful if Australia would provide details of the
criteria applying to ships with foreign flags as regards their carrying out coastal operations.
Answer:  Strictly speaking, Australia does not have a "cabotage" regime as such. Foreign flag ships
may engage in the Australian coasting trade provided they obtain either a license or a permit.
A foreign flag ship may obtain a coasting trade licence by making application to the Maritime
Regulation section of the Department of Transport and Regional Services and paying the requisite fee
(currently A$22).  Licenses are issued subject to tw o conditions: 1 that the crews are paid Australian
rates of pay while the ships are engaging in the Australian coasting trade; and 2 that the crew has
access to any library provided for passengers unless there is a separate library provided for the crew.
It is an offence (penalty A$5,000) if the master, owne r and agent is receiving, directly or indirectly,
any subsidy or bonus from the Government of a coun try other than Australia (or will receive such a
subsidy or bonus, or has in the 12 months immedi ately preceding the ship engaging in the coasting
trade).
A foreign flag ship may apply for a coasting trade license covering a single voyage or for a period of
time.  A permit may be granted only if there is no licensed ship available for the cargo or if the service
provided by licensed ships is inadequate, and if the issue of a permit is in the public interest.  To
ensure only ships of good quality obtain permits, applicants for permits for tankers or bulk carriersmust supply a ship report that is less than 6 months old. Permits may be issued subject to certain
conditions.  Single Voyage Permits (the majority of permits) are issued with a single condition: that
within 14 days of sailing, the permit holder should complete a Statement of Cargo Actually Carried,
and return it to the Department of Transport and Regional Services.  Continuing Voyage Permits,
issued for up to 6 months for specified ports, may contain a variety of other conditions.WT/TPR/M/104/Add.1
Page 108
Question from Japan
Question:  According to Australia’s schedule of commitments, Part X of the Trade Practice Act 1974
allows Australian flag operators to apply to the Trade Practices Commission to examine whether
conference members and non-conference operators with substantial market power are hindering
Australian flag shipping operators from engaging effi ciently in the provision of outward liner cargo
services.  Japan would like to know how many exami nations have been held so far, as well as the
results of respective examinations.
Answer:  There have been no cases of the Australian Competition and Consumer Commission
(formerly the Trade Practices Commission) enquiring into whether parties to a conference agreement
or a non-conference carrier with substantial market power are hindering Australian flag shipping
operators from engaging efficiently in the provision of outwards liner cargo shipping services to an
extent that is reasonable.
Question from the European Union
Question:  The report mentions that foreign investment is unrestricted up to 49% for companies
operating of airports services. Does this also apply to services provided in airports as well - such as
groundhandling? Has this option been used?
Answer:  There are no sector-specific foreign investment restrictions applying to ground handling in
airports."
(b) Air transport
Question from the United States
Question:  We note that the portions of Para 111 of the Secretariat’s report that address Australia’s
negotiation of open skies agreements and the United States could be made more precise.  First, the
United States and Australia signed a cargo-only skies agreement on Dec. 14, 1999.  We would like to
make note of this fact for the record.
Another portion of Para 111 says, “…Australia intends to negotiate other open skies arrangements
when this is in the national interest; discussions are being held with Singapore, the United Kingdom,
and the United States”.  We would like to note for the record that these negotiations are not currently
active.
Answer:  Negotiations with these countries are active.
(viii) E-commerce
Question from Canada
Question:  According to Paragraph 116, Australia considers that multilateral trade rules must
encourage e-commerce development, while discouraging “burdensome, trade-restrictive regulation
and anti-competitive practices”. Please clarify how Australia plans to approach these objectives in itsparticipation in the WTO Work Programme on Electronic Commerce.
Answer:  As with other aspects of the Work Program on Electronic Commerce, on the whole, the
challenges posed for competition policy are simply accentuated forms of the general competitionWT/TPR/M/104/Add.1
Page 109
issues faced by WTO members. Australia looks forward to continuing to participate actively in the
Work Program on Electronic Commerce and also the Working Party on Trade and Competition.
__________