Australia WT/TPR/S/104
Page 27
III. TRADE POLICIES AND PRACTICES BY MEASURE
(1) INTRODUCTION
1. Since its previous Trade Policy Review in 1998, Australia has continued to reduce trade
restrictions and distortions with a view to increasing the competitiveness of domestic firms and
reducing anti-export bias.  Openness to trade and economic growth are considered to be strongly
linked.1
2. The tariff is Australia's main trade policy instrument, albeit a minor source of tax revenue.
The average applied MFN tariff is currently 4.3%, down from 5.6% in 1997/98, with further unilateral
reductions expected by 2005.  Whereas the average applied MFN tariff for industrial products is
4.7%, that for agricultural imports is in the order of 1.2%.  About 86% of tariff rates are currently in
the range zero to 5%.  In line with long-standing sectoral support, the highest tariffs apply mainly totextiles and clothing and to passenger motor vehicles and related items.  Some 96.1% of tariff lines
are bound.  This imparts a high degree of predictability to the tariff.  However, the simple average of
bound MFN rates (10.5%) considerably exceeds the average applied MFN rate, providing the
authorities with considerable scope for increasing applied tariffs within bindings.  Over 99% of tariff
rates are ad valorem , a feature that contributes to the transparency of the tariff.  The structure of the
tariff has been simplified considerably, and now involves ten rates (seven ad valorem,  one specific,
one compound, and one alternate).  The tariff also embodies a degree of escalation.  Although tariff
quotas have remained in place for five cheese items and for non-manufactured tobacco, they are
apparently applied in a flexible/liberal manner.  Nevertheless, the tariff continues to be a potential
obstacle to a more efficient allocation of domestic resources.  Computerized customs clearance has
facilitated virtually all imports and exports.
3. 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.  Efforts have been made to align certain compulsory standards to
international standards as well as to improve coordination and international cooperation (WTO
notification, MRAs, APEC) in this regard.  Changes have been introduced to Australia's SPS and
quarantine requirements to cover, inter alia,  genetically modified organisms and biotechnology;  a
formal import-risk-analysis process has also been introduced.
4. Following institutional and procedural changes, recourse to anti-dumping and countervailing
action has dropped, while no safeguard measures were adopted during the period under review.
5. Australia has remained a non-signatory of the WTO Government Procurement Agreement
(GPA) and has continued to use government procurement as a major instrument of economic policyaimed at fostering industrial development (e.g. in the fields of information and telecommunications
technology);  preference margins to local suppliers, compulsory sourcing from small and medium-
sized enterprises (SMEs) and local-content requirements have been maintained.  Local content has
also been a prior requirement for export finance and broadcasting.
6. 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.  State involvement in the economy has been maintained where benefits can be captured
from promoting and/or regulating trade in certain agricultural goods (dairy products, grain, wheat,
barley, rice, horticultural products, dried fruit, sugar, wool).  Export assistance, consisting of direct
grants (through Export Market Development Grants, Supermarket to Asia Strategy) and tax
                                                     
1 Australian Department of Foreign Affairs and Trade (undated b).WT/TPR/S/104 Trade Policy Review
Page 28
concessions (Tradex, Passenger Motor Vehicle Export Facilitation Scheme), has been maintained and
revised.  In addition to local content, export finance is conditional upon national interest and
environmental protection criteria;  however, export credit terms seem to be in line with OECD
guidelines.  Free-trade zone incentives are tailor-made for each project and may, inter alia,  include
establishment/relocation subsidies;  it would appear that the manufacture-in-bond scheme has not yet
been widely used.
7. Support for production and trade has been provided through tax and non-tax incentives with
increased emphasis on R&D spending.  Tax reforms seem to have rationalized and simplified the
indirect tax structure, rendering it more neutral, especially with respect to international trade.  The
special Luxury Car Tax, however, which seems to be biased against imports, remains in place.  As
regards direct taxation, special deductions still ex ist for companies involved  in mineral exploration
and development.  Non-tax assistance has been strengthened in certain broad areas (notably for export
promotion, investment, and R&D) and maintained for several specific activities (printing,
pharmaceuticals, textiles, clothing, footwear, passenger motor vehicles, shipbuilding, information and
telecommunications technology).  Low energy prices to producers have been ensured through state
involvement in electricity, and tax exemptions for several categories of diesel fuel users.
8. Australia has sought to strengthen protection of intellectual property rights by expanding its
international commitments;  the possibility to effe ct parallel imports have been further liberalized.
9. Australia's competition policy framework has also been updated and put into effect so as to
ensure that the regulatory framework does not restri ct competition, and to reflect the introduction of
"competitive neutrality" principles for the majority of Government Business Enterprises.
10. Environmental concerns have been addressed by the introduction/enforcement of new
legislation (e.g. Environment Protection and Biodiversity Conservation Act), national environment-protection measures and a product stewardship (oil recycling) scheme.
(2) M
EASURES DIRECTLY AFFECTING IMPORTS
(i) Registration and documentation requirements
11. Customs clearance may be undertaken either by the merchandise owner or a customs broker,
the latter must register with and be licensed by the Australian Customs Service.2
12. Since 1998, minimum documentation requirements have remained unchanged;  they include
an airway bill or bill of lading, invoices, and any other papers (including packing lists, insurance
documents, etc.) relating to the shipment.  Imports subject to quarantine restrictions require special
certificates, issued by the authorities in the country of export, confirming that the goods meet
Australian regulatory requirements.  Import permits are also required for certain goods subject tocontrols or restrictions (sections (v), (ix)(b), etc. below).
13. Since 1997 , approximately 98% of all imports have been electronically controlled with self-
assessment for duty being the norm;  the Customs electronic systems have provided an almost
instantaneous service.
3  Virtually all customs brokers are connected to the Customs electronic systems
                                                     
2 Australian Customs Service (2000).
3 These systems are the Customs Online Method of Preparing from Invoices Lodgeable
Entries (COMPILE) and Electronic Data Interchange for Input of Customs Entries (EDIFICE).  See AustralianCustoms Service online information.  Available at:  http://www.customs.gov.au/bizlink/imports/general/index.htm#11 [18 May 2001].Australia WT/TPR/S/104
Page 29
while individual importers are also able to connect via Internet.  Importers are to switch to a new
integrated cargo system in March 2004.4
14. A duty deferral facility has been operated under a Customs licensed warehouse (underbond)
system;  goods may stored until the duty is pai d, and, upon Customs approval, moved between bonded
premises.5
(ii) Tariffs
(a) General features
15. Since its previous Review in 1998, Australia has adjusted its tariff in accordance with the
scheduled implementation of its WTO commitments and with its domestic policy imperatives.
Nonetheless, from the summary indicators reported in Table III.1, its level and structure do not appear
to have undergone fundamental change.6
16. The tariff has remained a minor  source of tax revenue, accounting for 2.2% (2000/01) of total
tax revenues (section (4)(i), Table III.6);  nonetheless, it is a key instrument of trade policy.  Most
tariff lines (86%) are subject to zero or 5% ad valorem  duties with the exception of only the 0.26% of
items subject to specific, compound or alternate duties (section (d));  the tariff is a relatively simple
instrument, containing 5,766 tariff lines, 1.8% less than in 1998 and ten rates (seven  ad valorem ,
one specific, one compound and one alternate).  Bound tariff rates tend to be substantially higher than
applied rates and the gap has widened since 1998, thus providing increased scope for the authorities to
raise applied MFN tariff rates.
17. Import duty calculation remains based on the free-on-board (f.o.b.) value, thus the actual
impost of the tariff has been lower than in countrie s using cost, insurance, and freight (c.i.f.) value.7
Customs duties, indirect taxes, and other charges must be settled with the Australian Customs Service
(ACS) prior the goods being released from customs custody.  The Australian Taxation Officeadministers a deferred Goods and Services Tax (GST) sc heme that allows authorized entities to defer
their GST liability on imported goods until the twenty-first day of the following month.  The
Department of Industry, Tourism and Resources has regulatory powers over tariff policy matters,
while the ACS is an enforcement agency.  Since 1996, Australia has submitted its customs tariff and
trade data regularly to the Integrated Data Base of the WTO;  similar action has been taken withrespect to the APEC tariff database project.
8
                                                     
4 The Australian Financial Review,  30 April 2002.
5 Australian Customs Service (2000).
6 All tariff-related estimates in the charts and tables of this report reflect import duties contained in
Australia's customs tariff submitted to the WTO by year 2001;  in the case of mixed/compound duties, only the
ad valorem  component is used.  No specific rates and occasional/temporary tariff increases or reductions are
taken into consideration in these calculations (section (d) below).  In the case of tariff quotas, the out-of-quota
rates are used to calculate tariff averages.  The estimates of the tariff analysis prepared by the WTO Secretariat
may be slightly different from those of the authorities because its calculations for final bound rates are based onthe 2001/2002 eight-digit customs tariff schedule (delivered in HS96 nomenclature);  the authorities indicatedthat their calculations are based on "Australia's tariff concessions (pre-HS2002 nomenclature) which are set out
in [their] CTS submission".
7 APEC (2000).
8 Australia attaches great importance to the provision of data to the IDB (WTO document G/MA/M/16,
9 March 1999).  APEC Secretariat online information.  Available at:http://www.apecsec.org.sg/ [21 May 2001].WT/TPR/S/104 Trade Policy Review
Page 30
Table III.1
Tariff structure in Australia, 1997-02
(Per cent)
Indicators 1997/98 2001/02 U.R.a
1.   Bound tariff lines (per cent of tariff lines) 96.1 96.1 96.1
2.   Duty-free tariff lines (per cent of tariff lines) 40.5 48.2 17.6
3.   Non- ad valorem  tariffs (per cent of tariff lines) 0.3 0.3 0.3
4.   Tariffs with no ad valorem  equivalent 0.1 0.3 0.3
5.   Simple average bound tariff rate .. 10.5 10.5
Agricultural products (HS 01-24) .. 3.4 3.4
Industrial products (HS 25-97) .. 11.7 11.7
6.   Simple average applied tariff rate 5.6 4.3 ..
Agricultural products (HS 01-24)b1.2 1.2..
Industrial products (HS 25-97) 6.3 4.7..
7.   Domestic tariff "peaks"c10.6 11.4 5.8
8.   International tariff "peaks"d10.6 4.1 13.9
9.   Overall standard deviation (SD) of tariff rates 8.1 6.0 11.6
10. Coefficient of variation (CV) of tariff rates 1.4 1.4 1.1
.. Not available.
a Based on the 2001/2002 eight-digit customs tariff schedule.
b Under the definition used in the WTO Agreement on Agriculture, the simple applied tariff average on agricultural imports is
1.4% and 1.3% in 1997/98 and 2001/02, respectively.
c Domestic tariff "peaks" are defined as those exceeding three times the overall simple average MFN rate.
d International tariff "peaks" are defined as those exceeding 15%.
Note: Excluding specific rates and including the ad valorem  part of alternate and compound rates.
Source: WTO Secretariat calculations, based on data provided by the Australian authorities.
(b) MFN tariff bindings
18. Australia's commitments on WTO tariff bindings were fully implemented as of
1 January 2000.  Thus Australia's simple average bound tariff rate has remained unchanged, since its
previous Review, at 10.5%.9  Currently, 96.1% of all tariff lines (covering 99% of import value)10 are
bound as a consequence of the Uruguay Round negotiations and the 1997 Information Technology
Agreement (ITA)11;  bindings cover all agricultural tariff lines (WTO agriculture definition), and
95.9% of manufactured products.12  With a few exceptions, bound rates range from zero to 29% for
agriculture, and from zero to 55% for manufactured products.
                                                     
9 The implementation of binding commitments, initially scheduled to take place in equal instalments
between 1 January 1995 and the year 2000, was accelerated  by one year for 2,800 tariff lines as part of
Australia's APEC Individual Action Plan (WTO, 1998;  and APEC, 2000).
10 APEC (2000).
11 The ITA, which was agreed at the Singapore Ministerial Conference, has 40 participants
(February 2001, counting European Communities as one) an d provides for the elimination of customs duties and
other duties and charges on computers, telecom equi pment, semiconductors, semiconductor manufacturing
equipment, software, and scientific instruments, on an MFN basis (WTO document G/IT/1/Rev.17,
16 February 2001).  The ITA does not cover consumer electronic goods.  In 1999, Australia was not among the
leading exporters and importers of IT goods (WTO, 2000).
12 The 204 eight-digit HS96 unbound lines include yarns, textiles, clothing, leather, rubber products,
tools/articles of base metals, products of iron and steel, ceramic products, glassware, machinery, transportequipment, photographic equipment and ot her electrical components and equipment.Australia WT/TPR/S/104
Page 31
19. Between July 1996  and April 2000 Australia's binding commitments were waived from the
obligations under Article II of GATT 1994, to allow for the implementation of the recommended
amendments on 1 January 1996 to the Harmonized System nomenclature and, subsequently, to
undertake Article XXVIII negotiations.  The last reservation on Australia's proposed Schedule of
Concessions incorporating these amendments was lifted on 22 December 1999.13
(c) Duty-free-items
20. At present, 48.2% of Australia's tariff lines are duty free, up from 40.5% in 1997/98
(Chart III.1, Table III.1).
(d) Specific, compound, and alternate duties
21. No changes have been made in the product coverage and level of specific, alternate, and
compound duties on 15 HS96 eight-digit items  (0.3% of all tariff lines).  Specific duties are levied on
five items (cheeses) at $A 1.220/kg., two lines (grapefruit juice, single citrus fruit juices) attractalternate duties at 5% or $A 0.45/kg. (whichever  is lower), and eight lines (second-hand passenger
motor vehicles) are subject to a compound rate of 15% plus $A 12,000 per unit.
14  Ad valorem
                                                     
13 WTO document WT/L/338, 8 November 1999.
14 Used passenger motor vehicles have an ad valorem  rate as well as a fixed rate component of
$A 12,000 per unit.  However, according to the authorities, this fixed rate component is rarely applied because itrelates only to vehicles imported without the permit issued by the Department of Transport and Regional
05001,0001,5002,0002,5003,000
Duty free >0- 5 >5-10 >10-15 >15-20 >20-25 >25-30 >30-35
Not applicable.
Calculations exclude specific rates and include the ad valorem  component of alternate and compound rates.  
WTO Secretariat calculations, based on data provided b y the Australian authorities.MFN 1997/98
MFN 2001/02Number of tariff linesChart III.1                                                
Distribution of MFN tariff rates, 1997/98 and 2001/02
Tariff rates
n.a.
Note:
Sourc e:WT/TPR/S/104 Trade Policy Review
Page 32
equivalents (AVEs) for out-of quota specific duties on the five cheese items ranged from 26%
(1999/00) to 52% (2000/01);  no AVEs for fruit juice were available from the authorities.15
(e) Tariff quotas
22. Under WTO market-access commitments, since 1995 Australia has tariff quotas commitments
covering cheese (fresh cheese and curd, grated or powdered cheese, non-grated or powdered
processed cheese, other blue-veined cheese), and unmanufactured tobacco (out-of-quota rates neverimplemented (i.e. in-quota rates applied only));  these items represent 0.1% of all tariff lines.
16  I n
2000, the out-of-quota rate for cheese (above 11,500 tonnes) was reduced from $A 1,294 to $A 1,220
per tonne while the in-quota rate has been kept at $A 96 per tonne.  Since 1995, quota allocation has
been based on the actual usage of quota over the previous 23 months (excluding quota transfers);
quota may be accorded upon submission of application to the Australian Customs Service.17  N e w
importers are able to obtain an allocation only on transfer from an existing holder of a tariff quota
share.18  Between 1997/98 and 1999/00 tariff quota utilization increased from 79.2% to 83.2% as a
result of domestic demand and exchange rate conditions19;  the entire quota has never been utilized.
Future cheese import arrangements are to be considered in the context of the WTO negotiations on
Agriculture.
23. Preferential cheese imports from New Zealand and the South Pacific Forum island countries
have not been counted against the WTO tariff quota commitment.
(f) Applied MFN tariffs
24. Since its previous Review, Australia has introduced changes to its tariff in accordance with
the scheduled implementation of its binding commitments (section (b) above) and its domestic policy
considerations.  Between 1997/98 and 2001/02 the overall simple average applied MFN tariff rate fell
from 5.6% to 4.3%.20
25. As of 1 January 2005, Australia's applied tariffs are to be reduced for the following items:
passenger motor vehicles, components and replacement parts (from 15% to 10%);  apparel and certain
finished textiles (from 25% to 17.5%);  cotton sheeting, woven fabrics, carpets and footwear
from (15% to 10%);  and sleeping bags, table linen, tea towels and footwear parts (from 10% to
7.5%).21
                                                                                                                                                                    
Services.  The authorities indicated that the $A 12,000 charge was not levied in the period 1999-01.  For the
purposes of the tariff analysis, only the ad valorem  element of the tariff on these eight lines has been included.
15 AVEs are computed as the amount of customs duty collected as a percentage of total imports of the
items concerned.
16 Part I-B, Schedule I – Australia, 15 April 1994;  and APEC (2000).
17 Australian Customs Notice No.2000/31 [Online], 12 July 2000.  Available at:
http://www.customs.gov.au/notices/acn00/acn0031.htm [18 May 2001].
18 European Commission (undated).
19 WTO documents G/AG/N/AUS/23, 4 March 1999, G/AG/N/AUS/26, 3 March 2000, and
G/AG/N/AUS/35, 14 March 2001.
20 During this period tariffs on a large number of items were either lowered (certain vegetables,
passenger motor vehicles and parts, apparel and certain finished textiles, cotton sheets, woven fabrics, carpets,
sleeping bags, table linen, tea towels, footwear, f ootwear parts, carpets) or suppressed (ITA-related
telecommunication and information equipment, medical and scientific equipment, steel tinplate, aluminiumcansheet and 268 tariff lines subject to nuisance tariffs (i.e. tariffs of not more than 5% on items for which thereis no domestic production)) (APEC, 2000).
21 APEC (2000).Australia WT/TPR/S/104
Page 33
26. Despite their low and relatively uniform level, tariffs seemingly continue to distort producer
and consumer choice and reduce the international competitiveness of a range of Australian
producers.22  The interaction of the tariffs and a complex set of concessional duty arrangements causes
significant monitoring and compliance costs for business.  According to the Productivity Commission,
further tariff reductions would remove these various disadvantages and be of some small benefit to the
community as a whole.  In particular it sees advantages in the removal of tariffs on certain items andassociated concessional arrangements (section (2)(ii)( i)) no later than 1 January 2003.  Nevertheless,
reduced tariff assistance could involve adjustment costs which, whilst potentially significant for some
individuals and firms, would be slight overall and much less than those stemming from other sources
of change (e.g., technological advances and exchange rate changes).  Tariff reductions could weaken
the price advantage of certain goods benefiting from preferential tariff treatment in the Australianmarket (section (j) and Chapter II).
27. In contrast to most other OECD countries, many of Australia's bound rates are considerably
higher than the applied duties, thus imparting a degree of uncertainty to its tariff.  The current gap of
6.2 percentage points between the average bound and applied MFN tariff rates provides considerable
scope for the authorities to raise applied rates within bindings, but this does not appear to havehappened during the period under review.  Indeed, th e widening of this gap since 1997/98, despite the
reduction in bound rates, is the result of even greater unilateral reductions in applied rates;  applied
rates have been increased in very few, if any, instances.  The difference between average applied and
bound rates in 2001/02 was much higher for industrial products than for agricultural
products (Chart III.2).  The planned reduction of applied MFN tariff rates for certain items by 2005
will increase this gap.
28. The average rate of customs duty collected on total imports dropped to 3.4% in 1999/00 and
then rose again to about 4% (2000/01 and 2001/02) (Chart III.3).  This is lower than the 1997/98 rate
of 4.1% and the average applied MFN rate.  The gap between the average applied MFN rate and the
collected duty rate can be explained, inter alia , by extensive duty concessions/exemptions (section ( i))
and, to a lesser extent, by trade preferences (section  (j)), which mitigate the burden of tariffs on
certain items and on imports of products from certain countries.
(g) MFN tariff dispersion
29. The potential efficiency losses associated with the customs tariff depend not just on the
average of applied MFN tariff rates, but also on the dispersion of those rates across products.  Judging
from the four summary indicators (7-10) of tariff dispersion reported in Table III.1 as well as in
Chart III.1, the dispersion in applied MFN tariff rates has changed since 1997/98 as a result ofreduction of the maximum ad valorem  rate (from 34% to 25%) as well as a cut in the number of
different ad valorem  rates (from 17 to 7), thus leading to a higher concentration (86% of tariff lines
between zero and 5% rates) in lower rates (e.g., zero, 10%, 15%).  In 2001/02, imports of 237 eight-
digit HS96 items  bear the highest ad valorem  tariff of 25%, and 413 items (or 421 items, including
those with an ad valorem  component of compound rates) are subject to the second highest rate of
15%;  both of these rates affect mainly yarns, fabrics, textiles, clothing, garments and clothing
accessories.  Certain parts and accessories of passenger motor vehicles (two eight-digit HS96 items)
are subject to the third highest rate of 13%.
                                                     
22 Productivity Commission (2000b).WT/TPR/S/104 Trade Policy Review
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(h) MFN tariff escalation
30. Changes in the customs tariff have had little impact on the pattern of tariff escalation since
1997/98 (Chart III.4).  Exceptions involved wood and furniture and chemicals industries, which werethe object of less pronounced escalation;  for these industries, in the past, the domestic production of
raw materials and inputs or semi-processed items received more protection than subsequent
production stages.
(i) Duty concessions/exemptions
31. During the period under review, Australia's schemes for the concessional entry of imports
have been strengthened.  At present, imports eligible for duty (and Goods and Services Tax
(section (4)(i)(a)) reductions or exemptions include:0510152025
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21Chart III.2
Average applied MFN and final bound tariff rates, by HS section, 1997/98 and 2001/02
Calculations exclude specific duties and include the ad valorem component of alternate and compound rates.   
Sections 7, 8, 11, 12, 13, 15, 16, 17, 18 and 20 are not fully bound.
WTO Secretariat calculations, based on data provided by the authorities of Australia.Note:
Source : Average applied MFN 
1997/98  (5.6% )
01   Live animals & prod.   
02   Vegetable products
03   Fats & oils      04   Prepared food, etc.
05   Mineral products
06   Chemicals & products07   Plastic & rubber
08   Hides & skins
09   Wood & articles10   Pulp, paper, etc.
11   T extiles & articles
12   Footwear, headgear13   Articles of stones
14   Precious stones, etc.
15   Base metals and prod.16   Machinery
17   T ransport equipment
18   Precision instrument19   Arms & ammunition
20   Miscellaneous manuf.
21   Works of art, etc.Average applied MFN 
2001/02  (4.3% )MFN 1997/98
MFN 2001/02 Per cent
Av erage bound
 (10.5% )BoundAustralia WT/TPR/S/104
Page 35
- business inputs (minimum 3% duty to be paid) and consumption goods (duty-free)
that do not have locally produced substitutes (Tariff Concession Scheme (TCS))
(since 1992)23;
- items under the Project/Policy/By-Law Scheme entering for reasons such as treaty
obligations, scientific interests, and social or industrial policy purposes (since 1998)
(Table AIV.5);
- production- and investment-related goods that do not have locally produced
substitutes used by the textiles, clothing  and footwear (TCF) industry (since 1996)
and passenger motor vehicles (PMV) industry (from 1 January 2001 to
31 December 2005) (import duty credits based on production or investment value or
export value) (sections (3)(iv) and (4)(ii), Chapter IV)24;  and
- goods that are processed or warehoused prior to export (Tradex) (exemption from
customs duties and goods and services tax (except excise)) (since
June 2000) (section (3)(iv), Table AIV.5).25
                                                     
23 Food, clothing, footwear, and passenger motor vehicles are ineligible for TCS treatment
(Productivity Commission, 2000b).
24 Import duty credits are a reward for investment in production facilities in domestic industry and for
expenditure on R&D.
25 Tradex replaced the Tariff Export Concession (TEXCO) scheme and, partially, the Duty Drawback
scheme (Productivity Commission, 2000d).  The scheme removed the TEXCO requirement that imported goodsmust undergo industrial processing for export, adopted a self-assessment system for claims to improve access tothe scheme, reduced compliance costs for users, and removed the need for duty drawback.3.03.54.04.55.05.56.0
1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02Chart III.3                                      
Share of customs duties collection in total import value and indirect taxes on international 
trade, 1995-02
Per cent
Share of custom duties to total import valueShare of custom duties to total indirect tax revenue
Estimates.
Data provided by the Australian authorities.a        
   
Source :WT/TPR/S/104 Trade Policy Review
Page 36
02468101214161820
Food,
beverages
and tobaccoTextiles and
leatherWood and
furniturePaper,
printing and
publishing Chemicals Non-metallic
mineral
products Basic metal Fabricated
metal
products and
machineryOtherChart III.4
Tariff escalation b y 2-di git ISIC industr y, 1997/98 and 2001/02
02468101214161820
Food,
beverages
and tobaccoTextiles and
leatherWood and
furniturePaper,
printing and
publishingChemicals Non-metallic
mineral
products Basic metal Fabricated
metal
products and
machineryOtherAverage applied rate in manufacturing
(6.0%)
Not applicable.
Calculations exclude specific rates and include the ad valorem component of alternate and compound rates.
WTO Secretariat calculations, based on data provided by the Australian authorities.n.a.
Note:
Source :Per cent
First sta ge of processin g Fully processed Semi-processedPer cent
Average applied rate in manufacturing
(4.6%)1997/98
2001/02Australia WT/TPR/S/104
Page 37
32. Between 1997/98 and 2000/01, the total amount of forgone customs duty revenue (excluding
Tradex) dropped progressively by about 27% (Table III.2) as a result of tariff reductions and an
increased number of goods at zero rate of duty.  The main items benefiting from concessional
treatment were aircraft/ship parts, old vehicles, paper for newspapers/magazines, goods for oil/gas
exploration, quality control and testing equipment (PMV manufacturing plan), robots and related
parts, paper/paperboard for cigarette packing, and chemicals.26  The share of imports covered by TCS
declined from 18% (1995/96) to around 11% (1998/99) of total imports, as a result of reductions in
the number of applications lodged and in the general tariffs.27  Tax revenue forgone through the TCS
dropped from around $A 455 million (1996/97) to around $A 369 million (1999/00);  in 2000/01 this
trend was reversed (Table III.2).  Tradex is estimated to cost $A 100 million per annum
($A 102.3 million in 2000/01), in terms of revenue forgone, and is used by firms across severalsectors.
28
Table III.2
Duty forgone by scheme, 1997-01
($A  million)
PeriodTariff
Concession
SystemCheese &
curd
quotaTEXCOPolicy/Project
By-LawsTCFTCF
Policy
By-LawsOverseas
Assembly
ProvisionsMisc. Total
1997/98 387.60 9.91 79.79 34.07 121.11 80.92 10.30 86.89 810.59
1998/99 374.49 8.79 56.55 22.53 105.73 70.69 7.19 78.43 724.40
1999/00 368.98 9.37 58.24 15.39 83.16 58.13 6.19 76.92 676.90
2000/01 390.77 8.86 3.93a17.50 49.23 43.23 5.38 73.66 592.56b
a TEXTO scheme replaced by TRADEX scheme when the Department of Industry, Science and Resources assumed
responsibility under the TRADEX Scheme Act 1999.
b Excludes $A 102.3 million concession for the TRADEX scheme
Source : Summary 3.1, Australian Customs Service (2001), Customs Figures - December 2001,  Issue 25, Canberra.
(j) Tariff preferences and rules of origin
Preferences
33. Australia continues to grant preferential tariff treatment for products traded under the
Australian System of Tariff Preferences for Developing Countries (ASTP), the Australia-NewZealand Closer Economic Relations Trade Agreem ent (ANZCERTA), the Canada-Australia Trade
Agreement (CANATA), the Papua New Guinea-Australia Trade and Commercial Relations
Agreement (PATCRA) and the South Pacific Regional Trade and Economic Cooperation Agreement
(SPARTECA);  these permit reductions of between 20% and 100% to the MFN rate.  The scope of
these preferential arrangements varies but the most important elements relate to textiles, clothing and
footwear, and passenger motor vehicles.
29
34. Despite improvements in preferential treatment, the value of preferential tariffs has continued
to be eroded as a consequence of MFN tariff reductions (Table III.3).30  As from 1 January 2000,
preferential tariffs on passenger motor vehicles and original equipment components from Forum
Island countries and developing countries were reduced by 2.5 percentage points to 10%.  As from
                                                     
26 Australian Customs Service (2001), Table 2.
27 Productivity Commission (2000b).
28 Productivity Commission (2000d).
29 APEC (2000).
30 Productivity Commission (2000b);  WTO (1998).WT/TPR/S/104 Trade Policy Review
Page 38
July 2000, duty rates were reduced for developing countries on many kinds of textiles (fabrics from
17% to 15%), clothing (from 28% to 25%) and footwear goods (from 18% to 15%).
Table III.3
Australian MFN and preferential tariff regime, 1997-02
(Per cent)
MFNaDCbDCScFIdDCTe
1997/98 2001/02 1997/98 2001/02 1997/98 2001/02 1997/98 2001/02 1997/98 2001/02
Simple average 5.6 4.3 2.7 1.8 5.3 3.9 0.1 0.0 5.4 4.0
Agricultural products
(HS 01-24)1.2 1.2 0.0 0.0 1.0 1.0 0.0 0.0 1.1 1.1
Industrial products
(HS 25-97)6.3 4.7 3.1 2.0 5.9 4.4 0.1 0.1 6.0 4.5
aM F N  r a t e s .
b Least-developed countries subject to DC rates of duty.
c Developing country rates other than DCT.d South Pacific Forum Island countries.
e Republic of Korea, Singapore, Chinese Taipei, and Hong Kong, China.
Note: Excluding specific rates and including the ad valorem component of alternate and compound rates.
Source: WTO Secretariat calculations, based on data provided by the Australian authorities.
35. Between 1997/98 and 2000/01 the share of preferential imports to total imports increased
from 22.5% to 23.5% ($A 30 billion) mainly due to faster growth of imports under ASTP treatment
(18.8% of total imports);  the second most important source of preferential imports was New Zealand
(under ANZCERTA).
Rules of origin
36. Australia has not changed its non-preferential and preferential rules of origin since 1998.31
Goods are considered to be the produce or manufacture of a particular country if they meet one of the
following criteria32:  they are unmanufactured raw products of the country of origin;  they are wholly
manufactured in that country33;  or the last process in the manufacture occurs in that country, and a
specified local-content threshold (generally 50%) is met (regional accumulation of value is possible).
37. In 1998 Australia indicated to the WTO Committee on Rules of Origin that the necessary
legislative amendments for implementing obligations relating to origin assessment procedures were to
be passed by Parliament34;  nevertheless, no action was taken as Australia subsequently determined
that these obligations can be implemented under the existing legislative framework.  Australia is anactive participant in the international negotiations to develop the Harmonized System of Rules of
Origin arising from the Uruguay Round.  Australia continues to respond to requests for advice on
developments in the negotiations.  Australia’s position on non-preferential rules of origin has
remained unchanged.
                                                     
31 Section 4 and Section 153Q of the Customs Act 1901, Part VII (Division 1A) of the Customs Act
1901, and Regulations 107A and 107B of the Customs Regulations.
32 Goods eligible for preferential treatment under CANATA must also be shipped directly or, in certain
circumstances, may be transshipped.
33 Where goods would be wholly manufactured in a particular country but for the inclusion of materials
that are not produced in that country or in Australia, special conditions known as the Determined Manufactured
Raw Materials (DMRM) provisions allow Australia to treat those goods as wholly manufactured. This option isnot available for goods claiming Developing Country or Forum Island preferential treatment.
34 Agreement on Rules of Origin, Annex II, Article 2(h) and paragraph 3(d) (WTO document
G/RO/W/26, 25 March 1998).Australia WT/TPR/S/104
Page 39
(iii) Customs valuation
38. Australia was a signatory to the Tokyo Round Customs Valuation Agreement;  it has applied
the WTO Agreement on Customs Valuation without invoking provisions on delayed implementation.
Since 1981,  the Australian customs valuation system has been based on self-assessment (i.e. the
importer is responsible for valuing imports correctly).  Goods are valued under nine different methods
of valuation in a sequence established in the domestic legislation35;  the most common is the
transaction value method which is used for around 98% of all imports.  Australian valuation
legislation allows for the inclusion of royalties, buying commissions, inland freight and inland
insurance in the dutiable value of goods;  the authorities consider that this practice is permitted under
the WTO Agreement.
39. Australia has continued to provide valuation experts for delivering capacity building
assistance, for APEC, WCO, and ASEAN organi zed programmes in the Asia-Pacific region.36
(iv) Other levies and charges
40. In addition to fees for cargo handling, customs clearance, and post clearance compliance
activities, imported and domestic goods are subject to internal indirect taxes (section (4)(i)(a)).  Since
1997, customs fees and charges have been set on a cost-recovery basis.
(v) Import prohibitions, restrictions, and licensing
41. Import prohibitions, restrictions or controls may be operated for reasons of human health,
hygiene and sanitation, animal and plant life, environmental conservation, and essential security, in
compliance with domestic legislative/policy requirements (including revenue objectives) as well as
international commitments.  Since the previous Revi ew of Australia, requirements in this area have
changed slightly.  The enforcement and recent amendment of the Environment Protection and
Biodiversity Conservation Act 1999 (EPBC) Act (section (4)(v)) have allowed Australia to fulfilinternational obligations under the Convention on In ternational Trade in Endangered Species (CITES)
and to streamline administrative processes.  The main changes related to CITES have been the
removal of the import permit requirements for the import of pre-CITES specimens as well as of
certain (Appendix II) listed species carried as personal baggage and for non-commercial purposes
(non-living specimens only);  and the creation of a "Commercial Imports Programme" mechanism.
42. During the period under review no automatic import licensing has been imposed.  Non-
automatic licensing requirements have seemingly been in place to enforce import prohibitions,
restrictions, and controls (Table III.4);  non-automatic import permits may be given on an ad-hoc or
defined-period basis.  Restricted commodities cover a diverse range of tariff items;  data are not
available on the proportion of tariff items that would be classified as restricted for commercialimportation.  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.  Import controls on cordless telephones and CB radios no longer
exist.  While some items may be imported, their use may be prohibited under individual State orTerritory laws (e.g. fireworks and raw asbestos).  Australia's latest Replies to the Questionnaire on
                                                     
35 Australian Customs Act of 1901, as amended on 1 July 1989.  These valuation methods are:  the
transaction value;  the identical goods value;  the similar goods value;  the deductive goods value (consisting ofthe contemporary sales, later sales and derived sales methods);  the computed goods value;  and the fall backmethod.
36 WTO document G/VAL/W/79, 14 November 2000.WT/TPR/S/104 Trade Policy Review
Page 40
Import Licensing Procedures were submitted to the WTO in April 199737;  the authorities indicated
that a full new notification was to be submitted before September 2002.
Table III.4
Main import prohibitions, restrictions, and controls, as of May 2002
Goods Reason Policy Agency/Permit Issuing Agency
Goods banned under the Trade Practices
ActPublic safety Consumers Affairs Division, Department of Treasury
Radioactive substances Public safety ARPANSA, Department of Health and Aging
Industrial chemicals Public safety Department of the Environment and Heritage
Pesticides (Organochlorine chemicals) Public safety Agricultural & Veterinary Chemicals, AFAFF
Dangerous breeds of dogs and associated
advertising matterPublic safety Animal Welfare Section, Agriculture - Fisheries and Forestry-
Australia (AFFA)
Dangerous goods (weapons, electric dogcollars)Public safety/Animal
welfareState/Territory Police Services, Animal Welfare Unit AFFA
Goods coated with or containing
unsuitable mineral compounds (toys,
cosmetics, money boxes, pencils)Public safety/Human
health/ Consumer
protectionTreasury Department – Consumer Affairs Division
Objectionable material Public safety/Consumer
protectionOffice of Film and Literature Classification
Disposable & novelty cigarette lighters Public safety / Consumer
protectionConsumers Affairs Division, Department of Treasury
Glazed ceramic ware Public safety/Human health Treasury Department – Consumer Affairs Division
Warfare items Public safety/Security
interestsDepartment of Defence, State/Territory Police Services
Firearms, firearm accessories, parts,
magazines, ammunition & replicasPublic safety/Security
interestsAttorney Generals Department
Chemical weapons compounds Public safety / Security
interestsAustralian Safeguards & Non-Proliferation Office, DFAT
Counterfeit cards Security interests Australian Federal Police, Attorney Generals Department
Drugs Human health (1) Customs  (2) TGA, Department of Health & Ageing
Antibiotic substances Human health TGA, Department of Health and Ageing
Performance enhancing drugs Human health TGA, Department of Health and Ageing
Therapeutic substances Human health TGA, Department of Health and Ageing
Tobacco leaf Revenue Treasury Department – Australian Taxation Office
Marked fuels Revenue Treasury Department – Australian Taxation Office
Goods containing seeds of any plant
prohibited under the Quarantine ActQuarantine Australian Quarantine and Inspection Service, AFFA
Baume's scale gravity measuring
instrumentsDomestic requirements Wine Vine & Citrus Group, AFFA
Woolpacks and woolpack caps Domestic requirements Meat & Livestock, Wool & Dairy Branch, AFFA
Papua New Guinea cultural items International commitments Department of the Environment and Heritage
Diamonds from certain countries International commitments Africa Desk, Department of Foreign Affairs and Trade
Goods from Iraq International commitments Middle East Desk, DFAT
Fish/toothfish Environmental
conservationAustralian Fisheries Management Authority, AFFA
Ozone depleting substances Environmental
conservation / InternationalcommitmentsOzone Protection Section, Dept of Environment and Heritage
ANZAC goods and associated
advertising matterSymbol of national
significanceDepartment of Veterans Affairs
Source: Commonwealth Government of Australia.
                                                     
37 WTO document G/LIC/N/3/AUS/1/Rev.1, 23 May 1997.Australia WT/TPR/S/104
Page 41
(vi) Government procurement
43. Despite constructive participation in the work of the WTO Working Group on Transparency
in Government Procurement38, Australia has remained the only major industrialized country that is not
a signatory to the Plurilateral WTO Agreement on Government Procurement (GPA).  Thus it is not
bound by principles and rules on transparency and non-discrimination in this area.
44. The authorities have, however, been considering whether it would be in Australia's overall
interest to become a party to the GPA.39  This involves weighing up the benefits of rules to secure
access for Australian exporters to an international market valued in excess of $A 500 billion (as well
as the improvement in Commonwealth and State governments' budget positions owing to their
reduced procurement outlays) against the costs of limiting government flexibility in the use of
procurement for industry development purposes, including the use of State/Territory preferencemargins, together with the costs of complying with the GPA.
40  Abolition of market distortions arising
from State preferences for contracts covered by the GPA has the potential to eliminate the 10%-20%
cost advantage currently enjoyed by suppliers from Australia and New Zealand.
45. General principles applied in this regard in Australia have included:  value for money;  open
and effective competition;  ethics and fair dealing;  accountability and reporting;  nationalcompetitiveness and industry development
41;  and, support for other commonwealth policies.42  The
Commonwealth Procurement Guidelines (CPGs), which form the basis of Commonwealth
procurement policy, were reviewed in 2002.43  Decisions as to the most appropriate purchasing
method rest with individual Commonwealth agencies and their Chief Executive Officers.
Commonwealth government agencies are also required to publish on their website a list of contracts
exceeding $A 100,000 that have not been fully performed or have been entered into in the previous
12 months.  The same agencies must record details of their annual expenditure in detailed annualreports, which should also be available on-line.
                                                     
38 Since its previous Review, Australia has contri buted with a communication on several transparency
issues (e.g. principles, legislation, documentation, procedures, criteria, public announcement, complaint/appeal)and the submission of a draft agreement on transparency in government procurement (WTO documentsWT/WGTGP/W/14, 23 February 1998, and WT/WGTGP/M/9,  10 November 1999).
39 Department of Finance and Administration (1997a).
40 The largest cost for the Commonwealth Government is claimed to be that entailed in the collection,
for GPA-reporting purposes, of statistics not currently ga thered.  Australia has no centralized reporting authority
for government procurement covering all jurisdictions, though the Department of Finance and Administrationkeeps accurate accounts of total Commonwealth expenditure as part of the budgetary process.  At the
Commonwealth level, the National Office for the Information Economy (NOIE) compiles and publishes
statistics ( Commonwealth Purchasing Statistics Bulletin 1999 , currently available at:
http://www.ogo.gov.au/publications/purchasing bulletin 1999) on Commonwealth government expenditurebased on gazetted expenditure reported in the Gazette Publishing System (GaPS).  It is a mandatory reportingrequirement for all Commonwealth government agencies to report in GaPS all contracts and standing offers withan estimated liability of $A 2,000 or more within six week s of entering into an agreement.  This information is
available at:  http://www.contracts.gov.au.
41 For example, since 1993, the authorities have required Government Business Enterprises (GBEs,
central-government-owned companies) like Telstra and the Civil Aviation Authority, to consider industrialdevelopment objectives such as local content and export potential in their procurementactivities (U.S. Department of Commerce, 1999).
42 Other policies supported by procurement practices include:  policies to ensure the preservation of the
environment and the national estate; workplace relations po licy, particularly freedom of association; policies to
advance the interests of Aboriginal and Torres Strait Isla nder people; affirmative action; occupational health and
safety; trade and foreign policy;  and Commonwealth–State coordination and cooperation (Department ofFinance and Administration, 1998).
43 Department of Finance and Administration (2002).WT/TPR/S/104 Trade Policy Review
Page 42
46. The Australian (central and local) government procurement market for goods, services, and
public works is estimated to amount to more than 20% of GDP (1998) annually.44  In 2000/01, the
Commonwealth Government spent approximately $A 13.5 billion on the pu rchase of goods and
services (including expenditure by agencies covered under the Financial Management &
Accountability (FMA) Act 1997 and Commonwealth Au thorities and Companies Act (CAC)) with a
further $A 5 billion on purchases of property, plant and equipment, and intangibles.  This amountdoes not cover procurement spending by State and Territory governments, which is seemingly higher
than Commonwealth government spending;  the author ities intended to supply statistical information
in this respect, but this did not reach the WTO Secretariat by the time of completion of this report.
47. Since the previous Review, practices discriminating against foreign suppliers have been
maintained.  However, under the 1991 Australia and New Zealand Government ProcurementAgreement (ANZGPA), for all goods and services, both countries have continued to ensure:  national
treatment to suppliers from each other's markets;  the absence of application of any
preferential/discriminatory scheme;  and greater consistency in contractual, technical and performance
standards and specifications.
45  Where agencies purchase overseas goods in preference to Australian
or New Zealand goods, they must be able to demonstrate that ANZ suppliers have had fair
opportunity to compete.46  No procurement statistics (goods, services, and public works by supplier
from/to New Zealand) were available to the Secretariat.
48. 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).47  Under the
Commonwealth Government’s Model Industry Development Criteria (MIDC) for major procurements
(i.e. exceeding $A 5 million), purchasing agencies subject to the FMA Act 1997 must, where
appropriate, clearly identify in tender documentation relevant industry development criteria relating toopportunities for SME participation.  The Commonwealth Government is committed to ensuring
opportunities for SMEs, either as prime contractors or sub-contractors, to participate in government
purchasing activity and that they are not discriminated against in securing government contracts.  No
procurement statistics from SMEs were available to the Secretariat.
49. Certain States have maintained a 10% preference (Western Australia, Tasmania and Northern
Territory) or 20% preference (New South Wales, Queensland and South Australia), in the form of a
nominal increase on tendered price, for procurement of domestic or New Zealand goods and related
services to uphold industry development, social or economic objectives.
48  Preference margins are not
applied to purchases of services alone (i.e. unrelated to goods contracts).
50. Government procurement has continued to be used to promote foreign participation in
research and development (R&D), training, techno logy transfer, capital investment, and job creation
in Australia's information technology and telecommunications industry.  Since 1991, information
technology and telecommunications companies with annual sales to the Australian Government of up
to $A 40 million have been required to enter in to fixed term arrangements (FTAs), which commit
firms to a four-year programme of industrial development activities (Chapter IV).49  Until
                                                     
44 OECD (2001).
45 Department of Finance and Administration (1997b), Australia New Zealand - Government
Procurement Agreement (Revised 1997)  [Online].  Available at:  http://www.dofa.gov.au/ctc/publications/
purchasing/international/australia_new_zealand_governme.html [24 April 2001].
46 Department of Finance and Administration (1998).
47 Department of Finance and Administration (1998).
48 WTO (1998);  and European Commission (undated).
49 In addition, industry development activities must have a value of 15% of the projected level of total
Government business (WTO (1998)).Australia WT/TPR/S/104
Page 43
October 2001 foreign firms with sales greater than $A 40 million had to sign partnerships for
development (PfDs).  Foreign firms were required to sign a seven-year PfD contract with the
Government, committing themselves to R&D expenditure equivalent to 5% of their annual turnover,
exports equivalent to 50% of their annual imports50, and an average of 70% local value added across
all exports.  PfDs were replaced by the Strategic Partnership Industry Development Agreements
Programme (SPIDA);  any company (foreign or domestic) with annual IT sales to the Federalgovernment of $A 10 million or more is now required to have a SPIDA.  Over 100 firms seem to be
involved under these programmes, generating over $A 10 billion of exports and $A 3 billion of
R&D.
51
51. As no single purchasing method suits all situations, the Commonwealth does not prescribe
methods for procurement or any arbitrary thresholds.  Buyers must consider requirements and existingmarket conditions of each procurement, and select a procurement method on its merits.  Following the
1997 "purchasing review", purchasing procedures seem to have been decentralized, with the
replacement of the former endorsement process and Common Use Arrangements by the Endorsed
Supplier Arrangement (ESA), a mandatory pre-qualification scheme.  Prior to any access to
government procurement, suppliers of information technology products, major office machines,commercial office furniture, and auctioneering services must gain endorsement under the ESA.  To
become an endorsed supplier, a company must submit an application package for assessment.  Criteria
considered at the time of assessment include:  financial viability; favourable referee reports (a
successful track record for delivery);  product and service compliance with the agreed industry
standards;  compliance with certain Commonwealth Government policies (discussed earlier);
agreement and adherence to the endorsement rules;  a Head Agreement (for suppliers of IT and major
office machines only);  and industry development (for suppliers of IT and major office machinesonly).
52  The industry development component of the ESA requires evidence of product development,
investment in capital equipment, skills development and service support, sourcing services and
product components, parts and/or input obtained locally, and financial viability.  In addition,
applicants must satisfy performance requirements in exports, R&D, development of strategic
relationships with Australian or New Zealand suppliers/customers, or participation in a recognizedindustry development programme.
52. Commonwealth government open business opportunities are advertised on the Internet
(http://www.ads.gov.au);  in addition, tenders being run by individual Commonwealth agencies are
usually advertised in other media, such as Australian newspapers.  Links to the procurement
operations of State Governments can be accessed via the Department of Finance and Administrationonline information.
53  As indicated earlier, consolidated purchasing data, including the award of
contracts over $A 2,000 is currently reported in the Commonwealth Gazette and Publishing System
(GaPS).
                                                     
50 Software companies are required to export the equivalent of 20% of their Australian
turnover (WTO, 1998).
51 European Commission (undated).
52 Detailed information concerning the operation of the ESA, including requirements for companies
who wish to register and/or pre-qualify for the scheme, may be found on ESA online information.  Available athttp://www.esa.finance.gov.au/.
53 Available at:  http://www.finance.gov.au/ctc/links/ctc procurement related site.html.WT/TPR/S/104 Trade Policy Review
Page 44
(vii) Local-content requirements
53. In addition to the  local-content requirements in connection with government procurement,
the contract value covered by the state-run Export Finance and Insurance
Corporation (section (3)(iv)(d)) depends on the degree of local content;  for example, products with
local content of 60% or more may receive up to 85% of the export contract value, while local content
of less than 50% benefits from an equivalent level of support.54
54. Local-content requirements have also been maintained in the broadcasting services sector,
where at least 55% of a commercial television licensee's average annual broadcasts between 6am and
midnight must involve dedicated Australian programmes.  Pay-television channels devoted to drama
programmes have to allocate 10% of their expenditure to Australian drama programmes. Sub-quotas
for dramas, children's and documentary programmes have been maintained.  Under the AustralianBroadcasting Authority’s Australian Content Standard (Chapter IV), Australian official co-
productions, New Zealand programmes, and Australian/New Zealand programmes are counted as
Australian.
55. Australia has not made any notification of trade-related investment measures under the WTO
Agreement on Trade-Related Investment Measures.  According to the authorities, Australia does notmaintain any trade-related investment measures (TRIMs).
(viii) Contingency measures
(a) Anti-dumping and countervailing measures
56. Since 1998, Australia's recourse to anti-dumping action has fluctuated (Chart III.5);  with
111 cases initiated between 1996 and 2001, Australia was the world's fifth largest user of this
measure.55  Of the 52 anti-dumping investigations initiated between 1998 and 2000, 18 were subject
to provisional measures, 19 resulted in definitive measures (involving anti-dumping duties andminimum export price undertakings).  Actions affected mainly plastics, chemicals, base metals, pulp
of wood/paper or paperboard and textiles, originating mostly in Indonesia and Thailand, as well as
individual EU countries (Chart III.5).  One countervailing action has been initiated during the period
under review;  overall five countervailing measures on agricultural items from different EU countries
were in force by mid 2000.
56  Since July 1990 there have been no Australian initiations against
imports from New Zealand as a result of the elimination of anti-dumping and countervailing actions in
trans-Tasman trade under the ANZCERTA.57  Such actions have been obviated by the coordination of
the two countries competition policies.58
                                                     
54 Export Finance and Insurance Corporation (EFIC) online information.  Available at:
http://www.efic.gov.au/themes/finance_index.asp [18 April 2001].
55 Data based on reporting to the WTO Secretariat.
56 These countervailing duties affect:  brandy from France (since February 2000);  cherries glace from
Italy and France (since April 1997);  canned tomatoes from Italy (since April 1997);  and canned peaches from
Greece (since February 1997) (WTO document G/SCM/N/62/AUS, 13 July 2000).
57 Productivity Commission (2000d)
58 Obligations under the Trade Practices (Misuse of Trans-Tasman Market Power) Act 1990, included
the removal of anti-dumping measures against goods originating from New Zealand by July 1990 (WTO, 1998).Australia WT/TPR/S/104
Page 45
0510152025
1998 1999 2000 2001
Source :  Notifications to the WTO.Other
4.0United 
States
5.3
Saudi Arabia
2.7 Japan
4.0Other 
Europe  4.0 EU15
17.3Vehicles   
 5.3
Malaysia
4.0
China
10.7Other
6.7
Chemicals & prod. 
thereof
14.7
Pulp of wood,
paper/paperboard
8.0(b) By product 
Per cent(c) By origin 
Per centChart III.5
Anti-dumping cases, 1 January 1998 - 31 October 2001
(a) By number of cases initiated
Final measures No final measures
  Other America  2.7
East Asia 
59.6Pending cases
 Base metals & 
articles thereof
17.3
Plastics, rubber & 
articles thereof
29.3Textiles &
 articles thereof
8.0Mineral products
      5.3
Chinese
 Taipei
6.7Korea, Rep. of
9.3
Indonesia
13.3Singapore
4.0Thailand
12.0Vegetable products
        5.3WT/TPR/S/104 Trade Policy Review
Page 46
57. Since July 1998, a new institutional and procedural setting has been operated.  The
requirement that companies wishing to have a comp laint investigated must have at least 25% local
content in the product in question was repealed.  Following the elimination of the Anti-Dumping
Authority, the Australian Customs Service (ACS) is now the sole agency in charge of the entire
investigation;  after an initial screening period of up to 20 days, the investigation is now undertaken as
a single-stage procedure of 155 days (previously these procedures took up to 215 days).59  Appeals
against a final finding entail a review by a Trade Measures Review Officer (TMRO) of the
interpretation of existing information rather than further investigation.  Anti-dumping and
countervailing measures continue to be subject to a five-year sunset clause, with reviews undertaken
prior to the expiry date, if there is a request for the action to continue.  The anti-dumping system was
to be reviewed before June 2002.
58. Since its last Review, Australia has regularly submitted semi-annual reports on actions in this
area to relevant WTO Committees.  It has also made submissions to the Working Group on
Implementation on several issues (e.g. treatment of confidential information, sampling method,
special circumstances, notification to the exporting member, provision of essential facts, duty
assessments, hearing processes, transaction to tr ansaction method, weighed average dumping
margin, termination of investigations, cases of de minimis  import volume, questionnaires,
opportunities for supply of information by industri al users and consumer organizations, "new shipper"
reviews ).60
(b) Safeguards
59. During the period under Review, Australia has not had recourse to safeguards measures;
while in 1998/99 it considered the introduction of border measures on imports of swine meat, it
decided to increase the existing domestic adjustment assistance available to the swine meat industry.61
In the context of the WTO Committee on Safeguards, in 1999 Australia replied to questions raised by
Canada and the United States, on issues relating to its safeguards legislation and procedures.62
(ix) Standards and other technical requirements
(a) Standards
General framework
60. Since Australia's previous Review, the institutional framework has remained unchanged.
Under the Commonwealth system, the legislative, executive, and judicial powers relating to technicalregulations (mandatory standards) are shared between the Commonwealth (the Australian Central
Government) and the constituent State and Territory Governments (Chapter II).
63
                                                     
59 Despite the shortened investigation period, there have been some delays in the announcement of final
rulings because the ACS may impose interim duties 60 days after the investigation is initiated, and these remainin place until the Customs Minister makes a ruling; such delays can pose problems for producers and users ofrelevant imported products (Productivity Commission, 2000d;  and European Commission, undated).
60 WTO documents:  G/ADP/AHG/W/47, 22 April 1998;  G/ADP/AHG/W/51, 7 August 1998;
G/ADP/AHG/W/77, 20 March 2000;  G/ADP/AHG/W/90, 25 April 2000;  and G/ADP/AHG/69/W/97,
2 October 2000.
61 WTO document G/SG/M/13, 21 July 1999.
62 WTO document G/SG/Q1/AUS/3, 27 April 1999.
63 Commonwealth and national regulators have responsibility for making technical regulations in
pharmaceuticals, medical devices and therapeutic goods, food, occupational health and safety, product safety,Australia WT/TPR/S/104
Page 47
61. A 1992 Commonwealth/State Agreement on Mutual Recognition allows a product that is in
conformity with requirements of at least one State or Territory (i.e. legally saleable) (to be sold
throughout Australia.  Nonetheless, there are state-based point-of-sale requirements and banning
orders under consumer protection legislation.  In  a number of areas, where the use of products is
regulated (e.g. pressure equipment, bicycle helmets) and the relevant Australian standards are
accepted as providing the technical requirements, jurisdictions have different administrativerequirements such as for certification or allocation of legal liability (e.g. under their Motor Traffic or
Occupational Health & Safety (OH&S) Acts).
64  In 1998, the Workplace Relations Ministerial
Council decided that Australian Standards shou ld no longer be referenced under state OH&S
legislation.
Mandatory standards62. At the Commonwealth level, the Australia New Zealand Food Authority (ANZFA) within the
Department of Health and Ageing, is responsible for developing and reviewing mandatory standards
(i.e. technical regulations) for food available in Australia and New Zealand, and for a range of other
functions, including coordinating national food surveillance and recall systems, conducting research,
assessing policies on imported food, and developing codes of practice with industry.  The TherapeuticGoods Administration (TGA), also within the Depart ment of Health and Ageing, is responsible for
developing standards for pharmaceuticals and therapeutic goods.
63. The Department of Transport and Regional Services is responsible for developing national
standards (technical regulations known as Australian design rules (ADRs)) covering safety and
emission requirements for vehicles.  The Department also conducts test facility inspections and
conformity of production assessments on laboratories and production facilities involved in the testing
and manufacture of road vehicles.  There are over 70 Australian design rules covering all categories ofvehicles (motor cycles, passenger cars, omnibuses, light and heavy duty goods vehicles and trailers).
Ten new ADRs have been issued since 1998.
64. Australia acceded to the United Nations Economic Commission for Europe (UN/ECE) 1958
Agreement concerning the regulation of vehicles and automotive parts in February 2000.  While many
ADRs were already harmonized with UN/ECE Regulations, all ADRs are now being reviewed withthe objective of further alignment with UN/ECE Regulations.  Australia and New Zealand have
agreed to review the applicability of the provisions of the Trans-Tasman Mutual Recognition
Agreement (TTMRA) with regard to vehicle standa rds following accession by both countries to the
UN/ECE 1958 Agreement.
65. The Consumer Affairs Division of the Depa rtment of the Treasury develops national
(Commonwealth) mandatory safety a nd information standards for selected consumer products.  Two
further public sector institutions responsible for national standards are the National Standards
Commission (legal metrology and pattern approval) and the National Measurement Laboratory
(primary measurement standards).
                                                                                                                                                                    
agricultural and veterinary chemicals, telecommunicati ons and radio communications, aviation, marine and road
safety, measurement, and building codes.  State and Territory regulators are responsible for making technical
regulations in areas such as food, power, water, public health, occupational health and safety, road transport andthe environment.  More information may be found in WTO document G/TBT/2/Add.8/Rev.1, 29 May 2001.
64 Currently the National Occupational Health and Safety Commission (NOHSC) is in the process of
developing national guidelines and standards.WT/TPR/S/104 Trade Policy Review
Page 48
Voluntary standards
66. Standards Australia International (SAI) or Standards Australia, the top non-governmental
standards writing body, is responsible for the formulation and publication of voluntary standards.65
The responsibilities of SAI with respect to standards formulation are set out in a Memorandum of
Understanding (MOU) with the Australian Commonwealth Government.66  The Australian standards
prepared by SAI are frequently applied in a mandatory fashion by reference in technical regulations.Mandatory product safety standards (Commonwealth),  mainly based on standards developed by SAI
or other recognized overseas standards authorities, affect several items and are enforced by the
Australian Competition and Consumer Commission (ACCC).
67  Unsafe goods are banned.68
Testing and certification
67. Standards enforcement is the responsibility of various regulatory agencies.  Accreditation of
conformity assessment bodies is handled by the Na tional Association of Testing Authorities (NATA),
and the Joint Accreditation System of Australia and New Zealand (JAS-ANZ).  NATA accredits the
competence of calibration and testing laboratories and inspection bodies;  its responsibilities are set
out in the MOU mentioned earlier.  JAS-ANZ accredits the competence of certification bodies for the
certification of management systems, products, and personnel.
68. The use of quality management system standards such as the IS0 9000 series and ISO 14000
series has been increasing.  Between 1995 and 2000 the number of Australian companies certified to
ISO 9000 increased from 8,850 to 24,700.  During the same period companies certified to ISO 14000
increased from 1 to 1,050.  JAS-ANZ maintains a Re gister of companies certified as complying with
the IS0 9000 series69;  a process of updating the Register and the accuracy of the information it
contains is due for completion by the end of 2002.
                                                     
65 In addition to Standards Australia , there are at least 16 private sector bodies that prepare industry
standards, codes, and guides.  Two of these bodies, the Australian Gas Association (AGA) and the Australian
Communication Industry Forum (ACIF), are accredited by  SAI’s Standards Accred itation Board to prepare
Australian Standards in specific areas.  In additio n to Standards Australia (1995) and the Australian
Communications Authority (1997), in 1998 ACIF and AGA and in 2001 the Australian Forestry StandardSteering Committee, three non-governmental standardizing bodies, have accepted the Code of Good Practice
annexed to the WTO Agreement on Technical Barri ers to Trade (WTO document G/TBT/CS/2/Rev.8,
13 February 2002).  WTO (1998).
66 This MOU is with the Department of Industry, Tourism and Resources (www.industry.gov.au).
67 These requirements cover:  balloon blowing kits, bean bags, children's household cots, children's
flotation toys and swimming aids, children's night-clothes, paper patterns for children's night-clothes, disposablecigarette lighters, elastic luggage straps, exercise cycles, motor cycle helmets, motor vehicle child restraints,
pedal bicycles, portable fire extinguishers, protective helmets for pedal cyclists, sunglasses, toys for children
under three-years old, trolley jacks, vehicle jacks, vehicle ramps and vehicle stands (Consumers Online, theCommonwealth Government's One-Stop-Shop for Consumer Protection in Australia.  Available at:http://www.consumersonline.gov.au/sitetext/productsafety/standards.htm [19 April 2001]).
68 Since the previous Review of Australia, candles containing lead, "diveman" underwater breathing
apparatus, gas masks containing asbestos, glucomanna n in tablet form (diet aid), "quickie" line release
system (ski rope), seat belt accessories, sun visors, ch ewing tobacco and snuff, and victim toys (depicting
violence) have been prohibited (Australian Competition and Consumer Commission online information.Available at:  http://www.accc.gov.au/product_safety/fs-product_safety.htm [19 April 2001]).
69 The JAS-ANZ Register can be viewed at:  h ttp://www.standards.com.au/jasanz/.  A list of
organizations certified by JAS-ANZ is available at:  www.jas-anz.com.au/3rdpartyfax.pdf.Australia WT/TPR/S/104
Page 49
International cooperation
69. In addition to the 1996 Trans Tasman Mutual Recognition Agreement (in force from
May 1998), since the last Review Australia has signed treaty-status Mutual Recognition
Agreements (MRAs) on Conformity Assessment with the EU (1998),70 with
Norway/Iceland/Liechtenstein (in force on 1 July 2000)71, and with Singapore (in force on
1 June 2001)72, as well as a voluntary MRA with Thailand (in force 1 July 2000).73  In the context of
APEC, Australia has become a party to the MRAs  on Conformity Assessment of Telecommunications
Equipment (in force 1 July 1999), Conformity Asse ssment of Electrical and Electronic Equipment (as
from September 1999)74 and Conformity Assessment of Foods and Food Products (in force
August 1997).75  Both NATA and JAS-ANZ have develope d an extensive network of MRAs through
international and regional fora (International La boratory Accreditation Cooperation (ILAC), Asia-
Pacific Laboratory Accreditatio n Cooperation (APLAC), Internati onal Accreditation Forum (IAF),
Pacific Accreditation Cooperation (P AC)).  Australia has participated in the APEC Arrangements for
the Exchange of Information on Toy Safety since 1997, and Food Recalls since 1999.
70. During the period under Review, Australia participated in discussions in, and made
submissions to, the WTO Committee on TBT on issues such as the principles for good practice for theacceptance of the results and transparency of the process of accreditation and conformity assessment,
the development of international standards, and the relationship between the TBT Committee and
international standardization bodies.
76  Australia has continued to provide various forms of technical
assistance in the Asia-Pacific region.
Transparency
71. Notices of technical regulations are generally published in the Commonwealth of Australia
Gazette  as well as on the websites of bodies such as the ANZFA.  Additionally, standards and
conformity assessment procedures are notified widely in national newspapers, in-house journals and
other relevant Australian, State and Territory government publications.  Notices on voluntary
standards are also published in the journal of Standards Australia, The Australian Standard , while
                                                     
70 This MRA covers testing and certification procedures (including final approval) for pharmaceuticals,
medical equipment, telecommunications terminal equipment, low voltage electrical equipment, machinery,pressure vessels, motor vehicles and parts, an d electro-magnetic compatibility (WTO document
G/TBT/10.7/N/24, 19 July 1999).
71 The coverage of this MRA is identical to the MRA with the European Union.  Further information is
contained in the Department of Industry, Tourism and Resources online information.  Available at:
http://www.industry.gov.au/content/controlfiles/display_details.cfm?objectid=3F11C0E5-2D89-4607-8F9C94540CC9B7F3.  WTO document G/TBT/10.7/N/25, 19 July 1999.
72 This MRA covers testing and certification procedures (including final approval) for
telecommunications terminal equipment, electrical and el ectronic equipment, and medicinal products.  See also
Department of Industry, Tourism and Resources online information.  Available at:
http://www.industry.gov.au/content/controlfiles/display_details.cfm?objectid=C423D9E2-0AD8-40B2-A7D028
7F5EA21E75.  WTO document G/TBT/10.7/N/30,  28 May 2001.
73 This MRA with Thailand covers test reports for automotive products for use in certification
procedures (APEC, 2000).  WTO document G/TBT/10.7/N/23/Rev.1, 22 June 1999.
74 This MRA, which encompasses test results on  covering cord and cordless telecommunication
equipment, eliminated the need for separate conformity testing of exported products in each market.
Department of Foreign Affairs and Trade online information.  Available at:  http://www.dfat.gov.au/
apec/contacts.html [20 April 2001].
75 APEC (2000).
76 WTO documents:  G/TBT/M/17, 12 November 1999; G/TBT/W/138, 28 July 2000; and
G/TBT/W/139, 28 July 2000.WT/TPR/S/104 Trade Policy Review
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information on conformity assessment procedures are published in the NATA newsletter, NATA
News .
72. Between 1998 and 2000, the number of published Australian voluntary standards increased by
4.7% to 6,200 of which 2,100 are Australian/New Zealand standards, prepared jointly with Standards
New Zealand.  Australian standards cover all sectors of the economy.  The authorities indicated that
the share of published voluntary standards aligned with international standards has increased from49% (1997) to 80% (1999);  for the remainder, there was no international equivalent.  Australian
standards for which there are no international sta ndards exist for soils, aggregates, babies' cots,
nightwear, children’s swimming aids.
73. Since 1998, 126 surveys have been conducted on each of the 21 mandatory product safety
standards plus the two health-related information standards;  252 products were found to be non-complying.  These breaches would have resulted in a range of remedial measures (product recall,
withdrawal from sale, product modification, re-label ling, etc.) or enforcement measures (prosecutions,
injunctions, court orders, enforceable undertakings, administrative actions).
74. Between 1998 and 2002 (May) Australia made 64 notifications (including those concerning
genetically modified agricultural and food products) under the WTO Agreement on TechnicalBarriers to Trade (TBT);  the timeliness of submission improved in 1999, with most notifications
allowing for a 45-59-day comment period, compared with less than 45 days in 1998.
77
(b) Sanitary and phytosanitary regulations
75. Australia's SPS measures have been criticized by a number of its trading partners on the
grounds that they are unduly stringent and therefore protectionist.  However, Australia is heavily
dependent on agriculture and a major exporter of agricultural commodities and agri-food products.
As these receive relatively little government support (section(4)(ii)) and are sold at world marketprices, the SPS measures are believed to be necessary to ensure that Australia's reputation as a reliable
exporter of high quality agricultural products is not jeopardized by pests and diseases.
76. As a major exporter of agricultural items, Australia's geographic isolation has allowed it to
remain relatively free of exotic diseases.
78  Australia has a strong interest in multilateral trade rules on
quarantine that are based on scientific evidence rather than sectoral protection;  these rules obligeAustralia to maintain a transparent and scientifically justified quarantine regime.
79
77. Since its previous Review, Australia has maintained many quarantine controls and food
standards that are stricter than relevant standards promulgated by international bodies (e.g.,
CODEX Alimentarius Commission).  The authorities consider that these high quarantine standards
appropriately reflect legitimate domestic needs and are WTO consistent.80  Quarantine legislation has
been amended to better reflect policies and practi ces, and to ensure consistency with international
obligations;  the concept of "quarantine risk" and its management to an acceptably low level have
been formally introduced.81  As from 1995, the ACCC has held consultations with the Australian and
New Zealand Food Authority (ANZFA) with respect to the Standards Code Review;  a new joint
                                                     
77 WTO documents G/TBT/7, 3 March 1999, G/TBT/W/115, 17 June 1 999, G/TBT/8, 31 January 2000,
and G/TBT/W/115/Add.1, 18 October 2000.
78 U.S. Department of State (2000).
79 Australian Department of Foreign Affairs and Trade (undated b).
80 Australian Department of Foreign Affairs and Trade online information.  Available at:
http://www.dfat.gov.au/trade/negotiations/index.html#oecd [23 April 2001].
81 Australian Quarantine & Inspection Service (AQIS) (undated).Australia WT/TPR/S/104
Page 51
Australia New Zealand Food Standards Code was adopted in November 2000, and will come into
effect on 1 January 2003 when the revised code becomes the sole set of food regulation requirements.
During a two-year phase-in/transition period foods may comply either with the old or the new codes
(but not a combination of these).  During the sa me period, ANZFA is to review a number of food
standards or codes of practice to consider:  harmonization between Australia and New Zealand
standards;  inconsistencies with trade practices and fair trading laws;  trade-related issues;consistency with international requirements;  and regulatory impact.  A Gene Technology Act 2000
(in force as from June 2001) has, inter alia,  provided for an efficient and effective system for the
application of gene technologies including research, field trials, and the intentional general release of
GMOs into the Australian environment;  and GMOs licence charges to support the regulatory
framework.  A strong and independent Gene Technology Regulator (GTR), to be responsible formaking all decisions on individual applications, was appointed in December 2001.
SPS requirements
78. Since its previous Review, Australia has reinforced surveillance measures against bovine
spongiform encephalopathy (BSE) or Mad Cow Diseas e.  Importation of beef and beef products is
prohibited from any country reporting one or more BSE cases in their cattle population.  The policy isbased on an Australian risk assessment completed by ANZFA.
79. In line with its cautious quarantine approach, since March 2001, Australia has also
strengthened its foot-and-mouth disease (FMD) controls by, inter alia,  installing additional x-ray units
at airports and international mail and courier centres, strengthening inspection and surveillance at
seaports, reinforcing air/sea cargo inspection, and extending temporary import restrictions on horses
and other non-FMD susceptible animals with a high level farm contact.
82
80. Since mid-1999, mandatory standards for foods produced using modern biotechnology have
prohibited the sale of food produced using gene technology, unless the food has been assessed by the
ANZFA and listed in the standard;  by April 2002, ANFZA had completed safety assessment of
seventeen foods produced from gene technology and more are currently being assessed.
Quarantine and inspection process
81. According to the authorities, Australia’s unique and diverse flora and fauna, its climate
(tropical to sub-temperate conditions) and the (export-related) value of agricultural industries require
a highly conservative (but not a zero-risk) approach to biosecurity risk management.83  Since
June 1999,  a quarantine and inspection process has required imported agricultural commodities to
undergo an import risk analysis (IRA) to determine the commodities' risk of introducing pests and
diseases into Australia as well as how and if the risk can be managed.  The authorities consider theirmanaged risk approach to biosecurity WTO-consistent as it is based on scientifically justified
                                                     
82 Online information by the Australian Quarantine & Inspection Service (AQIS).  Available at:
http://www.aqis.gov.au/docs/pr/mreu.htm [23 March 2001].
83 These conditions increase the potential for the sp read of unwanted pest and diseases, and as a
relatively isolated island nation, with limited points of entry, the entry of passengers and goods at the border canbe managed with a high degree of certainty to provide effective protection against pests and disease entry.
Many Australian exports are in a raw commodity form and access to many markets would be adversely affected
if pests and diseases were to establish in Australia.
According to one trading partner,  Australia's acceptable level of protection is very near zero-risk,
allegedly making access to the Australian market often difficult, expensive, and time-consuming(U.S. Department of Commerce, 1999).WT/TPR/S/104 Trade Policy Review
Page 52
measures, which are the least trade restrictive possible84;  imports are permitted under certain
protocols that appropriately manage the risk of the spread of pest and disease (e.g., mangoes from the
Philippines, Californian table grapes, Canadian salmon).  The procedure followed by Biosecurity
Australia in analysing sanitary or phytosanitary risk is based on international standards established
under the auspices of the Office International des Epizooties (OIE) and the International Plant
Protection Convention (IPPC).85  An IRA process may take from one to two years.  A new
administrative framework for IRAs is to be finalized and implemented in 2002.
82. Since its previous Review, Australia has commenced IRA's on the following:  chicken (fresh,
cooked, frozen), pork, Florida citrus, stone fruit, apples, Pacific North-West cherries, maize, olives,
dairy, sauces containing benzoic acid, and timber from certain destinations.  It  has completed
25 IRAs and numerous policy reviews (including of cooked chicken imports permitted from theUnited States, Denmark, and Thailand under specific risk management measures).  Following a long
running dispute with Canada on the importation of salmon, agreement was reached in May 2000 on a
set of least trade restrictive quarantine requirements that ensure Australia’s fish health status is
protected.  In 2002, Australia agreed to import Californian table grapes under specific risk-
management measures.  Due to differences in animal and plant health status across Australia, theremay be different quarantine measures imposed on a regional basis.
83. Reports to public enquiries indicate that the authorities take seriously market access requests
by trading partners, and recognize that some requests are likely to put further pressure on domestic
industries.
86  It is also recognized that Australia cannot reject or indefinitely defer consideration of
access requests from its trading partners, but there is a limit on resources to undertake IRAs.  Imports
have also played an important role in the development of the agriculture sector as well as consumer
food markets, for example in enhancing rural productivity through improved genetics and inproviding consumers with a wider range of competitively priced food products.  They recognize that a
zero-risk approach may also expose Australian exporters, including those in unrelated sectors, to
costly retaliation, either through the WTO or of a more surreptitious nature.
Transparency
84. In 1998, a handbook was published on the risk analysis process.
87  The process is now being
reviewed in consultation with stakeholders in the light of experience with IRAs.  The Australian
Quarantine and Inspection Service (AQIS) has adde d a detailed import-conditions database to its
daily-updated web site, which also contains Australian labeling requirements for imported packaged
food, requirements for animals and animal products, documents for public comment (including import
risk analyses), fee schedules, on-line forms, SPS notifications, etc. may also be found.88  Between
1998 and June 2001, Australia submitted 63 SPS-related notifications to the WTO, including all its
web sites containing SPS information.89  Since its previous Review, Australia has assisted regional
and sub-regional initiatives to build quarantine infrastructure capacity, capacity in risk analysis, and to
                                                     
84 A partial equilibrium empirical analysis of Australia’s SPS-related ban on imports of bananas
suggests that while a move to free trade may well cause a major contraction of banana growing in Australia, theeconomic welfare gains to consumers are almost certain to far outweigh the losses to producers (Anderson and
James, 1998).  The paper concludes that there is a need for a comprehensive economic review of Australia’smyriad quarantine/SPS policy measures.
85 Australian Quarantine & Inspection Service (AQIS) (undated)
86 AFFA online information.  Available at: http://www.affa.gov.au/outputs/
marketaccess.html [23 March 2001].
87 Australian Quarantine & Inspection Service (undated).
88 AQIS online information.  Available at:  http://www.aqis.gov.au/import/index.htm.
89 WTO document G/SPS/GEN/144/Rev.1, 8 March 2000.Australia WT/TPR/S/104
Page 53
improve awareness of sanitary and phytosanitary issues in general.90  In October 1999, it hosted the
FAO Conference on International Food Trade beyond 2000:  Science-Based Decisions,
Harmonization, Equivalence and Mutual Recognition.91  Australia recognizes the principle of
equivalence as part of its SPS obligations.  For example, equivalence agreements have been signed
with Switzerland on the importation of non-pasteurized cheese, with Norway on cheese, Japan on
organics, and Canada on seafood.
(c) Marking, labelling, and packaging
85. Marking and packaging rules continued to affect a wide range of products.  Consumer
products, mainly foodstuffs, must comply with St ate-specific packaging regulations;  meeting the
legal requirements of one State allows a product to be sold in all other States and Territories.
86. In response to consumers' demand for more balanced and factual information on GM foods,
since December 2001 mandatory labeling requirements have been in force for foods produced using
gene technology.92  As from October 1999 mandatory energy labelling requirements have affected
appliances such as refrigerators, freezers, clothes washers/dryers, dishwashers, room air conditioners,
mains-pressure electric-storage water heaters, which are subject to minimum energy-performance
standards (MEPS) setting minimum energy-efficiency levels;  MEPS programmes are mandatoryunder State Government legislation and regulations.
93  As from January 2001, new motor vehicles
with a gross vehicle mass (GVM) of up to 2.7 tonnes are required to carry a fuel consumption label on
the windscreen at the point of sale;  an expansion of this requirement to include all new vehicles up to
3.5 tonnes GVM is to be phased in from January 2003.  Mandatory product information standards
including care labelling for clothing and textile products, and cosmetic and tobacco product labelling
remain in force.94
(3) MEASURES DIRECTLY AFFECTING EXPORTS
(i) Registration and documentation
87. Unless specifically exempt, goods may be exported or loaded on a ship or aircraft for export
only after having been registered or entered in the electronic ACS Export Integration (EXIT) system
and Customs has given approval by means of a "clear" Export Clearance Number (ECN).  About 97%
of exports are lodged directly into the EXIT system on a self-assessment basis.  Customs officersexamine export cargo for, inter alia,  prohibited goods or restricted exports that are not covered by an
appropriate export permit.  Shipments may not depart unless Customs has issued a certificate of
clearance.
95  New integrated cargo export systems are to be introduced after November 2003.96
88. Since 1999, the Australian Quarantine and Inspection Service (AQIS) has operated a pilot
programme with the governments of Malaysia, Thailand, Indonesia, and the Philippines to provide
                                                     
90 WTO document G/SPS/GEN/124, 15 June 1999.
91 WTO document G/SPS/GEN/158, 17 December 1999.
92 Australian Department of Foreign Affairs and Trade (2001);  and United States Trade
Representative (2001).
93 Australian Government online information.  Available at: http://www.energyrating.
gov.au/ [19 April 2001].
94 Consumers Online.  Available at:  http://www.consumersonline.gov.au/sitetext/productsafety/
standards.htm [19 April 2001].
95 Australian Customs Service (ACS) online information.  Available at:
http://www.customs.gov.au/corp/manuals/vol12/text/div1set.htm [19 June 2001].
96 The Australian Financial Review,  Tuesday 30 April 2002.WT/TPR/S/104 Trade Policy Review
Page 54
certificates of origin and sanitary clearances online so as to reduce paperwork for Australian
exporters.97
(ii) Export prohibitions, restrictions, and licensing
(a) Export prohibitions
89. During the period under review, export prohibitions have been introduced affecting
counterfeit credit/debit/charge cards, radioactive waste to Pacific island developing countries,toothfish, and fissionable materials;  minor adjustments have affected UN-related prohibited exports
to Angola and Sierra Leone.  Australia has maintained the export ban on merino ewes and embryos
for breeding purposes, except to New Zealand under ANZCERTA and for approved scientific
purposes.
98  Exports of protected wildlife (under CITES), some heritage items, selected weapons and
other dangerous goods (e.g. hazardous waste, ozone depleting substances) are prohibited or subject toexport permit.
99  Amendments to the Commonwealth’s Environment Protection and Biodiversity
Conservation Act 1999 have streamlined many of the processes for the export of CITES-listed species
and their products, thus making it easier for industry groups and individuals to conduct "reasonable
and legitimate" trading activities;  at the same time these amendments have also strengthened
safeguards for the conservation and welfare of wildlife.
(b) Export licensing and restrictions
90. In the light 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.100  Export controls on wood
and woodchips are for the purpose of protecting environmental and heritage values.
91. Following a legislative review undertaken as pa rt of the National Competition Policy (NCP),
the Export Control Act was retained because of the trade facilitation benefits that accrue to Australia
through its operation.  However, there have been recommendations for amendments to the Act and
changes to the way it is administered  so that they accord with NCP principles, and are based on active
cooperation between government and individual industries.
                                                     
97 Australian Department of Foreign Affairs and Trade (2001).
98 The reason, according to the authorities, is that the Australian wool industry has made substantial
investment in improving the quality of merino wool over the years and this is a crucial element in the
competitiveness of the industry (WTO, 1998).
99 Australian Customs Service (ACS) online information.  Available at:  http://www.customs.gov.au/
corp/manuals/vol12/text/div1set.htm [19 June 2001].
100 Entities and products involved include:  the Department of Agriculture, Fisheries and Forestry
(DAFF), through the Australian Quarantine and Inspection Service (AQIS) (prescribed goods, meat (game,poultry and rabbit), processed foods, fresh fruit and vegetables, grain, plants and plant products,
animals (including merino sheep), unprocessed wood, hardwood woodchips, forest products);  the Wheat Export
Authority (WEA) (wheat);  Horticulture Australia Ltd ( HAL) (apples, pears, nashi, citrus);  the Australian Wine
and Brandy Corporation (AWBC) (grape products);  and the Therapeutic Goods Administration (TGA)(therapeutic goods) (Australian Customs Service (ACS) online information.  Available at:http://www.customs.gov.au/corp/manuals/vol12/text/div4set.htm [19 June 2001]).Australia WT/TPR/S/104
Page 55
(c) Access-related export quotas
92. Export licensing to manage access-related import quotas has occurred, in very limited
situations, for agricultural products that are not  subject to single-desk arrangements.  For example, in
the case of access to the EC dairy quota for cheese, the ADC issues export licences;  and AFFA
manages quota allocation on behalf of the meat industry (EC and U.S. beef quotas).  Following
Chinese Taipei’s accession to the WTO, quota restrictions on apples, citrus, grapes, peaches, andplums were lifted, effective from 1 January 2002.
(iii) State trading
93. State involvement in the economy has continued with a view to assisting domestic production
and/or promoting or exclusively controlling/restraining almost all exports of certain agricultural
products such as dairy produce, grain, wheat, barley, rice, horticultural products, dried fruits, sugar,and wool (Table III.5).  Exports of almost all wh eat, barley (except in Victoria), rice, and sugar
remain subject to single-desk arrangements (exclusive control) through either grower-owned public
companies or State Government statutory authorities.  Domestic grain marketing is effectively
deregulated.  State trading in dairy products is limited to exports of bulk cheese and SMP to Japan and
exports of some cheeses to the EU.  On 1 March 2002, the ADC announced that single-desk sellingarrangements for cheese to Japan would cease on 30 June 2002.
Table III.5
State (Commonwealth or Territory) and other forms of privileged involvement in the economy, 2002
Entity ActivityDegree of state ownership/situation in
privatization programme
Goods
Agriculture
Australian Dairy Corporation (ADC)aImproving marketability and consumption
of Australian dairy products at home and
abroad;  trading in dairy productsIndependent Statutory Authority operating
under Federal Government legislation
Australian Dried Fruits Board (ADFB)aPromoting exports and consumption abroad
of dried vine fruit (no trading activities)The ADFB ceased operation in February
2001, and was replaced by a private,industry-owned corporation, Horticulture
Australia Limited/..
Australian Horticultural Corporation
(AHC)aEncouraging and coordinating export
marketing in the apple, pear, citrus andvarious other horticultural industries
(participation is voluntary) (no trading
activities)The AHC ceased operation in February 2001,
and was replaced by a private, industry-owned corporation, Horticulture Australia
Limited/..
AWB (International) LtdbInternational wheat marketer through singledesk arrangements for the benefit of growersWholly owned subsidiary of the public listed
grower-controlled company AWB Ltd
Australian Wool Research and PromotionOrganisationResearch and development and promotion
activitiesConverted into a corporations law company,
Australian Wool Services Ltd, effective from
1 January 2001
.
Wool InternationalacManagement and disposal of the wool
stockpile; debt management, disposal of
assets acquired by the former Australian
Wool CorporationPrivatized in July 1999 and incorporated as
WoolStock Australia Ltd .
Table III.5 (cont'd)WT/TPR/S/104 Trade Policy Review
Page 56
Entity ActivityDegree of state ownership/situation in
privatization programme
Queensland Sugar Limited (QSL)aManaging the acquisition and storage of
Queensland raw sugar by the Queensland
Government; negotiating arrangements for
shipping of raw sugar and distribution of
sales proceedsConverted to an industry-owned company
from 28 July 2000
Grainco Australia Ltd Queensland-based agri-business with single-
desk export rights for barley only (since1997) produced in Queensland.  Also agent
for vesting right of NSW Grains Board
grainsPublic unlisted company
New South Wales Grains BoardaMarketing oilseeds, barley, and sorghum State statutory authority (under
administration)/..
ABB Grain Export LtdaInternational  barley marketer throughsingle-desk arrangements in South Australia,
for the benefit of growers.  Single desk in
Victoria ceased June 2001Wholly owned subsidiary of the public
unlisted grower-controlled company ABB
Grain Ltd
.
Grain Pool of Western AustraliaaInternational  marketer of barley, lupins and
canola through single-desk arrangements in
Western Australia, for the benefit ofgrowers.  Commercial arm undertakes
domestic and international trade in a range
of grainsState statutory authority/..
New South Wales Rice Marketing
BoardaPromoting production and export of rice State statutory authority/..
Manufacturing (including food
processing)
Australian Wine and Brandy Corporation
(AWBC)aPromoting consumption and sales of
Australian wine, brandy, and grape spirit athome and abroad; improving domestic
production; promoting research (no trading
activities)Commonwealth statutory authority/..
Australian Technology Group Limited
(ATG).. ../..
Mining and energy ../..
Advance Energy Electricity distribution ../..
Aurora Energy Electricity distribution and retail sale ../..
Australian Inland Energy Electricity distribution ../..
CS Energy Electricity generator for the wholesale
electricity market../..
Delta Electricity Electricity generator operating mainly in the
wholesale electricity market;  undertakes
subsidized sales to certain customers../..
Energex Electricity retail sale ../..
EnergyAustralia Electricity distribution ../..
Ergon Energy Electricity retail sale ../..
Great Southern Energy Electricity distribution, supply of natural
gas, specialist engineering services, advice
on energy efficiency and electrical
appliances sales../..
Integral Energy Electricity distribution and retail sales (e.g.,
households)../..
Hydro-Electric Corporation Electricity generation, transmission,
distribution and retail sale;  also provides
system control and consulting services../..
Macquarie Generation Electricity generator undertaking subsidized
sales to certain customers../..
Table III.5 (cont'd)Australia WT/TPR/S/104
Page 57
Entity ActivityDegree of state ownership/situation in
privatization programme
NorthPower Electricity distributor ../..
Pacific Power Electricity generator ../..
Powerlink Operation of the Queensland high voltage
electricity transmission network../..
Queensland Power Trading Corporation Trading of electricity generated by private
operators../..
Snowy Mountains Hydro-electric
Authority (SMHEA)Electricity generation and transmission as
well as storage diversion and release of
water for irrigation purposes100%/..
Stanwell Corporation Electricity generator for the wholesale
electricity market../..
Tarong Energy Electricity generator for the wholesale
electricity market../..
Transend Electricity transmission ../..
TransGrid Management and development of the New
South Wales high voltage electricity
network../..
Western Power Electricity production, transmission and
distribution../..
AlintaGas Supply and distribution of gas ../..
Water ../..
Barwon Water Water supply and sewerage services ../..
City West Water Water ../..
Department of Natural Resources, State
Water ProjectsDevelopment and management of State
owned bulk water storage and distribution
infrastructure; water supply../..
Esk Water Authority Water supply, sewerage and trade waste
services../..
Hobart Regional Water Authority Bulk water supply ../..
Hunter Water Corporation Water supply, wastewater and drainage
services../..
Melbourne Water Corporation Water supply and sewerage services ../..
North West Regional Water Authority Water supply, collection and treatment ../..
South Australian Water Corporation Water supply and wastewater services ../..
South East Water Water supply and sewerage services ../..
Sydney Water Corporation Water supply and wastewater services ../..
Water Corporation Water supply, sewerage, drainage and
irrigation services../..
Yarra Valley Water Water supply, waste collection and sewerage
services../..
Services
Communications and media
Telstra Corporation Limited (Telstra) Telephone exchange lines, local and long
distance phone services, internationalservices, mobile telephone services, as well
as data, internet and on-line services51.1%/..
Australian Postal Corporation (Australia
Post)Letter/postal delivery, third-party agency
services, and retail sale of postal products100%/..
Table III.5 (cont'd)WT/TPR/S/104 Trade Policy Review
Page 58
Entity ActivityDegree of state ownership/situation in
privatization programme
Transport
Air
Sydney Airports Corporation Limited
(SACL)100%/..
Essendon Airport Limited (EAL) 100%/..
Airservices Australia Supply and management of air navigational
and air traffic services infrastructure../..
Sea
Albany Port authority (WA) 100%
Broome Port Authority (WA) 100%
Bunbury Port Authority 100%
Bundaberg Port Authority (Qld) 100%
Burnie Port Corporation Pty Ltd (Tas)Activity of port corporations:
Facilitation of the movements of ships
(water-side) and trains, and trucks (land-
side) through the port for the purpose of
ensuring the smooth transit of goods into
and out of Australia100%
Cairns Port Authority (Qld) 100%
Dampier Port Corporation (NT) 100%
Darwin Port Authority (WA) 100%
Esperance Port Authority (WA) 100%
Fremantle Port Authority (WA) 100%
Geraldton Port Authority (WA) 100%
Gladstone Port Authority (Qld) 100%
Hobart Port Corporation (Tas) 100%
King Island Port Corporation Pty Ltd
(Tas)100%
Mackay Port Authority (Qld) 100%
Melbourne Port Corporation (Vic) 100%
Newcastle Port Corporation (NSW) 100%
Port Hedland Port Authority (WA) 100%
Port Kembla Port Corporation (NSW) 100%
Port of Brisbane Corporation (Qld) 100%
Port of Devonport Corporation Pty Ltd
(Tas)100%
Port of Launceston Pty Ltd (Tas) 100%
Ports Corp Queensland (Qld) managing
the bulk ports of Abbot Point, Cape
Flattery, Hay Point, Karumba, Lucinda,
Mourilyan, Weipa, Quintell Beach(Community port only) and Thursday
Island (Community port only).100%
Rockhampton Port Authority (Qld) 100%
South Australian Ports Corporation 100%
Sydney Ports Corporation (NSW) 100%
Townsville Port Authority (Qld) 100%
Victorian Channels Authority (Vic) 100%
Rail
Australian Rail Track Corporation
Limited (ARTC).. 100%/..
Freight Rail Corporation of New South
WalesRail freight operations ../..
National:  Australian Rail Track Interstate rail track management 100%
Table III.5 (cont'd)Australia WT/TPR/S/104
Page 59
Entity ActivityDegree of state ownership/situation in
privatization programme
National:  National Rail Rail service operations 100%/being privatized
National Railway Corporation Inter-State rail freight services ../..
NSW:  Freight Corp. Rail transport operations 100%/being privatized
NSW:  Rail Infrastructure Corp. Rail track and related infrastructure
operations100%
Victoria:  VicTrack Rail and tram track and related infrastructure
operations100%
Urban transport
ACT:  ACTION Bus services 100%
Metro Tasmania Pty Ltd Bus services ../..
NSW:  State Rail Authority and State
Transit AuthorityCity and country rail, bus and ferry
operations100%
Queensland Rail Rail services 100%
Queensland Rail Railways Regional freight rail services and passenger
rail services in metropolitan/regional centres../..
South Australia Trans Adelaide Bus and tram services 100%
State Rail Authority of New South Wales
RailwaysCity and country rail passenger services ../..
State Transit Authority Bus and ferry services ../..
Tasmania:  Metro Tasmania Bus services 100%
TransAdelaide Bus, train and tram services ../..
Victoria:  V-Line Rail and coach services 100%
Victoria:  State Public Transport
CorporationBus and tram services 100%
Western Australia:  Westrail and
TransperthRail, bus and ferry services 100%
Westrail Railways Urban and regional passenger and freight
rail services..
Health
Medibank Private Limited (Medibank
Private).. 100%/..
Health Services Australia Limited (HSA) .. 100%/..
Other
ComLand Limited (ComLand) .. 100%/..
Australian Government Solicitor (AGS) .. 100%/..
Defence Housing Authority (DHA) .. 100%/..
Employment National (EN) .. 100%/..
.. Not available.
a Governmental or non-governmental entity that has been granted exclusive rights or privileges (Article XVII:4(a) of GATT and
paragraph 1 of the Understanding on the Interpretation of Article XVII);  entity notified to the WTO.
b On 1 July 1999 the statutory AWB ceased to operate and its subsidiary companies (including AWB (International) Ltd) became
grower owned and controlled;  at the same time a Wheat Export Authority (WEA) was established with functions to control
exports of wheat and monitor and report on the use of the monopoly by the pooling subsidiary AWB (International) Ltd.
c Wool International was privatized into an industry-owned company under Corporations Law in July 1999.
Source:   WTO (1998), Trade Policy Review – Australia , Table III.7;  WTO document G/STR/N/4/AUS - G/STR/N/5/AUS,
10 October 2000;  Australian National Audit Office (2000), The Auditor-General Audit Report No. 15 2000–2001
Performance Audit Agencies’ Performance Monitoring of Commonwealth Government Business Enterprises[Online], November.  Available at:  http://www.anao.gov.au [28 February 2001];  Productivity
Commission (2000), Financial Performance of Government Trading Enterprises 1994-95 to 1998-99, Table A.1
[Online], 12 July, Ausinfo.  Available at:  http://www.pc.gov.au/service/gte/perf9899/ [8 March 2 001].WT/TPR/S/104 Trade Policy Review
Page 60
94. Government trading entities (GTEs) in electricity, gas, water, sewerage, drainage, irrigation,
urban transport, railways, ports, air services, post, and telecommunication generated total revenue
equivalent to 8% of GDP in 1998/99.101  As indicated earlier (section (2)(vi)), government business
enterprises (e.g., Telstra Corporation) and statutory authorities (e.g. Air services Australia) are
expected to consider industrial development objectives such as developing local industry capabilities
and export potential in their procurement activities.
95. Australia met its latest WTO notification requirements on state-trading enterprises in
September 2000 (full notification);  as usual, its notification covered exclusively the nine
organizations/boards with statutory marketing power s involved in agricultural trade (Table III.5).102
(iv) Export assistance
96. Despite public spending cuts as part of the fiscal consolidation programme (Chapter I),
between 1997/98 and 2000/01, different forms of direct financial, tax or institutional assistance to
exports of goods and services followed an overall upward trend, largely due to increased support for
exports of primary and mining products as well as certain services (Table III.6).  By contrast,
assistance to exports of manufactured goods declined.
(a) Marketing and promotion grants
97. Since its previous Review, Australia has maintained export assistance under its Export Market
Development Grants scheme (EMDG).  Under this scheme, the Government gives taxable grants to
qualifying small and medium-size enterprises (SME s) of up to $A 200,000 to assist in partially
reimbursing (up to 50%) eligible expenditure (marketing and promotion costs) incurred when
developing export markets for goods, services, industrial property rights, and technology with
substantial Australian content (section (2)(vii)).103  In 1999-00, the EMDG scheme distributed grants
worth $A 136 million to 3,000 exporters;  66% of SME recipients had turnovers of less than$A 5 million.
104  Taking into account the positive results from a Price Waterhouse Coopers report, the
econometric analysis and evidence provided by the private sector , the EMDG scheme, which is
administered by Austrade, is being continued until 2005/06.105
98. A Supermarket to Asia  (STA) Strategy was introduced in 1996 to improve the
competitiveness of Australia's food exports to Asia;  it was aimed at increasing employment by10,000 jobs and food exports to the region to $A 16 billion by the year 2002.
106  Over a three-year
period from 1999/00, $A 23.7 million was allocated to new STA activities, such as the Food and Fibre
Chains Programme ($A 9.2 million) and the New Industries Development Programme
($A 3.1 million), or old activities such as the AQIS Technical Market Access Programme
($A 6.6 million).
                                                     
101 Productivity Commission (2000c).
102 WTO document G/STR/N/4/AUS - G/STR/N/5/AUS, 10 October 2000.
103 In 2001, the $A 20,000 minimum expense requirement was reduced to $A 15,000.
104 Australian Department of Foreign Affairs and Trade (undated b);  and Australian Trade
Commission (Austrade) online information.  Availabl e at:  http://www.austrade.gov.au/ExportAssistance/
index.asp?PageID=51305 [18 April 2001].
105 Australian Trade Commission (2000).
106 Agriculture, Forestries and Fishery Australia (AFFA) online fact sheet.  Available at:
http://www.affa.gov.au/corporate_docs/publications/html/factsheets/supermasia.html [20 March 2001].Australia WT/TPR/S/104
Page 61
Table III.6
Commonwealth assistance to exporters of goods and services, 1997-02
($A million)
1997/98 1998/99 1999/00 2000/01a2001/02a
General export measures 549 543 546 579 605
of which:
(i)  primary products (DFA, FI) 55 53 58 63 69
(ii) manufacturing sector 229 208 201 212 32
- food, beverages and tobacco (DFA) 7 8 8 9 9
- textiles, clothing, footwear and leather (DFA, FI, TE) 19 16 15 17 17
- wood and paper products (DFA, TE) 4 3 3 <3 <3
- printing, publishing and recorded media (DFA) 3 3 3 3 3
- petroleum, coal, chemical and associated products (DFA, FI, TE) 9 10 10 11 11
- non-metallic mineral products (DFA, TE) 3 2 2 <2 <2
- metal product manufacturing (DFA, TE) 10 8 9 6 6
- motor vehicles and parts (FI, DFA, TE) 4 18 19 70 70
- other transport equipment n.a. n.a. n.a. n.a. ..
- other machinery and equipment (DFA, TE) 61 32 31 20 20
- other manufacturing (DFA, TE) 17 13 14 21 21
- unallocated manufacturing (DFA, TE) 92 95 87 50 70
(iii) services sector 247 266 266 290 288
- electricity, gas, and water supply (DFA) <1 <1 <1 <1 <1
- construction (DFA, FI, TE) 22 24 27 30 30
- wholesale trade (DFA, TE) 15 15 12 17 17
- retail trade (DFA, FI) 22 25 24 23 23
- accommodation, cafés and restaurants (DFA, FI) 28 32 33 37 37
- transport and storage (DFA, FI, TE) 48 52 49 48 48
- communication (DFA, FI) 19 20 22 25 23
- finance and insurance (DFA) <1 <1 <1 <1 <1
- property and business services (DFA) 22 23 22 24 24
- government administration and defence (FI) 2 2 2 3 3
- education (DFA, FI) 20 20 18 20 20
- health and community services (DFA) <1 <1 <1 <1 <1
- cultural and recreational services (DFA, FI) 25 28 29 33 33
- personal and other services (DFA) 1 1 1 1 1
 - unallocated services (FI) 20 21 24 26 26
(iv) mining sector (DFA, FI) 8 9 10 11 11
(v)  unallocated otherb (FI) 10 7 11 3 5
.. Not available.
n.a. Not applicable
a Estimates.
b Includes programmes or amounts of funding where the industry is not stated or recipients are unknown.
Note: DFA:  direct financial assistant;  FI: funding to institutions;  TE: tax expenditures.  To calculate the total, data given  as
"<A$1 million" " have been read as $A 1 million.
Source: Productivity Commission (2001 ), Trade & Assistance Review 2000-01, Tables 4.3, 4.4, 4.5, 4.6, 4.7 and 4.8
[Online], 12 December, Annual Report Series 1999-2000, AusInfo.  Available at:
http://www.pc.gov.au/research/annrpt/[11 June 2002].WT/TPR/S/104 Trade Policy Review
Page 62
(b) Duty and tax concessions/credit
99. In addition to duty and internal tax concessions on certain imported
components (section (2)(ii) (i)), Australia has made a few changes to its drawback schemes since its
previous Review.
100. As indicated earlier, in June 2000 Australia replaced its Tariff Export Concession (TEXCO)
and part of its duty drawback schemes with Tradex.107  Tradex removed the TEXCO requirement that
goods must undergo industrial processing as a condition of eligibility;  it provides exporters with an
up-front exemption from customs duties and goods and services tax (except excise) on imported
goods that are processed or warehoused prior to export.  Tradex costs more than $A 100 million per
year in terms of revenue forgone, and is used by firms across several sectors.108
101. Duty drawback payments were relatively stab le at just under $A 95.2 million in 1998/99109;
in 2000/01 they dropped to $A 70.3 million.
102. The Passenger Motor Vehicle Export Facilitation Scheme (EFS) expired on
31 December 2000110, and was replaced by the Automotive Competitiveness and Investment Scheme
(ACIS), which also provides for transferable import duty credits to be redeemed on imports by
eligible automotive producers over a five-year period commencing on 1 January 2001.  In contrast tothe EFS, the ACIS does not involve any overt e xport contingency requirements and emphasis is on
investment encouragement.
(c) Free-trade export zones and similar schemes
103. Since 1986, the Darwin Trade Development Zone has operated as a free-trade zone (FTZ)
with a view to fostering close working relationships with other industrial estates and export-
processing zones within Asia, particularly the eastern States of Indonesia.
111  Incentive packages,
individually tailored to each prospective company, include subsidies for many up-front property,plant, and equipment costs, as well as relocation assistance.  Recipients include manufacturers of:
knitted textiles;  cardboard and packaging;  colour reprographics;  computer software development;
beer for Asia;  fish emulsion and plant food;  and engineering-based manufactures.  The operation of
the zone is under review.  No further information on the set of incentives and the
employment/production/trade benefits from operating the zone were available from the authorities.
104. As from March 1998, a manufacture-in-bond scheme (MiB) has provided for exemption from
customs duty and sales tax on goods imported into a warehouse, licensed by Customs, provided that
the goods are subsequently re-exported (either in original or modified form);  the scheme has also
provided for deferral of customs duty and sales tax on goods imported into any MiB warehouse and
subsequently sold on the domestic market.
112  The advantage over the existing Darwin FTZ structure
                                                     
107 Duty drawback remains available for imported goods whenever it is not known at the time of import
whether they will be exported or not.
108 Productivity Commission (2000d).
109 Productivity Commission (2000b).
110 EFS export subsidization was in the form of duty rebate/credits, which recipients could use to offset
their duty liability on imports of specified automotive products.  The level of the duty credit was determined bythe value of any qualifying exported product and there was no requirement that the imported products be
physically incorporated into the exported product.  Imports of finished vehicles for consumption on the
Australian market were fully eligible for duty rebates under this scheme.  The subsidy benefits were freelytransferable and could be sold among participants in the programme (European Commission (undated)).
111 U.S. Department of Commerce (1999).
112 Productivity Commission (2000b).Australia WT/TPR/S/104
Page 63
is that export manufacturers are no longer required to make up-front customs, excise, and sales tax
outlays on imported components and materials.  Although one site was originally selected, the MiB
scheme has seemingly not been widely used so far.
(d) Export finance, guarantees, and insurance
105. Since 1956, the Export Finance and Insurance Co rporation (EFIC), a self-funding statutory
authority operating in accordance with commercial principles, has provided export credit insuranceand trade finance services that are not consistently available from commercial markets,  and on terms
and conditions that are directly competitive with other countries offering finance from their respective
Export Credit Agencies.  The EFIC's areas of support include:  export credit insurance for major
commodity exports to markets that are believed to be difficult to penetrate;  finance for large capital
goods and project exports to emerging markets;  political risk insurance and loan facilities for largeresource development projects;  and facilities for SMEs.  The EFIC's means of support include direct
loans (to buyers);  export finance guarantees (to banks financing contracts with buyer);  payments
insurance (against non-payment by the buyer);  and political risk insurance.  These services have
continued to be  provided through the Commercial Account
113, and the National Interest Account, in
which EFIC is instructed to undertake transactions considered to be in the national interest.114  EFIC's
obligations to third parties are guaranteed by the Commonwealth, although this guarantee has never
been called.
106. In March 2000, the Export Finance and Insurance Corporation Amendment Act 2000 was
passed to apply "competitive neutrality" principles to the EFIC’s short-term-credit insurance business
(section 4(iii)(a)).  "Competitive neutrality" measur es that now apply to the EFIC include a taxation
equivalency regime on its credit insurance business and the EFIC becoming subject to the Insurance
Contracts Act 1984, the Insurance (Agents and Brokers) Act 1984, and a requirement to preparefinancial accounts in accordance with the relevant requirements of the Insurance Act 1973.  The EFIC
is subject to a debt neutrality charge and guarantee fee payments to the Government, subject to
directions by the Minister for Trade.
107. Following a review completed in 2000, the Gove rnment determined that the private market
for export credit insurance had expanded significantly.  A major outcome of the review was that,following a competitive tender process, the EFIC  entered into an Alliance with Gerling NCM, an
international export credit insurer.  The Alliance relates to EFIC's short-term export credit insurance
business.  Under the terms of the Alliance, Gerlin g NCM is expected to demonstrate its capacity to
improve short-term export-credit insurance services for Australian exporters.  Subject to this being
demonstrated to the Government’s satisfaction, the credit insurance business is to be divested toGerling NCM.  The Government review of the EFIC 's medium-long term business determined that the
EFIC would continue to provide medium-long term facilities in the absence of significant private
                                                     
113 In the case of the Commercial Account, the risks underwritten are carried by EFIC as a corporation;
premiums and other fees are retained by EFIC and any losses are borne from EFIC’s accumulated capital and
reserves.
114 In the case of the National Interest Account, the Minister for Trade can direct EFIC or approve of
EFIC entering into a facility if the Minister believes that it would be in the "national interest" to do so.  Thefacility may be a loan, a guarantee, an insurance policy, etc.  If EFIC suffers a loss in relation to a nationalinterest transaction, the Commonwealth reimburses EFIC for that loss.  National interest transactions tend to
involve financial commitments that are too large for EFIC’s  balance sheet;  or risks that EFIC considers are too
high for it to accept prudently on its own account; or transactions that would be commercially acceptable if
EFIC did not already have significant exposures to a country or entity.  The National Interest Account is onlyused in exceptional circumstances as a last resort, and its use in recent years has been minimal.  Significant
national interest medium to long term export and project finance facilities are detailed in EFIC’s Annual Report
and reported in the Commonwealth Gazette  on a quarterly basis (Productivity Commission, 2000d).WT/TPR/S/104 Trade Policy Review
Page 64
market activity, and to ensure that Australian expor ters had access to the types of support available to
exporters from other OECD countries.  The EFIC is  required to conform to the OECD Arrangement
on Guidelines for Officially Supported Export Credits, and is subject to Australian content
requirements (section (2)(vii)) and its own environmental protection requirements (section (4)(v)).
108. During 2000/2001, the EFIC supported exports totalling $A 6.7 billion on its Commercial
Account.  Credit insurance against non-payment represents the bulk of the EFIC's cover($A 6.4 billion).  The EFIC’s business is returning to a pre-Asian-crisis level, as commercial sector
cover returns to Asia;  in 1999/00, the EFIC suppor ted some $A 2.0 billion exports to Asia, down
30% from pre-crisis levels.  In 1999/00, $A 511 mi llion of exports (mainly to Korea and Indonesia)
were supported on the National Interest Account, mainly for wheat.
115  The EFIC achieved a profit
after tax of $A 9.4 million, maintaining its record of profitability in all but one year since 1991.  Inrecent years, the EFIC recommended the payment to  the Government of a dividend of 50% of profits.
(e) WTO notification
109. Certain export assistance programmes (e.g. Te xtile Clothing and Footwear Import Credits
Scheme (until 30 June 2000), Passenger Motor Vehicle (PMV) Export Facilitation Scheme (until end
2000), Export Market Development Grants Scheme), which were discussed at the previous TPR ofAustralia, have seemingly not been notified to the WTO Committee on Subsidies and Countervailing
Measures;  Australia considers that these schemes do not require notification, but responded to
questions relating to the three schemes within the WTO Committee on Subsidies and Countervailing
Measures on several occasions.  In December 2000, Australia notified the new Automotive
Competitiveness and Investment Scheme and the Textiles, Clothing and Footwear Strategic
Investment Programme to the WTO Committee on Subsidies and Countervailing Measures.
116
(4) MEASURES AFFECTING PRODUCTION AND TRADE
(i) Taxation
110. Australia relies on direct taxes for more than two thirds its tax revenues;  personal and
corporation taxes accounting for 37.4% and 17%, respectively, of total tax revenues.  Sales taxes are
the main indirect tax component followed by excise taxes;  taxes on international trade (customs
duties, levies on domestic agricultural produce) contributed a mere 2.2% to total tax revenues in2000/01 (Table III.7).
Table III.7
Structure of tax revenue, 1996-01
(Per cent and $A million)
1996/97 1997/98 1998/99 1999/00 2000/01
Total taxes ($A million) 160,761 169,353 182,073 197,774 205,167
(Percentage share)
Direct taxes 67.2 67.1 67.6 69.0 65.5
Taxes on income 56.2 56.2 56.6 58.7 54.9
Individuals 41.2 41.7 41.6 40.8 37.4
Net tax instalments 35.2 35.6 35.6 35.5 30.9
Other 6.0 6.1 6.0 5.3 6.4
Table III.7 (cont'd)
                                                     
115 Australian Department of Foreign Affairs and Trade (undated b).
116 WTO document G/SCM/N/60/AUS/Rev.1, 19 December 2000.Australia WT/TPR/S/104
Page 65
1996/97 1997/98 1998/99 1999/00 2000/01
Resident corporations 14.3 13.9 14.4 17.2 17.0
Non-residents 0.6 0.6 0.6 0.6 0.6
Payroll taxes 4.6 4.6 4.6 4.5 4.6
Fringe benefit taxes 1.9 1.8 1.8 1.7 1.9
Land taxes 1.0 1.0 1.1 1.0 1.0
Municipal and metropolitan improvement rates 3.5 3.4 3.6 3.1 3.1
Indirect taxes 32.8 32.9 32.4 31.0 34.5
Taxes on financial and capital transactions 4.4 4.6 4.6 4.9 4.6
Sales taxes 8.3 8.3 8.4 7.9 n.a.
Goods and services tax n.a. n.a. n.a. n.a. 12.5
Excise taxes 8.9 8.5 8.1 7.4 9.5
Taxes on international trade 2.0 2.2 2.1 1.9 2.2
Taxes on gambling 2.2 2.2 2.3 2.2 1.8
Taxes on insurance 1.1 1.2 1.1 1.1 1.2
Motor vehicle taxes 2.1 2.2 2.2 2.0 2.0
Franchise taxes 3.2 3.0 3.1 3.0 n.a.
Gas and petroleum products 1.0 0.9 0.8 0.8 n.a.
Tobacco and liquor 2.3 2.1 2.3 2.1 n.a.
Other taxes 0.6 0.7 0.6 0.6 0.7
n.a. Not applicable.
Source: Australian Bureau of Statistics, National Income, Expenditure and Product  (various issues), 5206.0, Canberra.
(a) Indirect taxation
111. As indicated in Chapter I, major reform of the indirect tax system was undertaken in
July 2000.  The centrepiece of this reform involved abolition of the Wholesale Sales Tax (WST)117
levied on manufactured goods and its replacement with a broad-based Goods and Services Tax (GST)levied at the rate of 10%.
118  A variety of other indirect taxes were also eliminated (e.g.
accommodation taxes, the financial institutions duty, the stamp duty on marketable securities, statefranchise taxes, from 1 July 2000) and a few new taxes on specific goods were introduced.  The
outcome was not only the removal of the WST's intrinsic bias in favour of imports and against exports
of manufactured goods, but also a levelling of the playing field between goods and services.  Hence,
Australia currently levies the following indirect taxes:
- a 10% Goods and Services Tax (GST) on the value-added at each point in the
production and distribution chain for all goods and services, as from July 2000
119;
                                                     
117 The WST was levied at a general rate of 22%;  certain categories of goods were subject to rates of
12% (household goods) and 32% (luxury goods).
118 The GST is collected by the Commonwealth and paid to the States.
119 The valuation basis for the GST on imported goods is the c.i.f. value plus customs duties and any
wine tax. The Australian Taxation Office (ATO) operates a scheme that provides for the deferral of GST on
imported goods.  Most education, eligible childcare and health services, as well as medical appliances, cars forcertain disabled people, basic foodstuff (meat, fruit, and vegetables), imports under certain customs concessionsand exports are among the items exempt from GST (Australian Customs Service online information.  Availableat:  http://www.customs.gov.au/taxref/imports.htm [5 April 2001]).WT/TPR/S/104 Trade Policy Review
Page 66
- an additional special Luxury Car Tax (LCT) of 25% on vehicles with a retail value
above a GST-inclusive and CPI-linked threshold equal to the car depreciation limit
($A 55,134 for 1999/00 and 2000/01) (since 1 July 2000)120;
- a 29% Wine Equalisation Tax (WET) on grape wine, fruit wine, vegetable wine,
perry, mead, sake, cider, and grape wine products including vermouth, marsala, wine
cocktails and creams (since July 2000)121;  and
- excise taxes on the production, manufacture, sale or distribution of petroleum, certain
alcohol, tobacco, and crude oil (Table III.8).
Table III.8
Excise rates
CommodityRates
applying
from
1.07.2000
($A)Rates
applying
from
1.08.2000
($A)Rates
applying
from
1.02.2001
($A)Rates
applying
from
2.03.2001
($A)Rates
applying
from
4.04.2001
($A)Rates
applying
from
1.08.2001
($A)Rates
applying
from
1.02.2002
($A)
Petroleum (per litre)
Leaded petrol 0.39725 0.40400 0.42016 0.40516 0.40516 0.40516 0.40516
Unleaded petrol 0.37481 0.38118 0.39643 0.38143 0.38143 0.38143 0.38143
Diesel (gross) 0.37481 0.38118 0.39643 0.38143 0.38143 0.38143 0.38143
Aviation gasoline 0.02759 0.02806 0.02918 0.02808 0.02808 0.02808 0.02808
Aviation turbine fuel 0.02795 0.02843 0.02957 0.02845 0.02845 0.02845 0.02845
Fuel oil 0.07426 0.07552 0.07854 0.07557 0.07557 0.07557 0.07557
Heating oil 0.07426 0.07552 0.07854 0.07557 0.07557 0.07557 0.07557
Kerosene 0.07426 0.07552 0.07854 0.07557 0.07557 0.07557 0.07557
Beer (per litre of alcohol
over 1.15%)
Draught beer, low
strengtha41.67 42.38 44.08 44.08 15.96 16.26 16.46
Draught beer, mid
strengtha35.38 35.98 37.42 37.42 17.33 17.66 17.87
Draught beer, high
strengtha30.46 30.98 32.22 32.22 22.68 23.11 23.39
Other beer, low strengtha41.67 42.38 44.08 44.08 44.08 44.92 45.45
Other beer, mid strengtha35.38 35.98 37.42 37.42 37.42 38.13 38.59
Other beer, high strengtha30.46 30.98 32.22 32.22 32.22 32.83 33.22
Potable spirits (per litre of
alcohol)
Brandy 48.17 48.99 50.95 50.95 50.95 51.92 52.54
General rate for otherspirits51.58 52.46 54.56 54.56 54.56 55.60 56.27
Cigarettes (per stick) 0.19155 0.19481 0.20260 0.20260 0.20260 0.20645 0.20893
Tobacco products (per kg.) 239.44 243.51 253.25 253.25 253.25 258.06 261.16
a Rate applied per litre of alcohol on the amount by which the alcohol content (by volume) exceeds 1.15%.
Source: Government of Australia.
                                                     
120 Motor homes, luxury camper vans, and commercial vehicles not principally designed to carry
passengers are not subject to this tax. No input tax credit is available for LCT, regardless of whether the luxurycar is used within the business or for private pur poses (Australian Customs Service online information.
Available at:  http://www.customs.gov.au/taxref/imports.htm [5 April 2001]).
121 Wine and other similar fermented beverages were previously subject to WST at 41%.Australia WT/TPR/S/104
Page 67
112. The authorities consider that the New Tax System (Chapter I) is especially beneficial to
exporters of goods and services;  it is estimated that the removal of the anti-export bias, intrinsic to the
WST, reduced Australian exporters' business costs by over $A 3.5 billion per year, as tax credits may
be claimed for the GST paid on this inputs.122  According to a major WTO Member, the LCT seems to
be discriminatory as its burden falls disproportionately on imported cars, whose prices in Australia,
already reflecting high import tariffs, tend to be higher than those of locally manufactured vehicles.123
No official estimates on the makes and models affected by the LCT are available from the authorities.
Under the New Tax System, some seemingly distorti ng State (i.e. sub-Commonwealth), indirect taxes,
(bank accounts debits tax (until 2005)) and some stamp duties are being phased-out.124
113. Levies are also collected upon the sale of several domestic (unprocessed) agricultural and
livestock items destined for local consumption or export;  revenue from these levies is channelled tosectoral funds (Chapter IV, Table AIV.2).
(b) Direct taxation
114. The company tax rate was reduced from 36% to 34% in 2000/01 and to 30% as of mid
2001.
125  Special deductions have been maintained for companies involved in mineral exploration and
development activities (Chapter IV) as well as for R&D, for which rebate rates were expanded to175% (Table AIV.5).  A payroll tax applies to paid or payable wages at sub-Commonwealth level (i.e.
States and Territories);  rates range between 3.65% and 7%, and some States have progressive
marginal rates or a deduction system, or both.  A 48.5% Fringe Benefits Tax (FBT) is levied on the
value of certain fringe benefits employers provide to their employees such as a right (including a
property right), privilege, service or facility (e.g. the provision of company cars, subsidized
accommodation and travel, entertainment and the like);  as from April 2000, housing benefits granted
by any sector in remote areas have been fully exempt from this tax.
126
115. Among the important changes under The New Tax System (Chapter I) was the introduction of
the Pay As You Go (PAYG) system for income tax instalments127, lower personal income tax
thresholds, reduced income tax rates, and the abolition of provisional tax.  A new tax rebate for
private health insurance was introduced in January 1999.
(c) Appraisal of tax concessions
116. While the corporate income tax is primarily a backstop to the personal income tax, it is also
an important instrument of economic policy.  The provision of various forms of tax relief for different
purposes means that, in some instances, effective ta x rates are considerably lower than the statutory
rate and thus that some activities or sectors are favoured relative to others.  The resulting tax revenues
forgone constitute "tax expenditures";  that is, assistance to companies delivered through the tax
                                                     
122 Australian Department of Foreign Affairs and Trade (undated b).
123 European Commission (undated).
124 Australian Department of Foreign Affairs and Trade (undated b);  and OECD (2000).
125 Australian and New Zealand Minerals and Energy Council (undated).
126 Australian and New Zealand Minerals and Energy Council (undated).
127 PAYG is a single, integrated system for reporting and paying income tax instalments; it replaced
11 existing systems, including the provisional tax (Australian Taxation Office online information.  Available at:http://www.taxreform.ato.gov.au/indihome/index.htm [17 April 2001]).WT/TPR/S/104 Trade Policy Review
Page 68
system.128  Tax expenditures are recognized as an alternative to direct expenditures (or regulations) as
a method of delivering government assistan ce or meeting government policy objectives.
117. In order to enhance fiscal transparency, Au stralia is one of 14 OECD countries whose
national governments publish periodically detailed information on tax expenditures. 129  In the case of
Australia, publication of such information is currently a requirement of the Charter of Budget Honesty
Act 1998 .  The latest Tax Expenditures Statement  identifies around 250 tax expenditures provided by
the Commonwealth Government, 110 of which pertain to businesses.  The main ones concerning
business are R&D tax concession, accelerated depreciation, the 10% development allowance (until
July 2002) for plant and equipment, sectoral export facilitation and import credit schemes provided to
motor vehicles, textiles, clothing, and footwear industries, and the duty drawback scheme.  These
measures are available to domestic and foreign firms alike.  The largest recipient of business taxexpenditures has been the manufacturing sector, which had previously been disadvantaged by the
Wholesale Sales Tax (WST)  Manufacturing accounted for around 60% of total revenue forgone
while the primary sector and services received 22% and 14%, respectively.  The total amount of tax
revenue forgone as a result of various forms of tax relief to businesses was estimated to be over
$A 5 billion in 1999-00, up from $A 4.7 billion the previous year.  The total is projected to increaseeven further to $A 5.8 billion in 2000-01, after which it is expected to fall sharply.  This fall may be
partly due to the base broadening (e.g. removal of accelerated depreciation for certain plant and
equipment and tax payers) and statutory corporate tax rate cuts undertaken in connection with tax
reform (Chapter I).
118. Little information was available on the cost-effectiveness of these tax expenditures in
attaining their stated objectives, although some, such as the R&D tax concession, have been
occasionally referred to independent bodies for evaluation.
130  In the absence of any convincing
evidence to the contrary, experience in other countries suggests that such measures are seldom cost-
effective.131  They run the risk of subsidizing good investments, which need no such assistance and
would have been undertaken anyway, or turning bad investments into profitable ones.  To the extent
that tax expenditures have stimulated investment in the latter, they may well have unduly distorted the
allocation of resources. Even in instances where the market may fail to finance good investments, asin the case of R&D, for example, it is unclear whether tax expenditures can effectively address such
"market failure".
(ii) Production assistance
119. Since its previous Review, Australia has continued to provide widespread assistance to
domestic producers generally in the form of tax incentives (sections (2)(ii) (i) and (3)(iv)), grants, and
concessional loans as well as by means of State involvement in trade, and the imposition of local-
content requirements (sections (2)(vii) and (3)(iii)).  Support has been largely focussed on R&D,
export promotion, and investment, and to a lesser extent in structural adjustment (Table III.9);  overall
                                                     
128 A tax expenditure is defined as a tax concession that is designed to provide a benefit to a specified
activity or class of taxpayer.  Tax expenditures can be delivered in a variety of ways:  by a tax exemption, taxdeduction, tax rebate, reduced tax rate or by deferring a tax liability (Commonwealth of Australia, 2001).
129 OECD (1996).
130 On the basis of its evaluation of the R&D tax concession, the Industry Commission concluded that
the benefits of the measure outweighed the costs and thus recommended continuation of the concession, albeit in
a somewhat modified form (Industry Commission, Research and Development , Report No. 44, 15 May 1995).
Subsequently, the associated tax deduction was cut back from 150% to 125% of eligible R&D expenses and, asindicated earlier, a new tax concession rate of 175% was introduced.
131Most econometric studies show that forgone tax revenues exceed the increase in desired investment,
(OECD, 1995).Australia WT/TPR/S/104
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budgetary spending has risen considerably as a result of increased emphasis on tax measures and
R&D support.  Budgetary assistance has varied markedly between sectors;  in 1999/00, the largest
proportion of assistance was directed to the manuf acturing sector (41%) while services and primary
production received 27% and 21% respectively.132
Table III.9
Overall budgetary assistance, 1997-02
($A million)
1997/98 1998/99 1999/00 2000/01 2001/02
Total budgetary assistancea3,399 3,450 3,598 3,655 3,856
Budgetary outlays 1,795 1,851 1,906 1,868 2,082
Tax expenditures 1,604 1,600 1,693 1,786 1,774
Assistance categoriesb
Research and development 1,201 1,221 1,360 1,357 1,464
Export 1,030 1,074 1,059 1,075 875
Investment 434 487 462 406 345
Sectoral and adjustment assistance 324 271 251 258 241
Other industry-specific assistance 409 397 467 559 932
a Figures may not add to total due to rounding.
b The assistance categories include general as well as specific schemes targeting an activity within an industry.  For example, the
export assistance category would include broad-based export measures (such as the Export Market Development Grants scheme)
as well as industry measures (s uch as the TCF Import Credits Scheme), which also facilitate export.  The sectoral and adjustmen t
assistance category covers programmes specifically benefiting producers in a sector or facilitating adjustment.  The other
industry-assistance category covers measures (such as bounties) not already included in the above categories.
Source: Productivity Commission (2001), Trade & Assistance Review 2000-2001, Table 4.3 [Online], 11 December,
Annual Report Series 2000-01, AusInfo.  Available at: http://www.pc.gov.au/9900/ [28 February 2002].
120. In the light of WTO-related commitments, Australia has established sunset clauses for several
incentives notified to the WTO (Tables III.9 and AIV.5).  Since 1998, it has notified part of its
support programmes to the WTO Committee on Subsidies and Countervailing Measures;  its latestnotification (December 2001) listed 21 programmes in force (9 in 1997).
133  As from 1999, Australia
has notified the operation of certain sub-Commonwealth (State or Territory)
programmes (Table III.10).134  It has received questions from the EU and the United States on
virtually all its support measures. 135
                                                     
132 Productivity Commission (2000d).
133 WTO documents:  G/SCM/N/25/AUS, 9 July 1997; G/SCM/N/38/AUS - G/SCM/N/48/AUS -
G/SCM/N/60/AUS, 11 May 2000;  and G/SCM/N/71/AUS, 4 December 2001.
134 WTO document G/SCM/M/25, 22 September 2000.
135 WTO documents G/SCM/Q2/AUS/17, 13 October 2000; G/SCM/Q2/AUS/18,  2 November 2000;
and G/SCM/Q2/AUS/19, 7 June 2001.WT/TPR/S/104 Trade Policy Review
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Table III.10
Subsidies notified under WTO provisions, 1995-01
($A million)
Type of subsidyExpiry
date1995/96 1996/97 1997/98 1998/99 1999/2000 2000/01
I. Federal Programme
Agriculture
Dairy Market Support
SchemeDirect payment for
manufacturing milk
production30.06.00 .. 1.99438
cents per
litre of
milk1.77574
cents per
litre of
milk1.52653
cents per
litre of
milk0.90458
cents per
litre of
milkn.a.
Dairy Industry Adjustment
PackageGrant 8 years
beginning
2000/01n.a. n.a. n.a. n.a. n.a. ..
Tasmanian Wheat Freight
SubsidyGovernment grant Undefined 2.2 1.2 1.2 1.2 1.2 1.2
Manufacturing industry
Pharmaceutical Industry
Investment ProgrammeDirect payment 30.06.04 n.a. n.a. n.a. n.a. 39 33.4
Printing Industry
Competitiveness Scheme4% of the paper purchase
price for all paper used inthe production of eligible
books30.06.03 .. 13.242 7.410 0.345 ..
Enhanced Printing Industry
Competitiveness SchemeGrant 30.06.04 n.a. n.a. n.a. n.a. n.a. 5.9
Machine tools & robots Direct payment 30.06.97 .. 5.534 3.853 0.25 n.a. n.a.
Automotive
Competitiveness &
Investment SchemeDuty credit 31.12.05 n.a. n.a. n.a. n.a. n.a. 240
Shipbuilding bounty Bounty on eligible
production costs31.12.00a23.7 22.5 19.1 24.2 18.5 13.5
Shipbuilding Innovation
SchemeDirect payment eligible
R&D spending30.06.04 n.a. n.a. n.a. n.a. 18.5 7.8
Textile yarns Bounty 30.06.95 .. 9.0 n.a. n.a. n.a. ..
Textiles, Clothing & Foot-
wear Strategic Investment
Programme SchemeGrants 30.06.05 n.a. n.a. n.a. n.a. n.a. 9
Investment
Invest Australia:  Investment
IncentivesGrants, tax relief,
provision of
infrastructure servicesUndefined n.a. n.a. .. .. .. 9.7
Investment Feasibility Study
FundGrants Undefined n.a. n.a. n.a. n.a. .. 0.6
II. Sub-Federal
Programme
Total 140 63 56 72 88.86 ..
No. of companies/packages
offered98 116 102 99 227 666
Table III.10 (cont'd)Australia WT/TPR/S/104
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Type of subsidyExpiry
date1995/96 1996/97 1997/98 1998/99 1999/2000 2000/01
Australian Capital
Territory
A.C.T. Business Incentive
SchemeTax concessions, others
possibleUndefined .. .. .. .. .. ..
New South Wales
Industries Assistance Fund
(IAF).. Undefined .. .. .. .. .. ..
Regional Business
Development SchemeGrants Undefined .. .. .. .. .. ..
RBDS .. Undefined .. .. .. .. .. ..
Northern Territory
Industry & Business
AssistanceGrants Undefined .. .. .. .. .. ..
Queensland
Queensland Investment
Incentives SchemeRefunds, grants 2004 .. .. .. .. .. ..
Queensland Industry
Development SchemeGrant July 2002 .. .. .. .. .. ..
South Australia
Industry Investment &
Attraction FundGrants, concessional
loans, stamp duty,
payroll tax exemptionsUndefined .. .. .. .. .. ..
Tasmania
Investment Attraction
ProgrammeGrants, concessional
loans, payroll taxexemptions, rental
assistance, reduced
stamp duty, workforcetraining and development
or feasibility/technical
studiesUndefined .. .. .. .. .. ..
Victoria
Investment Attraction
ProgrammeTaxable grants to offset
payroll and land tax,
provision of
infrastructure and
assistance with trainingUndefined .. .. .. .. .. ..
Western Australia
Industry Incentive Scheme Capital grant,
concessional loansUndefined .. .. .. .. .. ..
Industry Relocation Scheme Grants, loans Undefined 0 0 0 0 0 0.5
.. Not available.
n.a. Not applicable.
a A phasing out arrangement applies to vessels that are contracted for sale on or before 31 December 2000, and are delivered on or
before 31 December 2003.
Source: WTO documents G/SCM/N/38 AUS - G/SCM/N/48/AUS - G/SCM/N/60/AUS, 11 May 2000;
G/SCM/N/60/AUS/Rev.1, 19 December 2000;  and G/SCM/N/71/AUS, 4 D ecember 2001.
121. Since 1998, the pattern of intervention in agriculture, livestock, fisheries and forestry has
remained virtually unchanged and clarifications have been sought by other trading partners (Canada,
the United States, Mauritius, New Zealand), in the context of the WTO Committee on Agriculture,concerning several support measures (e.g., dairy, milk pricing policy in the State of Victoria, SugarWT/TPR/S/104 Trade Policy Review
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Industry Infrastructure Programme, Rural and Adjust ment Scheme, Sugar Research and Development
Programme, CP2002 Sugar Programme, Chicken Me at and Egg Industry R&D, Deer Industry R&D,
National Weeds Programme, Delicatessen Programme, Natural Disaster Relief Payments, Farm
Family Restart Scheme).136  In addition to support through state trading (wheat, barley, rice, sugar),137
and tax and financial measures, assistance has included action such as a Dairy Market PriceSupport (until June 2000), a Dairy Industry Adjust ment Package (as from July 2000), adjustment
assistance (since 1997), several programmes under Agriculture-Advancing Australia (AAA)), the
protection of animal and plant health, the strengthening of quarantine defences, development and
commercialization of new innovative agribusiness products/services/technologies in partnership with
SMEs (New Industries Development Programme) and a national biotechnology strategy.
138
122. In line with its schedule of commitments in agriculture, Australia has kept its domestic
support as measured by the Aggregate Measurement of Support (AMS) much below its reduction
commitment level (Chapter IV(2)).  Australia's bound AMS ceiling was $A 570.16 million in 1995
declining to $A 471.86 milion in 2000.139  In 1999/00, its actual level of support as measured by the
current total AMS was $A 61.83 million or 53% less than in 1997/98.  In addition, Australia provided
trade-distorting domestic support, albeit with de minimis  levels for wheat, pig-meat, and lamb meat as
well as non-product specific AMS.140  Spending on Green Box measures was dominated by general
services (e.g., infrastructural, extension, advisory and R&D services (60.8%)) and environmental
programmes (27.9%);  this type of spending was $A 1.3 billion or 2,119% higher than current total
AMS.
123. Support has been maintained and reinforced for manufacturing activities in general and
specific industries such as printing (including books and educational textbooks), pharmaceuticals,
textiles, clothing, footwear, passenger motor vehicles, shipbuilding, and information andtelecommunications technology.  Assistance to R&D has remained a priority means for broadening
Australia's scientific, technological and industrial capabilities with a view to facilitating the
development of more internationally competitive, innovative, and export-oriented industries.
141  The
authorities consider that Australia’s considerable R&D support is around the OECD average
(Tables III.9 and AIV.5).142  Under an Innovation Statement ( Backing Australia’s Ability ), which was
launched in January 2001, a $A 3 billion five-year integrated strategy has been implemented to
encourage and support innovation and enhance Australia’s international competitiveness, economic
prosperity and social well-being.143  Under a Strategic Investment Co-ordination Process designed to
attract foreign direct investment assistance in the form of funding has been provided to selected
                                                     
136 WTO documents:  G/AG/R/14, 30 April 1998;  G/AG/R/15, 3 August 1998;  G/AG/R/19,
25 August 1999;  G/AG/R/22, 25 April 2000;  and G/AG/R/23 , 27 July 2000 .
137 The authorities indicated that single-desk arrangements (including State-Government run single
desks) have little or no production-assisting effect.  Despite their vesting powers, prices (and hence productionsignals) are determined by the global market, and no government guarantees minimum prices for cropcommodities.  For example, the NSW farmers are bear ing the losses from the collapse of the NSW Grains
Board.
138 Productivity Commission (2000d);  AFFA online information.  Available at:
http://www.affa.gov.au/docs/industry_develop/aaa/ [22 March 2001];  http://www.affa.gov.au/docs/food/nidp/
overview.html [20 March 2001];  and http://www.affa.gov.au/corporate_docs/publications/html/factsheets/exept.html [20 March 2001].
139 Part IV, Section I of Schedule I – Australia, 15 April 1994.
140 WTO documents G/AG/N/AUS/36, 20 June 2001.
141 Australian Department of Foreign Affairs and Trade (DFAT) online information.  Available at:
http://www.dfat.gov.au/trade/negotiations/oecd_pub [23 March 2001].
142 Productivity Commission (2000d).
143 Department of Industry, Tourism and Resources online information.  Available at:
http://backingaus.innovation. au/statement.index.index.htm [5 June 2002].Australia WT/TPR/S/104
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projects in the manufacturing sector.  Selective investment incentives have been provided by State and
Territory governments to, inter alia,  relocate manufacturing firms within Commonwealth;  in 2000, a
cooperation agreement was to be reached on investment attraction activities to ensure a consistent set
of guidelines across jurisdictions.144
124. In this regard special corporate tax rate deductions and other tax incentives for capital
expenditure by firms involved in mineral exploration and development activities were slightlymodified in July 2000 (Chapter IV(3)(i))
145;  mining firms also benefit from concessions on corporate
tax and the fringe benefits (FBT) taxes for remote housing (section (4)(i)(b)).
125. Reportedly, Australia’s electricity prices are among the lowest in the developed world and
State involvement in production and distribution remains important (Table III.4, Chapter IV).146  I n
addition to the Petroleum Products Freight Subsidy scheme147, tax rebates for diesel oil used in several
activities have been strengthened, thus bringing transport costs down.148  The Diesel Fuel Rebate
Scheme providing for a rebates of the full amount of the excise or customs duty on diesel fuel (the
current rate of the rebate is $A 0.38143 per litre fo r diesel fuel;  at the present fuel cost this is
equivalent to a 100% cut in excise collected) has been widened to include diesel and like fuels used in
rail and marine transport, and it has been extended until 30 June 2002.149  As from July 2000, a Diesel
and Alternative Fuels Grants Scheme (DAFGS) has provided for substantial reductions (currently at
$A 0.1851 per litre) in diesel fuel excises for heavy on-road transport;  this scheme is operated
through tax credits for GST paid on all other fuel used for business purposes.  In addition to diesel, the
DAFGS provides grants for the use of alternative fuels such as compressed natural gas (CNG),
liquefied petroleum gas (LPG), ethanol, and other renewable fuels, encouraging the continued use of
alternative fuels for heavy on-road transport.  Diesel excise reforms were to benefit rural exporters
and tourism operators.150  Apart from discussion at its previous TPR, no information on this type of
assistance has been submitted to the WTO Committee on Subsidies and Countervailing Measures;  the
authorities consider these subsidies to be non-notifiable.
126. Price controls have been reduced so that they now cover air navigation, airport (Brisbane,
Melbourne, Perth), postal (public sector) and harbour towage services.  The Prices Surveillance Act
1983 enables the Australian Competition and Consumer Commission (ACCC) to undertake pricesurveillance, price inquiries or price monitoring of selected goods and services so as to promote
competitive pricing, where possible, and to restrain price rises in markets where competition is less
than effective.  Once the responsible Minister formally declares an organization, good or service
subject to price surveillance, the price of a declared product is not permitted to increase above its
endorsed price or its highest price in the previous  twelve months without notification to the ACCC.
Through the Pharmaceutical Industry Investment Programme (July 1999-June 2004, Table III.10), the
Pharmaceutical Benefits Pricing Authority (PBPA) has continued taking account of the firm's local
activity, including in manufacturing, services and R&D, when recommending higher prices for
                                                     
144 Productivity Commission (2000d).
145 Australian and New Zealand Minerals and Energy Council (undated).
146 Department of Industry, Science and Resources online information.  Available at:
http://www.isr.gov.au/resources/electricity_reform/reform/aus_esi.pdf [26 April 2001].
147 AusIndustry online information.  Available at:  http://www.ausindustry.gov.au/documents/dir56/
doc501156.html [25 April 2001].
148 Australian and New Zealand Minerals and Energy Council (undated).
149 These rebates also cover certain eligible off-road uses in mining operations, agriculture, forestry and
fishing, rail and marine transport, and at hospitals, nursing and aged person homes and other medical institutionsas well as for electricity generation at residential premises.
150 Australian Department of Foreign Affairs and Trade (undated b).WT/TPR/S/104 Trade Policy Review
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domestic and imported pharmaceuticals nominated by the PIIP participants (Chapter IV).  The
PBPA’s pricing responsibilities apply to all pharmaceuticals irrespective of the location of production.
(iii) Competition and consumer policy
(a) Competition policy
127. Australia considers that it has developed one of the most advanced competition regimes in the
world covering all businesses regardless of their ownership (public or private), and applying to allaspects of industry and commerce.
151  Since 1995, the great majority of larger government business
enterprises (GBEs) have been subject to competitive neutrality principles, which means fairer
competition with their private sector counterparts.152  Australia believes that the benefits of the
competition policy development process have included improved economic performance, productivity
gains, higher-quality goods and services, lower prices, and increased technological innovation.153
128. 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 has legislation that substantially mirrors the fair trading provisions of the
Commonwealth legislation.  The TPA contains provisions on:  anti-competitive agreements (e.g.
collusive price fixing);  misuse of substantial market power;  exclusive dealing; resale pricemaintenance;  access to essential infrastructure;  and anti-competitive acquisitions.  Competition
policy is the responsibility of the Department of the Treasury within the Commonwealth Government
as well as the Premier’s Department in each State and the Chief Minister’s Department in each
Territory.  The Australian Competition and C onsumer Commission (AC CC) is an independent
statutory authority charged with, inter alia,  administering the TPA and the Prices Surveillance Act.
The National Competition Council (NCC), also an independent authority, reports on jurisdictions’
progress in implementing National Competition Policy (NCP) reforms.  It also assesses whether third-
party access should be granted to major infrastructure under the TPA’s access provisions, with
subsequent regulation of that access conducted by the ACC or other State-based regulators.
129. As indicated earlier, a legislative review programme is being carried out to ensure that the
legislation does not unnecessarily restrict competition;  it is to be completed by June 2002.
154  About
1,700 items of legislation on areas such as marketing of agricultural products, food labelling, financeand insurance, trades and professions, gambling and local government planning processes, are being
covered.  Commonwealth, State and Territory governments are continuing to implement reforms
recommended by these reviews, but no information was made available to the Secretariat, by the time
of completion of this Report, on the reviews that had not been translated into government reforms.
130. In the context of the WTO Working Group on the Interaction between Trade and Competition
Policy, Australia indicated and replied to questions on several aspects of its competition policy
reforms, for example competition versus anti-dumping action;  monopolies;  technical regulations;
duties; labour mobility.
155  It also submitted papers on its approaches to promoting international
cooperation and communication on competition policy issues as well as its experience in competition
                                                     
151 Australian Department of Foreign Affairs and Trade online information.  Available at:
http://www.dfat.gov.au/trade/negotiations/index.html#oecd [23 April 2001];  and WTO document
WT/WGTCP/W/60, 4 March 1998.
152 National Competition Council (2000).
153 WTO document WT/WGTCP/W/159, 13 March 2001.
154 National Competition Council (2000).
155 WTO documents WT/WGTCP/W/60, 4 March 1998 and WT/WGTCP/W/98, 21 September 1998.Australia WT/TPR/S/104
Page 75
policy development assistance and some best-practice indicators.156  Australia supported the
consensus on negotiations on competition policy in the WTO, as reflected in the Doha Ministerial
Declaration.  In the light of experience with develo ping countries (in particular APEC), the authorities
also stress the potential benefits of an incrementa l, capacity building approach to the development of
competition policy and related institutions.157
131. Australia has also actively participated in competition, consumer protection, and public utility
committees within APEC, OECD, the International Society of Consumer and Competition Officials
(ISCCO), and the International Marketing Supe rvision Network (IMSN).  In July 2000, the ACCC
signed a bilateral cooperation arrangement with the U.S. Federal Trade Commission (FTC) to
facilitate information exchange and enforcement cooperation on consumer protection matters.  A
second agreement gave the ACCC access to the U.S. FTC’s complaints database Consumer Sentinel .
In October 2000, the ACCC entered into its first tr ipartite cooperation arrangement with the Canadian
Competition Bureau and the New Zealand Commerce Commission.  The latter arrangement
established a framework for notification, coordination, and cooperation on competition and consumer
protection enforcement activities, exchange of information and avoidance of conflict.  These
arrangements add to the ACCC’s existing cooperation agreements with the New Zealand CommerceCommission, the Consumer Council of Papua Ne w Guinea, the Chinese Taipei Fair Trade
Commission, and the Mutual Antitrust Enforcement Assistance Agreement with the United States.
Negotiations with several other competition and consumer protection agencies around the world are
currently under way.  Positive outcomes of these negotiations will significantly increase the ACC’s
network of formal cooperation arrangements to facilitate information exchange, cooperation, and
assistance in enforcement matters, and provide technical assistance to emerging economies.
(b) Consumer policy
132. During the period under review, consumer protection legislation was amended to introduce
the offence of price exploitation in relation to the New Tax System, to clarify and expand the
sanctions available, and to improve access to remedies.  The institutional setting was reinforced in
1998 by granting the Australian Securities and Investments Commi ssion (ASIC) primary
responsibility for consumer protection and market integrity in the financial servicessector (Chapter IV(5)(v));  ASIC established an Office of Consumer Protection, to provide strategic
advice on consumer protection issues to all of ASIC's regulatory programmes, and a Consumer
Advisory Panel (CAP).  Negotiations with the EU on the development of an administrative
arrangement to share information on consumer policy and protection are to be finalized in 2002.
133. Since 1996, the ACCC has undertaken legal action, inter alia,  for:  misleading and deceptive
conduct and fine print advertising;  unconscionable conduct;  pyramid and referral selling;  breaches
of the product safety/product liability provisions of the Trade Practices Act;  and misleading country-
of-origin claims.
158  The majority of complaints were resolved by administrative action.  The ACCC
has taken enforcement action against a number of businesses that allegedly breached mandatory safety
or information standards (section (2)(ix)(a)) for items such as children's swimming aids, bean bags,pedal bicycles, motor cycle helmets, high tar cigarettes, children's nightwear, sunglasses, trolley jacks,
exercise cycles, and latex gloves.  Other action to protect the economic interests of consumers has
been taken in areas such as industry self-regulation, enforcement activities in retail, media, education,
health, financial services, surveillance (superannuation disclosure documents, unregistered insurance
                                                     
156 WTO documents WT/WGTCP/W/125, 31 May 1999, WT/WGTCP/W/148, 3 August 2000, and
WT/WGTCP/W/159, 13 March 2001.
157 Australian Department of Foreign Affairs and Trade online information.  Available at:
http://www.dfat.gov.au/trade/negotiations/index.html#oecd [23 April 2001].
158 OECD (2000).WT/TPR/S/104 Trade Policy Review
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brokers, Internet banking sites) and electronic commerce.  As indicated, a bilateral cooperation
arrangement was signed in July 2000 with the U.S. FTC.
(iv) Intellectual property rights
International treaties
134. Australia expanded its commitments on protection of intellectual property rights (IPRs) by
becoming a party to the Trademark Law Treaty (January 1998) and the Protocol Relating to theMadrid Agreement Concerning the International Registration of Marks (as of July 2001);  thus, it now
participates in 12 out of 19 treaties administered by the World Intellectual Property Organization.
159
Australia implemented the main obligations of the WIPO Copyright Treaty (WCT) with theenactment and commencement (on 4 March 2001) of  the Copyright Amendment (Digital Agenda)
Act 2000;  the term of protection for photographs is still to be extended in conformity with therelevant provisions.  Australia has yet to take action for acceding to and implementing treaties such as
the WIPO Performances and Phonograms Treaties, the Geneva Act of the Hague Agreement
Concerning the International Registration of Industrial Designs, and the Patent Law Treaty.
135. Reportedly, the TRIPS Agreement, which the authorities consider as a key development in the
multilateral trading system, has benefited Australian exporters of intellectual property, especially inAsia.
160
136. In the context of the national competition policy reform (section (iii) above) and expanding
international commitments, a review of the IPRs legal framework (Patents Act 1990, Trade Marks Act
1995, Designs Act 1906, Copyright Act 1968, Circuit Layouts Act 1989) was carried out by the
Intellectual Property Competition Report Committee whose report was released in September 2000;
the Government responded to issues raised by this report in August 2001.161  A Patents Amendment
Act 2001 (commencing on 1 April 2002), inter alia,  strengthened the novelty and inventiveness
requirements.  Mechanisms to ensure efficiency and transparency in copyright management were
adopted.  A voluntary code of practice by copyright collecting societies was adopted in the first
quarter of 2002 and is available from each of the copyright collecting societies.
137. In the context of the review of its IPR legislation by the Council for Trade-Related Aspects of
Intellectual Property Rights, Australia replied to questions by Canada;  the EU;  Hong Kong, China;Japan;  Switzerland;  and the United States.
162  These questions were mainly related to enforcement
issues, the patent system, and plant variety and animal protection.  Australia made submissions  on,
inter alia,  the range of intellectual property issues raised by electronic commerce, a mechanism for
                                                     
159 Australia is also a party to the Convention Establishing the World Intellectual Property Organization
(as from 1972), the Paris Convention for the Protection of Industrial Property  (as from 1925), the BerneConvention for the Protection of Literary and Artistic Works (as from 1928);  the Nice Agreement Concerningthe International Classification of Goods and Services for the Purposes of the Registration of Marks (as from
1961);  Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their
Phonograms (as from 1974);  the Budapest Treaty on the International Recognition of the Deposit ofMicroorganisms for the Purposes of Patent Procedure (as from 1987);  the International Convention for theProtection of Performers, Producers of Phonograms and Broadcasting Organisations (as from 1992); theStrasbourg Agreement Concerning the International Patent Classification (as from 1975);  the PatentCooperation Treaty (as from 1980);  International Convention for the Protection of New Varieties of Plants
(UPOV) (as from 1989) WIPO online information.  Available at:  http://www.wipo.int/treaties/general/
parties.html#1 [9 July 2001]).
160 Australian Department of Foreign Affairs and Trade (2001).
161 Intellectual Property & Comp etition Review Committee (2000).
162 WTO documents IP/Q4/AUS/1, 14 July 1998 and IP/C/W/125/Add.13, 16 March 1999.Australia WT/TPR/S/104
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settling trade-related disputes concerning intellectual property (IP) issues (non-violation complaints),
and the protection of geographical indications.163  It also supplied information on Australia's technical
and financial cooperation activities relevant to the implementation of the TRIPS Agreement164, as well
as incentives and institutions for promoting technology transfer to least developed countries in the
context of bilateral and regional programmes (e.g. APEC Intellectual Property Experts Group), mainly
operated through the Australian International Aid Agency (Ausaid).165  A joint WIPO-Australia
working group, established in March 2000, is to coordinate many of Australia’s ongoing cooperation
activities.166
Enforcement action and parallel imports
138. Australia maintains special border measures.  Upon acceptance of a Notice of Objection, the
Customs may seize and hold imported goods infringing IPRs (copyrights, trade marks) or consumerprotection legislation, prior to their release from Customs control.  By 2000/01, Notices of Objection
had been lodged for a wide variety of items.
167
139. Reportedly, the right to effect parallel imports have been further liberalized since the previous
Review.168  The parallel importation of sound recordings has been allowed since 1998, and of branded
goods (clothing, footwear, toys, and packaged food) since 2000.169  As of 31 January 2000, Schedule
2 of the Copyright Amendment Act (No. 1) 1998 reformed copyright provisions on packaging and
labelling, thus preventing importers from blocking parallel imports on the basis of copyright in
"accessory" items, which are peripheral to substantive goods.  A Cabinet decision to remove the
restriction on parallel imports for printed material and computer software was taken in July 2000;  no
                                                     
163 WTO documents IP/C/W/144, 6 July 1999; IP/C/W/212, 27 September 2000;  and IP/C/W/211,
10 October 2000.
164 On a bilateral basis, Australia cooperated with:  Bhutan;  Brunei Darussalam;  Croatia;  Hong Kong
China;  India;  Indonesia;  Republic of Korea;  Malaysia;  Mongolia;  Nepal;  Pakistan;  Papua New Guinea;  thePhilippines;  Singapore;  Thailand;  Tonga;  People´s Republic of China;  Vanuatu;  and Viet Nam (WTOdocuments IP/C/W/154/Add.4, 1 December 1999;  IP/C/W/203/A dd.5, 2 October 2000;  and
IP/C/W/306/Add.2, 18 September 2001).
165 WTO documents IP/C/W/132/Add.3, 6 May 1999 and IP/C/M/23, 2 June 1999;  and Australian
Department of Foreign Affairs and Trade (undated b).
166 APEC (2000).
167 These include:  integrated circuits, semiconduc tor memories, microprocessors, computers and other
components thereof (INTEL, MMX, Pentium);  ball point pens (Bic);  pencils and particularly mechanicalpencils and fountain pens (Parker, Duofold);  tyres and tubes, vehicle wheels, bicycles and their parts and all
other goods included in this class (Bridgestone);  cl othing, accessories, headgear, leather products, footwear,
shoe cleaning products, watches and jewellery (Dr Martens, Giorgio Armani, Seiko);  fishing floats, fishingrods, fishing hooks, artificial preys and fishing lines, and all other sporting goods for anglers included in thisclass (Shimano, Baitrunner, TLD, Tiagra, Sustain, Bullwh ip, Triton, Stradic, Bantam);  parts for bicycles, in
particular gear-shifting means, brakes, levers, freewheels,  hubs, and all other parts for bicycles included in this
class (Shimano).  Australian Customs Notices No. 2000/09 and 2001/10 [Online], February 2000 and 2001
Available at:  http://www.customs.gov.au/notices/acn00/acn0009.htm and http://www.customs.gov.au/notices/
acn01/acn0110.htm [18 May 2001].
168 Parallel imports of goods are allowed into Australia under certain circumstances (WTO, 1998).
Imports of goods protected by an Australian patent may take place without the consent of the Australian patentholder where the patent holder did not place a condition restricting the import of these goods.  Goods that carry
an Australian trade mark may be imported without the cons ent of the trade mark holder as long as the trade
mark applies to the goods imported with the authority of, or under the control of, the Australian trade mark
holder.  Goods bearing a design registered in Australia may be imported without consent where the design hasbeen applied to goods outside Australia with the consent of the Australian design owner; however, it seems thatuntil January 2000 labeling and packaging copyrights prevented this from occurring.
169 United States Trade Representative (2001).WT/TPR/S/104 Trade Policy Review
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implementing bill had been submitted to the Parliament by December 2000.170  A Copyright
Amendment (Parallel Importation) Bill 2001 on this issue was first introduced into Parliament on
28 February 2001 but did not complete its passage through the Parliament before the calling of an
election.  A new Copyright Amendment (Parallel Importation) Bill 2002, to the same effect, was
introduced in March 2002 and has to be debated.
140. Civil litigation has been the most common form of IPR enforcement in the domestic market-
place;  nevertheless, there has been some concern over piracy cases (section (4)(iv)(b)).  Penalties for
violations may include both imprisonment and monetary fines;  civil remedies do not apply to
geographical indications.171
(a) Industrial property
Patents and utility models141. Patent legislation (Patents Act 1990), which is being reviewed (see above), provides
protection for inventions in all fields of technol ogy (including biotechnology, excluding human beings
and biological processes relating to artificial reproduction), for a period of 20 years from the date of
filing an application.
172  Legislation was amended to provide, inter alia,  for an extension of the term
for pharmaceutical patents173;  patentees may now apply for an extension of term of up to five years
for a standard patent that involves a pharmaceutical substance.  The Patents Amendment (Innovation
Patents) Act 2000 (in force as from 24 May 2001) repealed the petty patent system and implemented
the innovation patent system.  Improvements under the Patents Amendment Act 2001 (commencing
on 1 April 2002) included:  increasing the scope of the information required to ensure that an
invention complies with the novelty and inventiv eness tests in the Patents Act;  replacing the
requirement that the Commissioner of Patents gives a patent applicant the benefit of the doubt in
relation to these tests with a more stringent test;  and requiring that applicants must provide theCommissioner with certain information available to th em that may be relevant in determining whether
an invention meets these requirements.  Amendments to the Patents Regulations 1991 allowed for the
introduction as from 1 April 2002 of a 12-month grace period for patents.  An application for patent in
Australia provides international priority rights if applications follow in overseas jurisdictions within
12 months.
142. A Commonwealth, State or Territory Court may order the granting of a compulsory licence if
it is satisfied that the reasonable requirements of the public have not been met in relation to the
invention and the patentee has not given a satisfactory reason for failing to exploit the invention.  This
includes the possibility of the patented invention not being worked in Australia ("worked" includes
importing) on a commercial scale, despite existing capability.  No compulsory licences have beengranted under the 1990 Act.
                                                     
170 Imports of copyright material such as books, computer software and films cannot take place without
the consent of the copyright holder, except in the case of books published after 1991 that are not first published
in Australia, where the copyright owner is unable to guarantee supply within 90 days (WTO, 1998).
171 As of 1 January 2002, maximum criminal penalties for copyright infringement have been increased
to $A 302,500 for offences by a corporation and $A 60,500 (up to $A 55,000 for trade mark violations) or fiveyears imprisonment for individuals, with increased monetary penalties available in cases of digitization.  Aprison sentence of between six months and five years for copyright, and to a maximum of two years for trademark offences can also accompany the fine.  Criminal pe nalties, unless related to fraudulent behaviour, do not
apply for misuse of other forms of intellectual property rights.  Violations of patents and industrial designs are
not subject to criminal penalties although injunctions and damages or an account of profits may be sought(WTO, 1998;  and WTO document IP/C/W/125/Add.13, 16 March 1999).
172 WTO (1998);  and WTO document IP/C/W/125/Add.13, 16 March 1999.
173 The Intellectual Property Laws Amendment Act (1998) in force as from 27 January 1999.Australia WT/TPR/S/104
Page 79
Protection of plant varieties
143. Under the Plant Breeder's Rights (PBR) Act 1994, new varieties of all plant, fungal, algal
species and transgenic plants are eligible for protection in line with UPOV guidelines and test
procedures.  In tree and vine varieties, PBR continues for 25 years from the date of granting, and in all
other varieties, for 20 years from the date of granting.  The Plant Breeder's Rights Office (PBRO) in
the Department of Agriculture Fisheries and Forestry - Australia (AFFA) is responsible for allprocedures relating to the granting of exclusive commercial rights to a registered plant variety.
174
Australia ratified the 1991 Act of UPOV in 2000.
Trade marks
144. Under the Trade Marks Act of 1995, trade marks may be protected for ten years and renewed
indefinitely, upon request.  The Trade Marks Am endment (Madrid Protocol) Act 2000 (in force as
from 11 July 2001) gave effect to the provisions of the Protocol Relating to the Madrid Agreement
Concerning the International Registration of Marks, thus enabling the Trade Marks Office to process
international applications and registrations under the Madrid Protocol.  Once used, trade marks may
also, without registration, be protected by common law;  however, registration seemingly makes
enforcement easier.175  The Trade Marks and Other Legislation Amendment Act 2001 gave effect to
recommendations arising from a post-implementation review of the trade marks legislation;  it also
made minor and technical amendments to the Trade Marks Act 1995, which is under an ongoing five-
year review.
Industrial designs
145. The Designs Act of 1906 protects design features, such as shape or pattern (including textile
design, excluding purely artistic design), from imitation for a period up to 16 years.176  In February
1999, the authorities announced their intention to introduce significant changes to the registrationsystem, to enhance its efficiency and effectiveness against free riders and infringers.  Key features of
the proposed system include a streamlined registration process, higher threshold for registration and
broader infringement tests, and a ten-year term of registration.  An "exposure" draft of the legislation
to repeal the Designs Act 1906 and implement the new system was released for public comment in
May 2001.  Responses to the "exposure" draft are currently being considered.
Trade secrets
146. Undisclosed information and trade secrets are protected by common law;  case law has
defined a set of criteria for granting protection for confidential information.
177  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 ChemicalsAdministration Act 1992 and the Agricultural a nd Veterinary Chemicals Code Act 1994 and its
regulations.  As from 1999, five years of protection have been provided to test data for the evaluation
of a new active constituent for agricultural and veterinary chemical products.
178  No protection is
                                                     
174 AFFA online information.  Available at: http://www.affa.gov.au/docs/operating_environment/
plant_breeder_rights/pbr_scheme.html [23 March 2001];  WTO document IP/C/W/125/Add.13, 16 March 1999.
175 Shanahan (1990).
176 WTO (1998).
177 WTO (1998);  and U.S. Department of State (2000).
178 WTO documents IP/N/1/AUS/U/1, 12 November 1999;  and IP/N/1/AUS/U/2, 12 November 1999.
According to a major WTO Member, in the past, inadequate protection to patents on agricultural and veterinaryWT/TPR/S/104 Trade Policy Review
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provided for data submitted in regard to new uses and formulations.  A review of the current data
registration protection system is under way to establish a level of protection that provides incentives
to undertake innovative research and development wi th regard to agricultural-veterinary chemicals,
and maintains competition (and reasonable prices) in the chemicals market.
Institutional and other issues
147. Since 1998 , IP Australia, a self-funding independent division of the Department of Industry,
Science and Resources (ISR), reporting directly to the Minister, has granted and administered  rights
in patents, trade marks, and designs.179  Plant Breeder’s Rights (PBR) are administered by the
Department of Agriculture Fisheries and Forestry - Australia (AFFA).180  In 2000, the average interval
between the lodging and acceptance of applications for industrial property rights was: 33 months for
patents;  20 months for trade marks;  ten months fo r designs;  30 months for PBRs;  and, eight months
(in the absence of significant objections) for geographical indications for wine.181  The average
intervals in 2001 were:  36.77 months for patents, 16.3 months for trade marks, and 11.5 months for
designs.
(b) Copyright and related rights
148. The Copyright (WTO Amendments) Act 1994 protects all original literary, dramatic, musical
and artistic works for the lifetime of the author and a period of 50 years after the expiry of the
calendar year in which the author of the work died.182  Copyright protection is extended to commercial
rental arrangements for sound recordings of these works as well as commercial rental of computer
programs.  Protection for performers is set at 50 years after the calendar year in which the
performance was first given.  Copyright legislation was amended on several occasions to,  inter alia :
extend the exceptions to the reproduction right in computer programs (in force as from
30 September 1999);  prevent importers from blocking parallel imports on the basis of copyright in"accessory" items that are peripheral to substantive goods (as from 31 January 2000);  provide greater
copyright protection to works and other protected subject matter on-line, in the context of rapid
technological developments (as from 4 March 2001).
183
149. As indicated earlier, legislation has been passed removing parallel import protection (i.e. the
copyright ban) for sound recordings and for branded goods whose protection was based on thecopyright of packaging and labeling.
184  WTO notification of this legislation was pending at the time
of completion of this report.
                                                                                                                                                                    
chemicals involving a new chemical entity during the registration process has seemingly hampered its exports of
these products to Australia (European Commission (undated).
179 IP Australia online information.  Available at:  http://www.ipaustralia.gov.au/
about/A_regula.htm [23 April 2001].  Between 1992 and 1998 the Patent (established in 1904), Trade Marks
(1906) and Design (1907) offices were jointly administered by the Australian Industrial Property Office (AIPO),
which changed its name to IP Australia.
180 APEC (2000).
181 APEC (2000).
182 In the case of anonymous and pseudonymous works, protection is provided for a period of 50 years
after the expiry of the calendar year in which the work was first published (WTO, 1998).
183 Amendments include the Copyright Amendment (Computer Programs) Act 1999;  the Copyright
Amendment Act (No. 1, No. 2) 1998;  the Copyright Amendment (Digital Agenda) Act 2000;  the CopyrightAmendment (Moral Rights) Act 2000 .
184 Reportedly, copyright over labeling and packaging prevent this practice from
occurring (U.S. Department of Commerce, 1999).Australia WT/TPR/S/104
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150. Policy responsibility on most copyright matters is shared between the Attorney-General and
the Minister for Communications, Information Technology and the Arts.  There is no provision for
registration of copyright in Australia.  However, there are compulsory deposit requirements in relation
to the provision of publications to the National Library and certain other libraries.185
151. According to a recent study by Business Software Alliance, between 1998 and 2000 Australia
registered a virtually stable piracy rate (7th lowest of the 82 countries surveyed), with a share of 32%-
33%  of pirated retail sales to total software sales for applications software;  in 2000, retail revenue
lost to pirated software was 31% less than in 1998.186  According to industry statistics from the
International Federation of the Phonographic Industry (IFPI), piracy of sound recordings in Australia
remains under 10%, notwithstanding the introduction of parallel imports.187  Recent Australian reports
indicate that even though the level of copyright infringement in Australia is low by international
standards, it does impose a significant and costly burden on domestic industries relying on creative
endeavour188;  according to Business Software Associat ion of Australia (BSAA), the annual cost of
software piracy to Australian manufacturers is estimated at $A 264 million.189  Furthermore,
unauthorized downloads of digitized sound recordings from the Internet are believed to be seriously
eroding the legitimate CD market in Australia.  Recommendations were made to amend legislation soas to make it easier for copyright holders to defend their rights in civil actio ns and to increase the
criminal penalties for commercial infringement.  The authorities are considering these
recommendations.
152. Specific statistics of civil cases of copyright infringement are not maintained (there are nine
jurisdictions within Australia where cases can be br ought).  However, anecdotal evidence supports the
view that infringement cases mainly involve sound recordings, film, and software.  While damages
awards have varied according to the specifics of the cases involved, there are recent instances ofsignificant awards.  In Microsoft v Goodview Electr onics, the defendant was found to have illegally
imported and sold 5,219 illegal copies of Windows 95.  Damages were calculated at nearly
$A 650,000 with an additional amount of $A 500,000 in additional damages for flagrant breach.  In an
action against CEL Music Pty Ltd, decided in early 2002, damages in excess of $A 1,000,000 were
awarded.
153. In response to complaints by industry groups on judicial attitudes to proof of copyright and
the attitude of the Australian Commonwealth Police on criminal violations as well as to views
expressed in a Parliamentary report on copyright enforcement, in June 2001 the Australian
Commonwealth Police initiated consultations with industry enforcement representatives and State and
Commonwealth agencies on the role of organized crime in intellectual property rights infringementsin Australia.  As a result, intellectual property intelligence collection has been coordinated and police
enforcement operations have been undertaken in relation to both copyright and trade mark
infringements.  In addition to Australian Commonwealth Police operations, police action on a smaller
scale has been handled by State and Territory police.
                                                     
185 APEC (2000).
186 Business Software Alliance (2001).
187 IFPI (2001).
188 Reports by the Australian Recording Industry Association and the report by the Australian House of
Representatives’ Standing Committee on Legal and Constitutional Affairs (2000), Cracking down on copycats:
enforcement of copyright in Australia , December, cited in United States Trade Representative (2001).
189 The Business Software Association of Australia (BSAA) whose members account for between 70%
and 80% of the PC software market in Australia, is affiliated with the Business Software Alliance (BSA)(Business Software Association of Australia (BSAA) online information.  Available at:http://www.bsaa.com.au/ [12 July 2001]).WT/TPR/S/104 Trade Policy Review
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(v) Other measures (environmental)
154. Australia subscribes to most environment-related international or regional agreements.190  As
part of the Kyoto Protocol it undertook to limit its greenhouse gas emissions to 108% of its 1990 level
by 2010.191
155. Environmental issues exert a strong and expanding influence with increasing public emphasis
on pollution reduction;  the prospect of significant fines and adverse publicity for companiesexceeding discharge limits has important implications for the industry as a whole.
192  Policy objectives
have included waste minimization, materials recycling, clean and renewable energy sources, and
treatment of problems at the source.
156. Legislation in force regulates economic activities to inter alia  ensure that trade is
environmentally sustainable.193  The Commonwealth Environment Protection and Biodiversity
Conservation Act 1999 (EPBC Act), came into force on 16 July 2000.  Under the EPBC Act, actions
that are likely to have a significant impact on th e environment of Commonwealth land (even if taken
outside Commonwealth land), and actions taken by the Commonwealth that are likely to have a
significant impact on the environment anywhere in the world, may also require approval by the
Minister for the Environment and Heritage before they can be carried out.  The Wildlife Protection(Regulation of Exports and Imports) Act 1982 was repealed and its provisions incorporated into the
EPBC Act (effective as from 1 January 2002).  Firms may use certification and information schemes
to confirm that the procedures they use are environmentally friendly.  Complying with
environmentally friendly International Standard Organisation (ISO) standards and forms of
assessment may become more important for the compet itiveness of Australian firms to an increasingly
environmentally conscious world market.
157. The EPBC Act is triggered when there is the likelihood of a significant impact on a matter of
national environmental significance and applies equally to domestic and overseas companies.
Between July 2000 to March 2002, of 534 referred proposals:  40 did not require approval because the
action was to be taken in a specified manner;  305 did not require assessment and approval because
they did not impact on a matter of national environmental significance;  and 34 were still under
consideration whether approval would be required.  So far no proposals have been refused approval.
During the assessment of a proposal requiring approval, the proponent addresses mitigation measures
and alternatives.  Conditions may be set on approval.
158. Export finance has been tied to environmental co nditions to better identify and assess any
significant environmental impact of export transactions, overseas projects or overseas investments.
194
Since the commencement of the EPBC Act, the Export Finance and Insurance Corporation
(section (3)(iv)(d)) has encouraged the adoption of the World Bank's Pollution and Abatement
Handbook as the standard for Environmental Impact Assessment associated with potential Category A
(high possible environmental impact) transactions;  transactions are classified in three categories
depending on the risk and the approach adopted by major multilateral financiers and insurers.  All
                                                     
190 A list of Australian laws and international conventions to which it is a signatory is available from
the Export Finance and Insurance Corporation online information.  Available at:http://www.efic.gov.au/environment/treaties.asp [18 April 2001]).
191 Australian Department of Foreign Affairs and Trade (2001).
192 U.S. Department of Commerce (1999).
193 It includes the Hazardous Waste (Regulation of Exports and Imports) Act 1989, and the Ozone
Protection Act 1989.  Australian Department of Foreign Affairs and Trade (2001).
194 Export Finance and Insurance Corporation (EFIC) online information.  Available at:
http://www.efic.gov.au/themes/finance_index.asp [18 April 2001].Australia WT/TPR/S/104
Page 83
transactions are checked against Australia's international commitments and an exclusion list of
prohibited material, substances, and countries (based on Australian Customs Regulations).  The EFIC
envisages reviewing its environment policy after it has considered its first Category A transaction,
which was expected to take place in the first half of 2002.
159. Since 1998,  National Environment Protection Measures (NEPMs) have outlined agreed
national objectives for protecting or managing particular aspects of the environment;  they maycontain goals, standards, monitoring/reporting protocols and guidelines.
195  Existing NEPM’s cover
ambient air quality (1998), the management of controlled waste (1998), the re-use/recycling of
packaged materials (1999), assessment of site contamination (1999), a national pollutant inventory
(2000), and diesel vehicle emissions (2001).  NE PM’s under development include ambient air toxins
and a variation to the ambient air NEPM.  An NEPM becomes law in each jurisdiction once it ispassed by the national Environment Protection Council, unless it is disallowed by either House of the
Commonwealth Parliament.  The Council membership includes a relevant Minister from the
Commonwealth and each of the State and Territory Governments.
160. As part of the 1999 measures for a better environment, a product stewardship (oil) (PSO)
scheme for waste oil was introduced;  as from January 2001, a PSO levy has been charged at$A 0.05 per litre on seven locally produced or imported petroleum products, to fund payments to oil
recyclers who are recycling oil in environmentally appropriate ways.
196
161. Australia has participated actively in the work of the WTO Committee on Trade and
Environment by, inter alia,  submitting papers on issues to be included in a positive agenda for trade
reform in future WTO work.197  It highlighted the important contributions that trade liberalization can,
and must, make to development and the environment through the upcoming WTO agriculture
negotiations.198  In the discussion of trade measures in Multilateral Environmental
Agreements (MEAs), Australia has emphasized that the WTO and MEAs should be able to
constructively co-exist and that countries should seek to ensure that they are able to fully comply with
their obligations under both sets of agreements.
                                                     
195 National Environment Protection Council online information.  Available at:
http://www.nepc.gov.au/ [25 April 2001].
196 The PSO levy applies to all goods classified within the following tariff subheadings:  3403.11.00,
3403.19.00, 3403.91.00, 3403.99.00, 3811.21.00, 3819.00 .00, and 2710.00.90 (Australian Customs Notice
No.2000/77 [Online].  Available at:  http://www.customs.gov.au/notices/acn00/acn0077.htm [18 May 2001]).
197 WTO documents WT/CTE/W/105, 2 February 1999;  WT/CTE/W/106, 11 February 1999;
WT/CTE/M/20, 19 March 1999;  and WT/CTE/W/167, 16 October 2000.
198 Australian Department of Foreign Affairs and Trade online information.  Available at:
http://www.dfat.gov.au/trade/negotiations/index.html#oecd [23 April 2001]