WT/REG369/1  
 
 
30 August  2016 
(16-4587) Page: 1/48 
Committee on Regional Trade Agreements   
 
 
FACTUAL PRESENTATION  
FREE TRADE AGREEMENT  BETWEEN AUSTRALIA  AND CHINA  
(GOODS AND SERVICES ) 
Report by the Secretariat  
This report, prepared for the consideration of the Free Trade Agreement  between 
Australia  and China , has been drawn up by the WTO Secretari at on its own 
responsibility and in full consultation with the Parties. The factual presentation 
reproduces as closely as possible the terminology used in the Agreement and in the 
comments provided and does not imply official endorsement or acceptance by t he 
Secretariat of such terminology. The report has been drawn up in accordance with the 
rules and procedures contained in the Decision for a Transparency Mechanism for 
Regional Trade Agreements (WT/L/671) and thus does not imply any value judgement 
by the Secretariat regarding the contents of the Agreement.  
Any technical questions arising from this report may be addressed to Jean-Daniel Rey  
(tel: +41 22 739 5264). Any statistical questions arising from this report may be 
addressed to Mr. Thakur Parajuli (te l: +41 22 739 5473) . 
 
 WT/REG36 9/1 
 
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  TABLE OF CONTENTS  
 
Page 
1   TRADE ENVIRONMENT  ................................ ................................ ................................ . 4 
1.1   Merchandise trade  ................................ ................................ ................................ ....... 4 
1.2   Trade in services and investment  ................................ ................................ ..................  6 
2   CHARACTERISTIC ELEME NTS OF THE AGREEMENT  ................................ ....................  10 
2.1   Backgrou nd Information  ................................ ................................ .............................. 10 
3   PROVISIONS ON TRADE IN GOODS  ................................ ................................ ...........  11 
3.1   Import duties and charges, and quantitative restrictions ................................ .................. 11 
3.1.1    General provisions  ................................ ................................ ................................ ...11 
3.1.2    Liberalization of trade and tariff lines  ................................ ................................ ......... 11 
3.1.3    Liberalization schedule  ................................ ................................ ............................. 11 
3.1.3.1    Australia  ................................ ................................ ................................ .............. 12 
3.1.3.2    China  ................................ ................................ ................................ .................. 13 
3.1.4    Tariff rate quotas  ................................ ................................ ................................ .....16 
3.2   Rules of origin  ................................ ................................ ................................ ............ 17 
3.3   Export duties and charges, and quantitative restrictions  ................................ .................. 18 
3.4   Regulatory provisions on trade in goods  ................................ ................................ ........ 18 
3.4.1    Standards  ................................ ................................ ................................ ............... 18 
3.4.1.1    Sanitary and phytosanitary measures  ................................ ................................ ......18 
3.4.1.2    Technical barriers to trade  ................................ ................................ ..................... 18 
3.4.2    Safeguar d mechanisms  ................................ ................................ ............................ 18 
3.4.2.1    Global safeguards  ................................ ................................ ................................ .19 
3.4.2.2    Bilateral safeguards  ................................ ................................ ............................... 19 
3.4.2.3    Special agricultural safeguard measures  ................................ ................................ ..19 
3.4.2.4    Measures to safeguard the balance -of-payments ................................ ....................... 20 
3.4.3    Anti-dumping and countervailing measures  ................................ ................................ .20 
3.4.4    Subsidies and State -aid ................................ ................................ ............................ 20 
3.4.5    Customs -related procedures ................................ ................................ ...................... 21 
4   PROVISIONS ON TRADE IN SERVICES AND INVE STMENT  ................................ .........  21 
4.1   Scope and definitions  ................................ ................................ ................................ ..21 
4.2   Denial of benefits  ................................ ................................ ................................ .......21 
4.3   General provisions on trade in services  ................................ ................................ ......... 22 
4.3.1    Market access  ................................ ................................ ................................ ......... 22 
4.3.2    National treatment and MFN  ................................ ................................ ...................... 22 
4.3.3    Commercial presence  ................................ ................................ ............................... 23 
4.3.4   Performance requirements  ................................ ................................ ........................ 23 
4.3.5    Senior Managers and Boards of Directors  ................................ ................................ ....23 
4.3.6    Movement of natural persons  ................................ ................................ .................... 23 
4.4   Liberalization commitments  ................................ ................................ ......................... 24 WT/REG36 9/1 
 
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  4.4.1    Australia  ................................ ................................ ................................ ................. 25 
4.4.1.1    MFN and horizontal commitments  ................................ ................................ ........... 25 
4.4.1.2    Sector specific commitments  ................................ ................................ .................. 26 
4.4.2    China  ................................ ................................ ................................ ..................... 29 
4.4.2.1    MFN and horizontal commitments  ................................ ................................ ........... 29 
4.4.2.2    Sector specific commitments  ................................ ................................ .................. 30 
4.5   Regulatory  provisions  ................................ ................................ ................................ ..32 
4.5.1    Domestic regulation  ................................ ................................ ................................ .32 
4.5.2    Recognition  ................................ ................................ ................................ ............. 33 
4.5.3    Subsidies  ................................ ................................ ................................ ................ 33 
4.5.4    Safeguards  ................................ ................................ ................................ ............. 33 
4.5.4.1    Measures to safeguard the balance -of-payments ................................ ....................... 33 
4.5.5    Other  ................................ ................................ ................................ ..................... 33 
4.5.5.1    Monopolies and exclusive service suppliers  ................................ ............................... 33 
4.5.5.2    Bilateral taxation arrangement  ................................ ................................ ............... 33 
4.5.5.3    Investment  ................................ ................................ ................................ .......... 33 
4.6   Sector specific provisions on trade in services  ................................ ................................ 34 
4.6.1    Legal services  ................................ ................................ ................................ ......... 34 
4.6.2    Telecommunication services  ................................ ................................ ...................... 34 
4.6.3    Financi al services  ................................ ................................ ................................ .....34 
4.6.4    Education services  ................................ ................................ ................................ ...35 
4.6.5    Traditional Chinese medicine services (TCM)  ................................ ............................... 35 
5   GENERAL PROVISIONS O F THE AGREEMENT  ................................ .............................  35 
5.1   Transparency  ................................ ................................ ................................ ............. 35 
5.2   Current payments and capital movements  ................................ ................................ .....36 
5.3   Exceptions  ................................ ................................ ................................ ................. 36 
5.3.1    General exceptions  ................................ ................................ ................................ ..36 
5.3.2    Security exceptions  ................................ ................................ ................................ ..36 
5.4   Accession and Withdrawal ................................ ................................ ............................ 36 
5.5   Institutional framework  ................................ ................................ ............................... 36 
5.6   Dispute settlement  ................................ ................................ ................................ .....37 
5.7   Relationship with other agreements concluded by the Parties  ................................ ........... 39 
5.8   Government procurement  ................................ ................................ ............................ 40 
5.9   Intellectual property rights  ................................ ................................ .......................... 40 
5.10   Other  ................................ ................................ ................................ ...................... 41 
5.10.1    Electronic commerce  ................................ ................................ .............................. 41 
5.10.2    Competition  ................................ ................................ ................................ .......... 41 
ANNEX 1  ................................ ................................ ................................ ........................  42 WT/REG36 9/1 
 
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Key Facts  
 
Parties to the Agreement:  Australia and China  
 
Date of Signature:   17 June 2015  
 
Date of Entry into Force:  20 December 2015  
 
Date of Notification:   26 January 2016  
 
Full implementation:   1 January 20291 
 
 
 
1  TRADE ENVIRONMENT2 
1.1.  The Free Tr ade Agreement between Australia and China , (hereinafter referred to as "t he 
Agreement") is Australia's 1 1th free trade agreement3 and China's 14th free trade agreement.  
1.2.  In 2014 , with a population of 23 million, Australia's GDP was estimated at US$ 1,454  billion, 
while that of China , with a population of 1,364  million, was US$ 10,360  billion. Averaged over the 
period 2012-2014, the Parties' trade (goods and services) to GDP ratio was 41.1 for Australia and 
46.9 for China . 
1.1  Merchandise trade  
1.3.  In 2014  Australia's  merchandise exports amounted to US$ 241 billion ( 1.27% of global 
exports) and imports amounted to US$ 237 billion ( 1.24% of global imports). In the same year 
China 's merchandise exports amounted to US$ 2,342  billion  (12.33 % of global exports) and 
imports US$ 1,959  billion ( 10.26 % of global imports). Australia w as the world's 16th largest 
exporter and 17th largest importer of merchandise, while China  was the largest exporter and 
3rd largest importer. The structure of the Parties' merchandise exports and imports  are different, 
with Australia exporting mainly fuels and mining products (representing 63 % of its total exports) 
while mai nly importing manufactures (71 % of its total imports). China 's exports  and imports  are 
largely manufactures (representing 94% of its total exports  and 60.1% of its total imports ).  
1.4.  Developments in global and intra -Party trade are presented in Chart 1.1 (A and B) over the 
period 2000 -2014.  Data reported to the UNSD Comtrade database show diverging pictures. A 
bilateral trade deficit is r eported for Australia until 2009 when Australia's exports to China are 
reported to substantially outnumber its imports from China, while data reported for China show a 
trade deficit for China's trade with Australia during the whole period (2000 -2014) .4 At the global  
trade  level, Australia experienced a trade deficit until 2008 since when it has registered a trade 
surplus . In the case of China a constant trade surplus is observable , with a momentary setback for 
both exports and imports in  connection with the  financial crisis in 2009 .  
                                                
1 The final implementation date of the special agricultural safeguard measures for beef products as 
listed in Annex 2 -B of the Agreement is, however, 1 January 2031.  
2 Source for this section,  unless otherwise indicated: WTO Trade Profiles, September 2015 (2014 
figures).  
3 Australia does not count SPARTECA and PACTRA as free trade agreements, although they have been 
notified to the GATT/WTO.  
4 According to the Parties, there are a number of pos sible explanations for the differing data, including 
trade trans -shipped through third parties, timing and valuation differences. Other factors could include 
exchange rate variations and differences in customs reporting.  WT/REG36 9/1 
 
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  1.5.  Based on 2014  trade data5, China  was Australia's largest source of imports6 and largest 
destination for exports7, while Australia was China 's 7th largest source of imports8 and 12th largest 
export destination.9 
Chart 1.1 Australia -China:  Merchandise bilateral trade and with world (2000 -2014)  
 
020406080100120
05001,0001,5002,0002,500
2000 2002 2004 2006 2008 2010 2012 2014B. China 2000 -2014
(US$ billions)
Imports from Australia (Right Axis)
Export to Australia (Right Axis)
Total Imports
Total Exports
0102030405060708090100
050100150200250300
2000 2002 2004 2006 2008 2010 2012 2014A. Australia 2000 -2014 
(US$ billions)
Imports from China (Right Axis)
Export to China (Right Axis)
Total Imports
Total Exports
 
Source: UNSD Comtrade database . 
 
1.6.  The commodity structure of trade between Australia and China , and between each Party and 
the world, during t he period 2011 -2013, is shown in Chart 1.2, on the basis of Harmonized System 
(HS) Sections. Machinery  (41.5%), textiles  (11.8%), and miscellaneous manufactured products  
(10.1%) together accounted for 63.4% of Australia's imports from China , while these th ree sectors 
were Australia's 1st, 9th and 10th global imports  representing overall only 31.4% of Australia's total 
imports to the world (representing respectively 24.7 %, 3.6% and 3.1 % of Australia's global 
imports). These three categories of products corre sponded respectively to China 's 1st, 2nd and 
4th largest global exports (corresponding together to 60.5% of China 's global exports).  
1.7.  Mineral products represented almost  three  quarters  of China 's imports from Australia 
(74.7 %). Minerals also represents Aus tralia's top  global export (57.4 % of Australia's export to the 
world), and China 's 2nd largest  global import (representing 24.1 % of China 's imports from the 
world).  
                                                
5 Source: UNSD Comtrade database (e xcluding intra -EU trade). The national statistics of the Parties 
may slightly differ from the, also official, sources systematically used in the preparation of factual 
presentations.  
6 In 2014 , the five top sources of imports for Australia were: China (20. 6%); the EU(28) (17.6%); the 
US (10.6%); Japan (6.8%); and Singapore (5%). Source: UNSD, Comtrade database.  
7 In 2014 , the five top destinations for Australia's exports were: China (33.9%); Japan (17.9%); Korea 
(7.4%); the EU(28) (4.4%); and the US (4.1%).  Source: UNSD, Comtrade database.   
8 In 2014, the five top sources of imports for China were: the EU(28) (12.4%); Korea (9.7%); Japan 
(8.3%); the US (8.2%); and other Asian n.e.s. (7.8%). Source: UNSD, Comtrade database.    
9 In 2014 , the five top destinat ions for China 's exports were: the US (17%); the EU(28) (15.8 %); 
Hong Kong, China ()15.5%); Japan (6.4 %); and Korea (4.3 %). Source: UNSD, Comtrade database.    WT/REG36 9/1 
 
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  Chart 1.2 China  and Australia: product comp osition of merchandise tr ade, annual 
average (2012 -2014)  
42
12109544322224Australia's imports from China (%)
25
17
149644443328Australia's Global Imports (%)
57
6555532226Australia's Global Exports (%)
75542213China's imports from Australia(%)
31
24666553212China's Global Imports (%)
42
12765544322225China's Global Exports (%)Total: US$ 45.4 billion Total: US$ 236.8 billion
Total: US$ 1,908.7 billion Total: US$ 2,200.0 billionTotal:  US$ 249.6 billion
Total: US$ 93.7 billion
 
Source:  UNSD Comtrade database.  
 
1.2  Trade in services and investment  
1.8.  In 2014 , Australia's shares of total commercial services exports and imports were 1.08% and 
1.30% respectively, while China 's share  was 4.71% of world export s and 7.98 % of world imports 
of services. With total commercial services exports of US$ 53 billion, and imports of US$62  billion, 
Australia was the world's 14th largest exporter and importer of commercial services. China  was 
both t he 3rd largest exporter (US$ 232 billion) and importer (US$ 382 billion).  
1.9.  Charts 1.3 and 1.4 below show global trade in commercial services for Australia and China  
(based on the period 2005 -2014). For both Parties, the available sets of data show an overall 
deficit in trade in com mercial services with the world . In the case of Australia, Travel, transport 
and other business services represent the three mainly traded services, in terms of both exports 
and imports. While this is also the case for China , service s classified under charges for the use of 
intellectual property and insurance and pension services  also represent an important proportion of 
China's  overall global exports . Based on data provided by Australia, C harts 1.3C and 1.3D show  
Australia's bilatera l trade in services with China  during 2012 -14. Australia's major imports include 
transport and travel services while exports are mainly classified under travel services. During the 
three year period before entry into force of the Agreement Australia ran a stable surplus in its 
services trade with China .  WT/REG36 9/1 
 
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  Chart 1.3 Australia:  Trade in commercial services with world (2005 -2014) and China 
(2012 -2014)  
010203040506070
2005 2007 2009 2011 2013A. Australia imports from world
2005 -2014
(US$ Billion)
Personal, cultural, and recreational services Other business services
Telecommunications, computer, and information services Charges for the use of intellectual property n.i.e.
Financial services Insurance and pension services
Construction services Travel services
Transport services Maintenance and repair services n.i.e.
Manufacturing services on physical inputs owned by others0102030405060
2005 2007 2009 2011 2013B. Australia exports to world
2005 -2014
(US$ Billion)
0.00.51.01.52.02.5
2012 2013 2014C. Australia import from China
2012 -2014
(US$ Billion)
0.01.02.03.04.05.06.07.08.0
2012 2013 2014D. Australia Export to China
2012 -2014
(US$ Billion)
Personal, cultural, and recreational services
 
Note:  
- No imports from world on Manufacturing services on physical inputs owned by others  (2006 -2014) and 
Construction (2005 -2014).  
- No imports from China on Construction services and Manufacturing services on physical inputs owned by 
others (2012 -2014);  Charges for the use of intellectual property n.i.e. (2012, 2013).  
- No Exports to China on  Manufacturing services on physical inputs owned by others (2012 -2014); 
Construction services (2014) . 
Source:  WTO Statistics database (2005 -2011), Australian authorities (2012 -2014) based on BMP6.  WT/REG36 9/1 
 
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  Chart 1.4 China : Trade in commercia l serv ices with world, 2005 -2014  
0200400600
2005 2007 2009 2011 2013A. China imports from world
2005 -2014
(US$ Billion)
Personal, cultural, and recreational services Other business services
Telecommunications, computer, and information services Charges for the use of intellectual property n.i.e.
Financial services Insurance and pension services
Construction services Travel services050100150200250300
2005 2007 2009 2011 2013B. China exports to world
2005 -2014
(US$ Billion)
 
Note:  For other business services the data (import and export) is missing for 2010 . 
Source:  WTO Statistics database based on BMP6 . 
 
1.10.   Charts 1.5 and 1.6 below depict each Party's foreign direct investment stocks and flows with 
the world during the period 200 0-2014. FDI flows of both Parties with the world has grown steadily 
in the case of China, while fluctuating during the period for Australia, with however a major 
setback (in both inward and outward FDI flows) reported in 2005 . Based on data reported by 
Australia, it  was a net recipient o f FDI for the period considered. The same trend can be observed 
based on data reported by China, though the order of magnitude differs.  Complete data on 
bilateral FDI are not available.  WT/REG36 9/1 
 
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  Chart 1.5 Australia: FDI stock and flow with world (2000-2014)  and with China 
(2012 -2014 ) 
0100200300400500600700
2000 2002 2004 2006 2008 2010 2012 2014Australia FDI stock with world
2000 -2014
(US$ Billion ) 
Inward Outward
-60-40-20020406080
2000 2002 2004 2006 2008 2010 2012 2014Australia FDI flow with world
2000 -2014
(US$ Billion) Inward
Outward
051015202530
2012 2013 2014Australia FDI stock with China 
2012 -2014
(US$ Million ) 
Inward
Outward
01234567
2012 2013 2014Australia FDI flow with China
2012 -2014
(US$ Million) 
Inward
Outward
 
Note:  Australia FDI in -flow with China in 2014 is not published.  
Source:  UNCTAD; World Invest Report 2014 and Australian Authorities (2001 -2013).  
Chart 1.6 China : FDI stock and flow with the world (2000-2014 )  
02004006008001,0001,200
2000 2002 2004 2006 2008 2010 2012 2014China FDI stock with world
2000 -2014
(US$ Billion ) 
Inward Outward
020406080100120140
2000 2002 2004 2006 2008 2010 2012 2014China FDI flow with world
2000 -2014
(US$ Billion) 
Inward
Outward
 
Source:  UNCTAD (2000 -2014) . WT/REG36 9/1 
 
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  2  CHARACTERISTIC ELEME NTS OF THE AGREEMENT  
2.1  Background Information  
2.1.  The Agreement was signed on 17 June 2015  and notified on 26 January 2016  under 
Article  XXIV:7(a) of GATT 1994 and Article V:7(a) of GATS (see document WT/ REG369/N/1 - 
S/C/N/858 ). Its conclusion follows the Trade and Economic Cooperation Framework between China 
and Australia, adopted in 2003, and is also consistent with  the APEC goals and princ iples.  
2.2.  The Agreement establishes a free trade area (Article 1.1). The text of the Agreement, 
together with its annexes, is available on the Parties' official websites:  
Australia : http://dfat.gov.au/trade/agreements/chafta/official -documents/Pages/official -
documents.aspx  
 
China :  http://fta.mofcom.gov.cn/Australia/australia_sp ecial.shtml  
 
2.3.  The Agreement is composed of 17  Chapters. Table  2.1 below summarizes the structure of the 
Agreement. A number of Annexes, including the Parties' tariff elimination schedules and the lists of 
reservations on cross -border supply of services and  establishment (non -conforming measures) and 
of specific commitments on trade in services also form part of the Agreement. Side letters on 
specific issues complement the text of the Agreement. The Agreement also includes memoranda of 
understanding on an in vestment facilitation arrangement, and on a work and holiday visa 
arrangement.  
2.4.  The Parties shall undertake a general review of the Agreement, with a view to furthering its 
objectives, within three years of the date of entry into force of the Agreement and at least every 
five years thereafter (Article 16.5).  
Table 2.1 Structure of the Agreement  
Titles, Chapters 
(including Annexes) 
and Protocols  Title/description  
Preamble   
Chapter 1  Initial provisions and defi nitions  
Chapter 2  Trade in goods  
Chapter 3  Rules of origin and implementation procedures  
Chapter 4  Customs procedures and trade facilitation  
Chapter 5  Sanitary and phytosanitary measures  
Chapter 6  Technical barriers to trade  
Chapter 7  Trade remedies  
Chapter 8  Trade in services  
Chapter 9  Investment  
Chapter 10  Movement of natural persons  
Chapter 11  Intellectual property  
Chapter 12  Electronic commerce  
Chapter 13  Transparency  
Chapter 14  Institutional provisions  
Chapter 15  Dispute settlement  
Chapt er 16 General provisions and exceptions  
Chapter 17  Final provisions  
  
Side Letters (6)  - on skills assessment and licensing;  
- on financial services  
- on education  
- on legal services  
- on transparency rules applicable to investor -State dispute settleme nt 
- on traditional Chinese medicine  
  
Memoranda of 
understanding (2)  - on investment facilitation arrangement  
- on a work and holiday visa arrangement  
Source:  WTO Secretariat based on the Agreement.  WT/REG36 9/1 
 
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  3  PROVISIONS ON TRADE IN GOODS  
3.1.  Chapter 2 of the Agreeme nt covers trade in goods. It is comp lemented by Chapters 3 
through 7 , which also contain disciplines applicable to trade in goods.10 
3.2.  Chapter 2, inter alia , governs the elimination of customs duties according to the Parties' 
Schedules. It also confirms the a pplicability of Article VII of the GATT 1994 and the WTO Customs 
Valuation Agreement (Article 2.6), and prohibits the Parties from adopting or maintaining a 
measure that is inconsistent with the WTO Import Licensing Agreement (Article 2.8 ).  
3.3.  A Committee on  Trade in Goods is established to address tariff and non -tariff barriers to 
trade in goods b etween the Parties (Article 2.15 ). It shall, among other functions, review Parties' 
non-tariff measures in certain circumstances to ensure that unnecessary obstacle s to trade are not 
created  (Article 2.7) . The Committee shall submit an initial progress report on its work relating to 
non-tariff measures , including any recommendations, within one year of the date of entry into 
force of the Agreement. The Committee shal l also review the implications of each periodic 
Harmonized System amendment and promptly recommend any necessary amendment to the 
Parties' Schedules of tariff concessions under the Agreement and/or the Annex containing the 
product specific rules of origin.  
3.1  Import duties and charges, and quantitative restrictions  
3.1.1   General provisions  
3.4.  The Parties agree to apply national treatment to each other's imports in accordance with 
Article III of GATT 1994, which is incorporated into and made part of the Agreement, mutat is 
mutandis (Article 2.3 ). 
3.5.  Neither Party shall ado pt or maintain any prohibition or restriction or measure having 
equivalent effect, including quantitative restrictions, on the import  of any good of the territory of 
the other Party, except as provided in t he Agreement or in accordance with the WTO Agreement  
(Article 2.7).   
3.6.  With respect to administrative fees and formalities, the Agreement builds on the provisions of 
Article VIII of GATT 1994 (Article 2.8). It also foresees that each Party shall make availab le on the 
internet details of fees and charges it imposes in connection with importation and exportation .11 
Consular transactions, including related fees and charges, shall not be required in connection with 
the importation of any good of either Party.  
3.1.2   Liberalization of trade and tariff lines  
3.7.  The Parties shall eliminate customs duties on originating goods of the other party in 
accordance with their Schedules, contained in Annex I to the Agreement. Moreover, n either Party 
shall increase any existing customs d uty, or adopt any new customs duty12, on an originating good 
of the other Party other than in accordance with the Agreement (Article 2.4) .  
3.1.3   Liberalization schedule  
3.8.  Annex I to the Agreement contains the Parties' respective tariff elimination programmes. Part 
1 of Annex I contains general notes applicable to the Parties' Schedules. Part 2  refers to Australia's 
Schedule, and Part 3  contains China's  tariff concessions.  
                                                
10 Chapters 3 through 7 contain disciplines on rules or origin; customs administration and trade 
facilitation; technical barriers to trade; sanitary and phytosanitary measures; and trade remedies.  
11 Australia -related information can be found at https://www.border.gov.au/Busi/cost -recovery . China-
related information is not provided on a single portal website. The fees and charges can be found on the official 
websites of the following related government agencies of China: the General Administration of Customs; the 
General Administration of Quali ty Supervision, Inspection and Quarantine; the Ministry of Commerce; and the 
Ministry of Finance.  
12 A Party may , however , raise a customs duty to the level established in its Schedule to Annex 2 -A 
following a temporary unilateral reduction.  WT/REG36 9/1 
 
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  3.9.  The base rates of customs duty are  set out in both Parties' Schedules . They reflect the MFN 
applied rates.   
3.1.3.1   Australia  
3.10.   Australia's applied tariff in 2015  consisted of 6,184 lines at the HS eight -digit level 
(HS 2012). 99.73% of the tariff rates were ad valorem  and 17 lines had non -ad valorem  tariffs.13  
3.11.   Three  staging categories apply to the eliminat ion of customs duties by Australia:  
 Customs duties for goods in category "0" were eliminated or were already duty free on 
the date of entry into force of the Agreement  (20 December 2015) ; 
 Customs duties for goods in category "3" shall be reduced to an boun d at zero over 
three equal annual stages beginning from the entry into force of the Agreement . The 
goods shal l be duty -free on 1 January 2017 ;  
 Customs  duties for goods in category "5 " shall be reduced to an bound at zero over five 
equal annual stages begi nning from the entry into force of the Agreement. The goods 
shall be duty -free on 1 January 201 9. 
 
3.12.   Table 3.1 shows tariff elimination commitments by Austra lia under the Agreement. In 2015 , 
2,943 lines were duty free on an MFN basis, representing 47.6% of A ustralia's t otal tariff, 
corresponding to 37.3 % of its imports from China  during 2012-2014. Immediately following the 
entry into force of the Agreement, an additional 2, 719 lines ( 44% of Australia's tariff) also became 
duty-free for imports from China . This resulted in 91.6% of Australia's tariff becoming duty free, 
corresponding to 81.6% of Australia's total imports from China  (during 2012 -2014). Further tariff 
lines will become duty free in 2017 , and 2019 , which corresponds to Australia's full implementat ion 
of its tariff elimination programme. As a consequence, four years after the entry into force of the 
Agreement, and at the end of the implementation period, the entirety of the Australian tariff will 
be duty free for imports from China .  
Table 3.1 Australia  
Tariff elimination commitments under the Agreement and corresponding average trade  
Duty phase -out 
period  Number of 
lines  % of total 
lines in 
Australia's 
tariff 
schedule  Value of Australia's 
imports from China  
(2012 -2014)  
US$ million  % of Australia's 
total imports  
from China  
2012 -2014  
2015 (MFN)  2,943  47.6 16,919.5  37.3 
2015 2,719  44.0 20,115.6  44.3 
2017 427 6.9 7,543.5  16.6 
2019 95 1.5 780.5  1.7 
Remain dutiable  - - - - 
Total  6,184  100.0  45,359.1  100.0 
Note:  For the calculation of averages, specific rates are excluded and the ad valorem  parts of alternate 
rates are included . 
 Based on the HS 2012 nomenclature.  
Source:  WTO estimates based on data from Australia and WTO -IDB. 
 
3.13.   Table 3.2 shows Austral ia's tariff elimination, by HS section. No tariff line will remain subject 
to duties once implementation is completed ( in 2019 ). 
                                                
13 Eight lines w ere compound duties, five lines consisted in specific duties, and 4 lines were mixed 
duties.  WT/REG36 9/1 
 
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  Table 3.2 Australia: Tariff elimination under the Agreement, by HS Section  
HS 
Section  MFN 
Average  
% No. of 
lines  Duty -free 
lines under 
the  
MFN 2015  Number of duty -free lines 
under the Agreement  Remain 
dutiable  Avg. Final 
Tariff  
(Dutiable)  2015  2017  2019  
I 0.0 339 332 7     
II 0.7 314 270 42 2    
III 1.8 49 31 18     
IV 2.6 287 139 144 4    
V 0.4 198 184 14     
VI 1.4 872 625 245 2    
VII 4.5 238 24 155 48 11   
VIII 3.4 92 29 60 2 1   
IX 3.3 143 50 93     
X 3.7 283 72 204 4 3   
XI 4.1 911 160 513 187 51   
XII 2.5 60 30 10 20    
XIII 3.4 161 50 103 5 3   
XIV 1.0 53 42 11     
XV 3.5 583 171 335 66 11   
XVI 2.9 953 405 505 33 10   
XVII 3.5 238 72 117 48 1   
XVIII 0.9 240 196 40 2 2   
XIX 1.6 19 13 6     
XX 3.6 144 41 97 4 2   
XXI 0.0 7 7      
Total  2.6 6,184  2,943  2719  427 95 - - 
Note:  For the calculation of  averages, specific rates are excluded and the ad valorem  parts of alternate 
rates are included.  
Based on the HS 2012 nomenclature . 
Source:  WTO estimates based on data from Australia and WTO -IDB. 
 
3.1.3.2   China  
3.14.   China's  applied tariff in 2015 consisted of 8,238  lines at the HS eight -digit level (HS  2012). 
99.53 % of the tariff rates were ad valorem  and 39 lines had non -ad valorem  tariffs.14  
3.15.   Thirteen  staging categories apply to the elimination of customs duties by China : 
 Customs duties for goods in category "0" were eliminated or were already duty free on 
the date of entry into force of the Agreement (20 December 2015);  
 Customs duties for goods in eight other categories have started to be removed on the 
date of entry into force of the Agreement. They shall be eliminat ed in, respectively, 3, 5, 
6, 8, 9, 10, 12, and 15  equal annual stages beginning on 1 January 2015. For category 
"3" the goods shal l be duty -free on 1 January 2017 and the goods in category "15 " shall 
be duty free on 1 January 2029; 
 Customs duties for good s in categor ies "C -10*" and "C -12*" have started to be reduced 
on the date of entry into force of the Agreement. They shall be eliminated in, 
respectively, 10 and 12 equal annual stages beginning on 1 January 2015. The goods 
shall therefore be duty -free on , respectively, 1 January 2024 and 1 January 2026. In 
addition, the special agricultural safeguard mechanism in Article 2.14 shall apply for 
products contained in both categories.  
                                                
14 Thirty -four lines were specific duties, and 5 lines consisted in other duties.  WT/REG36 9/1 
 
- 14 - 
 
   For customs duties for goods in category entitled "country tariff quota", th e country -
specific tariff quota in Article 2.13 shall apply for products of Australian origin, with the 
in-quota duty rate being zero and the base rate of duty remaining as out-quota duty rate  
 Customs  duties for goods in category "D" remain at the base rat e, as indicated in China's 
Schedule of tariff  concessions (Part 3 of Annex I). 
 
3.16.   Table 3.3 shows tariff elimination commitments by China  under the Agreement. In 2015, 
692 lines were duty free on an MFN basis, representing 8.4% of China's  total tariff, corre sponding 
to 71.4% of its imports from Australia  during 2012 -2014. Immediately following the entry into 
force of the Agreement, an additional 1,710  lines ( 20.8% of China's  tariff) also became duty -free 
for imports from Australia . This resulted in 29.2% of China's  tariff becoming duty free, 
corresponding to 85.4% of China's  total imports from Australia  (during 2012 -2014). Further tariff 
lines will become duty free in 2017,  2019, 2020, 2023, 2024, 2026 and 2029 , which corresponds 
to China's  full implementation  of its tariff elimination programme. As a consequence, ten years 
after the entry into force of the Agreement, 7,970 lines or 96.6% of the tariff will have be come 
duty free. At the end of implementation , fourteen  years after the entry into force of the 
Agreement, 96.8%  of China's  tariff will be duty free for imports from Australia15, corresponding to 
95.1% of China's total imports f rom Australia . 3.2% of China's tariff will remain dutiable, 
corresponding to 263 tariff lines and representing 4.9% of China's t otal imports from Australia.  
Table 3.3 China  
Tariff elimination commitments under the Agreement and corresponding average trade  
Duty phase -out 
period  Number of 
lines  % of total 
lines in 
China's tariff 
schedu le Value of China's 
imports from 
Australia  
(2012 -2014)  
US$ milliona % of China's total 
imports from  
Australia  
2012 -2014  
MFN (2015)  692 8.4 61,958.7  71.4 
2015 1710 20.8 12,163.3  14.0 
2017 2 0.0 4,728.0  5.4 
2019 5418 65.8 2,154.9  2.5 
2020 2 0.0 6.4 0.0 
2022 18 0.2 487.8  0.6 
2023 60 0.7 338.9  0.4 
2024 63 0.8 594.3  0.7 
2026 5 0.1 115.2  0.1 
2029 5 0.1 0.2 0.0 
Remain dutiable  263 3.2 4,275.3  4.9 
TOTAL  8238  100.0  86,823.0  100.0  
a Import coverage from HS chapter 1 to 97. Some of the import from Austr alia has been recorded 
outside the chapter 1 to 97. In particular, under the tariff line 98010010 , there is an import volume 
of 6,931.4  million (2012 -2014 Average) which is not included under the table above.  
Note:  Tariff lines subject to in -quota rates a re excluded in the computation . For the calculation of 
averages, specific rates are excluded and the ad valorem  parts of alternate rates are included .  
 Based on the HS 2012 nomenclature.  
Source:  WTO estimates based on data from China and WTO -IDB. 
 
3.17.   Table  3.4 shows China's tariff elimination, by HS section. The 263 lines that will remain 
subject to duties once implementation is completed (in 2029) are found in sections I (Live animals 
and animal products); II (Vegetables); III (animal or vegetable fat and oils); IV (prepared 
foodstuffs, and beverages); VI (chemicals); IX (wood and wood products); X (pulp of wood); 
XI (textiles); and XVI (machinery), with final average tariffs at between 6.7% and 50%, the duties 
for the remain dutiable rates set at the same level as MFN rate s as illustrated by Chart 3.1  below. 
The highest average tariffs for lines remaining dutiable are found in HS 10 (some cereals at 
62.2%); 17 (some sugars and sugar confectionery at 50%); and 31 (some fertilizers at 50%) .  
                                                
15 Ten years after the entry into force of the Agreement, 95% of China's imports fr om Australia will be 
duty free.   
  WT/REG369/1  
 
- 15 - Table 3.4 China: Tariff elimination under the Agreement, by HS Section  
HS 
Section  MFN 
Average  
% No. of 
lines  Duty -free 
lines under 
the  
MFN 2015  Number of duty -free lines under the Agreement  
Remain 
dutiable  Avg. Final 
Tariff   
(Dutiable)  2015  2017  2019  2020  2022  2023  2024  2026  2029  
I 11.6 488 63 8  379  2 9 21 5  1 15.0 
II 14.3 510 54 38  379   7    32 46.6 
III 13.0 56  1  25       30 10.2 
IV 17.7 304 1 45  234  3     21 34.6 
V 3.8 201 37 117 1 46         
VI 6.5 1,282 9 663  607       3 50.0 
VII 9.4 271 1 6  264         
VIII 12.3 106  9 1 81 2 13       
IX 4.4 207 75 40  49       43 7.0 
X 5.3 161 35   8       118 6.7 
XI 11.4 1,141   171  914   44    12 36.2 
XII 17.9 71    71         
XIII 13.5 194 1 6  187         
XIV 10.6 87 32 10  45         
XV 7.3 764 4 258  502         
XVI 8.3 1,496  280 204  1,005       4 3 10.0 
XVII 13.1 351 1 60  248    42     
XVIII 9.9 334 34 74  225      1   
XIX 13.0 21    21         
XX 11.6 184 63   121         
XXI 9.6 9 2   7         
Total  9.7 8,238  692 1,710  2 5,418  2 18 60 63 5 5 263 16.1 
Note:  Tariff lines subject to in -quota rates are excluded in the computation . For the calculation of averages, specific rates are excluded and the ad valorem  parts of alternate 
rates are inc luded .  
 Based on the HS 2012 nomenclature.  
Source:  WTO estimates based on data from China  and WTO -IDB. WT/REG36 9/1 
 
- 16 - 
 
  Chart 3.1 China : Average of  dutiable rates, by HS Chapter  
010203040506070
03 10 11 12 15 16 17 24 31 44 48 49 51 52 56 84 85Average Duty Rate
HS ChapterPreferential MFN
 
Note:  Tariff lines subject to in -quota rates are excluded in the computation. For the c alculation of averages, 
specific rates are excluded and the ad valorem  parts of alternate rates are included.  
 Based on the HS 2012 nomenclature . 
Source:  WTO estimates based on data provided by China and IDB, WTO . 
3.1.4   Tariff rate quotas  
3.18.   With respect to Country  Specific Tariff Quota  (Article 2.13) , China's tariff rate quotas (TRQs) to 
certain goods  originating in Australia are specified in its Schedule to Annex I  (Category entitled 
"country specific tariff quota) . China  grants duty -free treatment to imports of s uch products of 
Australian origin up to the quantity for each year as summarized be low. Imports of Australian 
products in excess of the specified quantity in Annex 2 -A shall be subject to the MFN applied rate. The 
quantities of the CSTQ beyond the last sta ge specified in Annex 2 -A shall remain at the same level as 
the last stage.  
Table 3.5 Products covered by China's country specific tariff quota commitments under the 
Agreement  
HS Code  Product description  
51011100  Greasy shorn wool, not carded or combed  
51011900  Greasy wool (excl. shorn), not carded or combed  
51012100  Degreased shorn wool, not carbonised, not carded or combed  
51012900  Degreased wool (excl. shorn), not carbonised, not carded or combed  
51013 000 Carbonised wool, not carded or combed  
51031010  Noils of wool, not garneted stock  
Source:  WTO Sec retariat based on the Agreement (Annex 2 -A). 
Table 3.6 Quantity of the Country Specific Tariff Quota  
Stage  Quantity of the Country Specific Tariff quota (tonnes)  
1 30,000  
2 31,500  
3 33,075  
4 34,729  
5 36,465  
6 38,288  
7 40,203  
8 42,213  
9 44,324  
Note:  The specified quantities are expressed in terms of clean equivalent weight.  
Source:  WTO Sec retariat bas ed on the Agreement (Annex 2 -A). WT/REG36 9/1 
 
- 17 - 
 
  3.19.   China shall operate the CSTQ in a transparent manner and, on request of Australia, provide 
information on the quantity of the CSTQ issued. Unless otherwise agreed, the rules applying to the 
administration of the CSTQ for th e products of Australian origin will be consistent with the Detailed 
Rules for Implementation of Administration on Import Tariff Quotas of Wool and Wool Tops in 201516 
or any successor rules in force in any given calendar year.  
3.2  Rules of origin  
3.20.   Chapter 3 con tains provisions on rules of origin and is supplemented by Annexes II (Product 
Specific Rules Schedule);  3-A (Certificate of origin); and 3-B (Declaration of origin) .  
3.21.   A good qualifies as originating  in a Party  if it:  
 is wholly obtained  or produced, as de fined in Article 3.3 , in a Parties;  
 is produced entirely in the territory of one or both Parties , exclusively from originating 
materials;  
 is produced in the territory of one or both of the Parties, using non -originating materials, 
complies with the applica ble product specified rule contained in Annex II to the Agreement, 
and meets the other applicable provisions o f Chapter 3.  
3.22.   Annex II contains product specific rules of origin and the conditions that need to be fulfilled for 
products to qualify as originati ng in case the goods are processed in one or both Parties. While a 
change in tariff classification  (Article 3.4) , at the 2, 4, or 6 -digit levels, as indicated in Section C of 
Annex II , constitutes the main criteria used to determine origin in cases of subs tantial transformation 
of goods, the regional value content (RVC) can be used as an alternative criterion in a number of 
cases.17 The RVC is calculated according to the me thods defined under Article  3.5 (Regional value 
content). When the RVC is used as an a lternative method to determine the origin of a good, this 
means that the good must have a RVC of between 30% and 60%, as indicated in Annex II . Specific 
rules applicable to the chemic al chapter (HS Chapters 27 to 4 0 that is the product of a chemical 
reacti on) are contained in Section B to Annex II. If the chemical reaction occurred in the territory of a 
Party, the product of such chemical reaction shall be considered to be an originating good of a Party. 
Chemical reactions are defined in Section B of Annex II. 
3.23.   Non-originating products, whose value does not exceed 10% of the value of the good, may 
nonetheless be considered an originating good .  
3.24.   Chapte r 3 contains, under Articles 3.8  through 3.13 , disciplines on accessories, spare parts and 
tools; fungible mat erials; packing, packages and containers; neutral elements; minimal operations or 
processes; and direct consignment .  
3.25.   Cumulation of origin is governed by  the provisions of Article 3.6. Originating goods of a Party 
used in the production of a good in the te rritory of the other Party shall be considered to originate in 
the territory of the other Party . 
3.26.   Section B of Chapte r 3, complemented by Annexes 3 -A18 and 3 -B19, contains disciplines on 
implementation  procedures, covering in particular: certificate of origin ; declaration of origin; claims 
for preferential tariff treatment; minor errors or discrepancies; waiver or certificate of origin or 
declaration of origin; amendments to certificates or declarations of origin; retention of origin 
documents; verification of  origin; denial of preferential tariff treatment; goods transported en route  
after exportation; and review.  
                                                
16 China's Ministry of Commerce Announcement No. 65 of 2014.  
17 This is particularly the case for goods classified under HS Chapters  09 (coffee, tea, mate and spices); 
17 (sugars and sugar confectionery); 18 (cocoa and cocoa p reparations); 35 (casein products); 70 (glass mirrors); 
78 (lead articles); 79 (zinc articles); 80 (tin articles); 84 (some mechanical appliances and machines); 
85 (electrical appliances); 87 (vehicles); 89 (ships, boats and floating structures); 90 (some optical and 
photographic equipment); and 95 (sport equipment).  
18 Annex 3 -A lists the data elements and give instructions on the content of certificates of origin.  
19 Annex 3 -B provides for a model format of a declaration or origin.  WT/REG36 9/1 
 
- 18 - 
 
  3.3  Export duties and charges, and quantitative restrictions  
3.27.   Neither Party shall ado pt or maintain any prohibition or restriction or measure having 
equivalent effect, including quantitative restrictions, on the exportation  of any good destined for the 
territory of the  other Party, except as provided in the Agreement or in accordance with the WTO 
Agreement  (Article 2.7).   
3.4  Regulatory provisions on trade in  goods  
3.4.1   Standards  
3.28.   Chapter 5 covers sanitary and phytosanitary measures (SPS) and Chapter 6 addresses 
technical barriers to trade (TBT).  
3.4.1.1   Sanitary and phytosanitary measures  
3.29.   Under the Agreement, SPS matters are regulated through Chapter 5. The Parties affirm their 
rights and obligations with respect to the other under  the WT O Agreement on SPS  (Article  5.4). In 
particular, provisions of the WTO Agreement on SPS relating to regionalisation and equivalence  shall 
be accepted by each Party (Article 5.7). Moreover, each Party shall implement its control, inspection 
and approval procedures in accordance with its rights and obligations under that agreement 
(Article  5.8). Transparency provisions contain disciplines on notification ; the use of international 
standard, gui delines or recommendations; procedures to be followed where urgent problems of health 
protection arise; and notification of non -compliance (Article 5.5). The Parties shall explore 
opportunities for further cooperation and collaboration on SPS matters at th e bilateral, regional and 
multilateral levels (Article 5.6).  The Parties' mutual commitments with respect to the provision of 
technical assistance and capacity building are covered by Article 5.9.  
3.30.   A Committee on Sanitary and Phytosanitary Measures is estab lished under the Agreement and 
each Party shall designate a contact point responsible for coordinating the implementation of 
Chapter  5 (Article 5.11).  
3.31.   Article 5.10  provides that the dispute resolution  mechanism set out in Chapter 15  does not 
apply to Chapt er 5.  
3.4.1.2   Technical barriers to trade  
3.32.   Chapter 6  covers TBT and applies to all standards, technical regulations, and conformity 
assessment procedures of the central level of government that may affect trade in goods between the 
Parties. The Parties affirm thei r rights and obligations under the W TO Agreement on TBT (Article 6.4 ).  
3.33.   Building on WTO TBT disciplines, the Agreement establishes joint disciplines for the use of 
international standards, guides and recommendations (Article 6.5 ); positive consideration to  be given 
to accepting technical regulations of one Party as equivalent to th e other Party's own (Article 6.6 ); 
and conformity assessment pr ocedures (Article 6.7 ). The Parties also agree to work cooperatively in 
the fields of standards, technical regulatio ns and conformity assessment procedures to facilitate trade 
between them (Article 6.9 ). Article 6 .8 elaborates on transpare ncy requirements; Article 6.10 covers 
information exchange between the Parties; and Article 6.11  addresses how the Parties shall cons ider 
further cooperation and technical assistance programs in the TBT field.   
3.34.   A Committee on Technical Barrier to Trade  is established under the Agreement (Article 6.13 ). 
3.35.   Article 6.12  provides that the dispute settlement provisions set out in Chapter 20 on  dispute 
resolution mecha nism does not apply to Chapter 6 . 
3.4.2   Safeguard mechanisms  
3.36.   Chapter 7  refers , inter alia , to the use of bilateral and global safeguard measures, while 
Article  2.14 establishes the applicable disciplines for the special agricultural safe guard measures under 
the Agreement.  WT/REG36 9/1 
 
- 19 - 
 
  3.4.2.1   Global safeguards  
3.37.   Each Party retains its rights and obligations under Article XIX of GATT 1994 and the WTO 
Agreement on Safeguards . The Agreement shall not confer any additional rights or impose any 
additional obligatio ns on the Parties with respect to measures applied under them. 
3.4.2.2   Bilateral safeguards  
3.38.   Disciplines on bilateral safeguard measur es are contained in Articles 7.2 through 7.7.  During 
the transition period20, a Party may apply a bilateral safeguard measure. Such a measure may consist 
of either (i) a suspension of the further reduction of the customs duty on the good provide d for under 
the Agreement, or (ii) an increase in the rate of customs duty on the good to a level not to exceed the 
lesser of the MFN applied r ate of duty in effect at the time the safeguard measures is applied, and the 
MFN applied rate of duty on the good in effect on the day immediately preceding the date of entry into 
force of the Agreement. Neither tariff rate quotas nor quantitative restrict ions would be permissible 
forms of bilateral safeguard measures.  
3.39.   A bilateral safeguard measure may be applied for such period of time as may be necessary to 
prevent or remedy seri ous injury pursuant to Article 7 .2 of the Agreement. The total period of 
application of a bilateral safeguard measure, including the period of initial application and any 
extension thereof, shall not exceed three years.  Such measure shall be terminated in any case at the 
end of the transition period.  A bilateral safeguard measure s hall not be applied again on a product 
which has been subject to such a measure for a period of time equal to that during which the previous 
bilateral safeguard measure had been applied, provided that the period of non -application is at least 
two years . Where the expected duration of a bilateral safeguard measure is over one year, the 
applying Party shall progressively liberalize it at regular intervals.  
3.40.   According to Article 7.4, b ilateral safeguard measures may only be applied following an 
investigation in  accordance with the procedures and requirements provided for in Articles 3 and 4.2 of 
the WTO Safeguard Agreement. These two articles are incorporated into and made part of the 
Agreement, mutatis mutandis . Investigations shall be completed within one year  of initiation. No 
bilateral safeguard measure or provisional safeguard measures (governed by A rticle 7.5) shall be 
applied against a particular good while a global safeguard measure under Article XIX of GATT 1994 
and the WTO Safeguard Agreement in respect  of that good is in place.  Similarly a bilateral safeguard 
measure may not be maintained on a product that would become subject to a general safeguard 
measure.  
3.41.   A Party initiating a bilateral safeguard investigation, taking a decision to apply or extend a 
bilateral safeguard or taking a decision to liberalize a bilateral safeguard taken shall immediately 
notify the other Party.  Such Party shall provide adequate  opportunity for prior consultations with a 
view to reviewing the information, exchanging views on the bilateral safeguard measure and reaching 
an agreement on compensation.  
3.42.   Consultations regarding appropriate trade liberalising compensation in the form of concessions 
having substantially equivalent trade effects or equivalent to the value of the addit ional duties 
expected to result from the bilateral safeguard measure  shall begin within 30 days of the application 
of the bilateral safeguard measure (Article 7.7) . If the Parties are unable to agree on compensation, 
the Party against whose originating goo d the safeguard measure is applied may suspend the 
application of concessions that have trade effects substantially equivalent to the safeguard measure. 
The obligation to provide compensation and the corresponding right to suspend concessions shall 
termina te on the date of the termination of the safeguard measure.  
3.4.2.3   Special agricultural safeguard measures  
3.43.   A special agricultural safeguard mechanism is established by Article 2.14. It is only available to 
China as specified in Annex 2 -B to the Agreement in accor dance with Article 2.14.The possibility  of 
                                                
20 The terms "transition p eriod" in relation to a particular product means the three -year period from the 
date of entry into force of the Agreement. For any product for which the date on which the customs duty on that 
product is to be eliminated in accordance with Annex I (Schedule s of tariff concessions) is more than three years, 
"transition period" shall mean the tariff elimination period for that product.  WT/REG36 9/1 
 
- 20 - 
 
  imposing a (safeguard) duty  is granted to China  when the aggregate volume of imports of certain 
Australian products21, listed in China 's Schedule in Annex 6 -A, exceeds the trigger quantity set out in 
the Annex. The sum of the (safeguard) additional duty and any other customs duties applied to the 
products in question shall not exceed the  lesser of the MFN applied rate of customs duty in effect on 
the date on which the special agricultural safeguard measure is applie d, or the base rate .22 In the last 
stage of the application of a trigger level for the respective products as set out in Annex 2 -B, the 
Committee on Trade in Goods will conduct a re view of the special agricultural safeguard measure. In 
case the Committee de termines that serious injury has occurred, then a further review will take place 
six years later, and every six years thereafter as required.  
3.44.   Agricultural safeguard measures may not be maintained beyond the end of the calendar year in 
which it they are app lied. Moreover, they may not be maintained if the period specified in the 
agricultural safeguard provisions of the Schedule to Annex 2-B has expired. This period ranges from 
15 years (for beef products) to 17  years (for milk powder) from entry into force o f the Agreement.  
3.45.   Agricultural safeguard measures may not be applied or maintained, on the same good, at the 
same time a bilateral safeguard, or a global safeguard, based on Article XIX of the GATT 1994 and the  
WTO Agreement on Safeguard  is also applied.  
3.46.   Transparency disciplines are also contained in Article 2.14, in connection to the application of 
the special agricultural safeguard measure.  
3.4.2.4   Measures to safeguard the balance -of-payments  
3.47.   Restrictive import measures to safeguard the balance -of-payment, as wel l as those taken in 
serious external financial difficulties, may be taken in accordance with GATT 1994 and the 
Understanding on the Balance -of-Payments Provisions of the GATT 1994 . 
3.4.3   Anti-dumping and countervailing measures  
3.48.   Article 7.9  covers antidumping while Article 7.10 addresses, inter alia , countervailing measures.  
3.49.   Each Party retains its rights and obligations under the WTO Agreement  on Subsidies and 
Countervailing Measures  with regard to the application of antidumping and countervailing measures  
and und er the WTO Agreement on Implementation of Article VI of the GATT 1994 .  
3.50.   Articles 7.9 and 7.10 reiterate  notification obligations and underline the Parties' commitments 
to afford reasonable opportunities to enhance dialogue23, and to consult with a view to c larifying the 
factual situation and to arriving at mutually agreed solutions .  
3.4.4   Subsidies and State -aid 
3.51.   Article 7.10 contains some disciplines on subsidies.  While it confirms that each Party retains its 
rights and obligations under the WTO Agreement on Subs idies and Countervailing Measures, it also 
states that the Parties shall ensure transparency of subsidy measures by exchanging their 
notifications to the WTO pursuant to Article XVI:1 of the GATT 1994 and Article 25 of the WTO 
Agreement on Subsidies and Co untervailing Measures.  
3.52.   Each Party retains  its rights and obligations under the WTO Agreement on Subsidies and 
Countervailing Measures with regard to the application of antidumping and countervailing measures.  
 
                                                
21 Annex 2 -B sets out the goods originating in Australia that may be subject to agricultural safeguard 
measures under Article 2.14. The products concerned are: (a) some beef products (HS 02011000; 02012000; 
02013000; 02021000; 02022000; and 02023000); and b) some milk powder (HS 04022100 and 04022900). 
Annex 2 -B also contain, for each stage, the applicable quantity trigger level.  
22 The "base rate" is meant to be the starting point of elimination of customs duties  as indicated in the 
Parties' Schedules to Annex 1 -A. 
23 For instance, in matters of antidumping, through the regular holding of a High Level Dialogue on Trade 
Remedies.  WT/REG36 9/1 
 
- 21 - 
 
  3.4.5   Customs -related procedures  
3.53.   Chapter 4 covers c ustoms administration and trade facilitation . It applies to customs 
procedures applied to the goods traded and the movement of means of transport between the Parties 
(Article 4.1).  The Parties agree on transparency disciplines, including the establishment  of enquiry 
points, (Article 4.7 ); use of information technology to support customs operations  in a paperless 
trading context  (Article 4 .6); enhancing the use of risk management techniques in the administration 
of customs procedures  (Article 4.5); and simpl ification of customs procedures for the efficie nt release 
of goods (Article  4.10). Chapter 4 also contains rules on review and appeal of decisions taken by 
customs administration and advance rulings (Article s 4.8 and 4.9); and customs cooperation 
(Article  4.4), including through consultation between the customs administrations of the Parties 
(Article 4.14) . Specific disciplines are set in relation to the treatment of perishable goods 
(Article  4.11); for the temporary admission of goods (Article 4.12); accep tance of copies of supporting 
documents required for imported goods (Article 4.13) .  
3.54.   With respect to the administration of trade regulations , Article 2.10 builds on Articles X and VIII 
of the GATT 1994.  
4  PROVISIONS ON TRADE IN SERVICES  AND INVESTMENT  
4.1.  Chapte r 8 contains disciplines on trade in services , while Chapter 9 covers investment .24 
Annex  III to the Agreement  constitute s an integral part  of the Parties' commitments under these two 
Chapters.  For Australia, it includes market access commitments scheduled on a negative list basis. For 
China, it includes market access commitments scheduled in a positive list basis.  
4.2.  Chapter 10 complements the rules and disciplines on trade in services and investment as applied 
to measures affecting the movement of natural per sons of a Party into the territory of the other Party.  
4.3.  A review clause is contained in Article 8.24. The Parties shall consult within two years of the date 
of entry into force of the Agreement and every two years thereafter, to review the implementation of  
Chapter 8 and consider other trade in services issues of mutual interest, with a view to the 
progressive liberalization of the trade in services between them. In case of unilateral liberalization by 
a party, the other party may request consultations to di scuss the measure. As mentioned below, after 
the entry into force of the Agreement, at a time to be mutually agreed by them, the parties shall 
initiate a next round of negotiations on trade in services.  
4.4.  The Agreement established a Committee on trade in ser vices (Article 8.20), as well as contact 
points (Article 8.21). It also established a Committee on investment (Article 9.7).  
4.1  Scope and definitions  
4.5.  Chapter 8  applies to measures of a Party affecting trade in services, which is defined as the 
supply of a ser vices through any of the four modes of supply, as identified under the GATS. Chapter 8  
does not apply  to all measures affecting air traffic rights or measures affecting services directly 
related to the exercise of air traffic rights and air traffic control  and air navigation services .25 Also 
excluded from the coverage of Chapter 8 are: government procurement; services supplied in the 
exercise of governmental authority ; subsidies or grants; and measures affecting natural persons 
seeking access to the employme nt market .  
4.2  Denial of benefits  
4.6.  In relation to trade in services, subject to prior notification and consultation, a Party may deny 
the benefits of chapter 8 to a service supplier of the other Party if the service supplier is a juridical 
person owned or cont rolled by persons of a third -party or of the denying Party, and has no 
                                                
24 The term "investment" covers every kind of asset that an investor owns or controls, directly or indirectly, 
which has the characteristics of an investment, such as the commitment of capital or other resources, the 
expectation of gain or profit, or the assu mption of risk. Investments may take a variety of forms.  
25 The following air -transport related measures are however covered by Chapter 8: aircraft repair and 
maintenance services; the selling and marketing of air transport services; computer reservation sy stem services; 
airport operation services; and also: ground handling services; and specialty air services.  WT/REG36 9/1 
 
- 22 - 
 
  substantive business operations in the territory of the other Party (Article 8.17) . In relation to 
investment however, the Agreement authorizes a Party to deny the benefits of Chapter 9  to an 
investor of the other Party and to investment of that investor if the investor is an enterprise owned or 
controlled either  by persons of a third -party or of the denying Party, and that has no substantive 
business operations in the territory of the o ther Party.  The benefits of Chapter 9 may also be denied 
by a Party to an investor that is an enterprise of the other Party and to investments of that investor if 
persons of an third -party own or control the enterprise and the denying Party adopts or maint ains 
measurers with respect to the third -party or a person of the third -party that prohibit transactions with 
the enterprise or that would be violated or circumvented if the benefits of Chapter 9 were accorded to 
the enterprise or its investments (Article 9.6). 
4.3  General provisions on trade in services  
4.3.1   Market access  
4.7.  In relation to trade  in services , and according to Article 8.6, China  shall accord services and 
service suppliers of Australia treatment no less favourable than that provided for under the terms, 
limitations and conditions specified and for the sectors or sub -sectors listed in China's Schedule of 
specific commitment contained in Annex III.  For Australia, measures of the types defined in Article 
8.11 shall not be adopted or maintained in relation to  access to its market by Chinese services or 
service providers, unless such existing measures are listed in Section A of Australia's Schedule of 
specific commitments in Annex III. Possible future non -conforming measures by Australia are listed in 
Section B  its Schedule in Annex III.   
4.8.  Chapter 9 on investment does not contain  a discrete  market access article  along the lines of 
GATS Article XVI, but Article 9.3 on national treatment in relation to investment provides for market 
access  through the coverage of t he national treatment provision with respect to investment is not 
exactly the same for Australia and for China, as underlined below.  
4.3.2   National treatment and MFN  
4.9.  In relation to trade  in services , Articles 8.5 and 8.7 contain national treatment and MFN rules 
binding  China (using the positive listing approach) with respect to measures applicable to Australian  
service s and service  providers. MFN treatment is granted by China to Australian services and service 
providers in respect of the services sectors listed b y China in Annex 8 -A and subject to any conditions 
and qualifications set out therein .26 The Agreement also clarifies that China's commitment to grant 
MFN treatment to Australian services and service providers does not cover possible preferential 
treatment granted by China to investors of Hong Kong, China; Macao, China; and the Separate 
Customs Territory of Taiwan, Penghu, Kinsmen and Matsu (Chinese Taipei).  
4.10.   The corresponding disciplines on national treatment and MFN binding Australia (using the 
negative li sting approach) with respect to measures applicable to Chinese services and service 
providers are contained in Articles 8.10 and 8.12. Preferential treatment granted to third -parties 
through free trade agreements or multilateral international agreement in force prior to the entry into 
force of the Agreement are reserved, while, in the case of similar agreements concluded after the 
entry into force of the Agreement, a consultation mechanism is foreseen to discuss the possibility of 
extending, under the Agree ment, such preferential treatment.  
4.11.   In relation to investment , similar provisions  on national treatment and MFN treatment  are 
contained in Articles 9.3 and 9.4  with respect to the Parties' investors and their investments when 
those are related to the establ ishment, acquisition, expansion, management, conduct, operation, and 
sale or other disposition of investments. It should be noted nevertheless that China does not commit, 
unlike Australia with respect to Chinese investors, to accord national treatment with  respect the 
establishment or acquisition of investment in its territory by Australian investors.  
                                                
26 The sectors contained in Annex 8 -A cover all or parts of environmental services; constructions and related 
engineering services; services incidenta l to forestry; engineering services; integrated engineering services; 
computer and related services; tourism and travel related services; some scientific and technical consulting 
services; securities services; and some education services.  WT/REG36 9/1 
 
- 23 - 
 
  4.12.   With respect to MFN disciplines27 in connection with investment , the Agreement clarifies that 
China's commitment to grant MFN treatment to Australian investor s does not cover possible 
preferential treatment granted by China to investors of Hong Kong, China; Macao, China; and the 
Separate Customs Territory of Taiwan, Penghu, Kinsmen and Matsu (Chinese Taipei).  Both Parties 
reserve the right to adopt or maintain preferential treatment to investors of third -parties in 
accordance with any bilateral or multilateral international agreement involving aviation; fisheries; or 
maritime matters, including salvage. Bilateral or multilateral international agreements in force  prior to 
the entry into force of the Agreement are also reserved, with respect to the application of the MFN 
treatment (for both trade in services and investment).  For investment, this reservation also extends 
to "any differential treatment accorded pursu ant to a subsequent review or amendment of the 
relevant bilateral or multilateral international agreement" .28 
4.13.   The Parties' commitments on national and MFN treatment do not, however, apply to the 
existing non -conforming measures which they list  (positively o r negatively)  concerning the obligatio n 
of national and MFN treatment in Annex I II to the Agreement .29  
4.3.3   Commercial presence  
4.14.   The Agreement does not have specific provisions concerning commercial presence other than 
what is covered implicitly by commitments r elated to the supply of services through mode 3, covered 
by Chapter 8 (trade in services) .30 Some  non-conforming measures listed in Annex  III (either through 
positive or through negative lists)  have nationality and/or residence requirements for senior manag ers 
and/or board of directors  that may affect the ability of service providers to establish commercial 
presence .  
4.3.4   Performance requirements  
4.15.   The Agreement does not have specific provisions on performance requirements. However,  some 
non-conforming measures li sted in Annex  III (either through positive or through negative lists) 
contain specific requirements related to the performance of service providers that may affect the 
ability of service providers to benefit from a Party's specific commitment. Moreover, in  relation to the 
future work programme addressed in Article 9.9, an Article , to be added  in Chapter 9, should cover, 
inter alia , performance requirements . 
4.3.5    Senior Managers and Boards of Directors  
4.16.   The Agreement does not have specific provisions on senior ma nagers and boards of directors. 
Some  non-conforming measures  are nevertheless  listed in Annex  III (in particular in the case of 
Australia as a  negative lists  approach is used ) contain specific requirements applicable to senior 
managers and/or boards of dir ectors that may affect the ability of service providers to fully benefit 
from a Party's specific commitment. Moreover, the Parties agree that  the future work programme 
addressed in Article 9.9, an Article, to be added in Chapter 9, should cover, inter alia , senior 
managers and boards of directors . 
4.3.6   Movement of natural persons  
4.17.   Chapter 10 applies to measures affecting the movement of natural persons of a Party into the 
territory of the other Party under any of the categ ories referred to in Annex 10 -A. 
                                                
27 The Agreement c larifies that the MFN treatment does not encompass Investor -State Dispute Settlement 
procedure or mechanisms.  
28 See footnote 3.  
29 The Parties clarify that Australia has adopted a negative list approach for services and investment and 
that China has commitm ents, for services only, and in a positive list approach. China has not listed its investment 
commitment. Article 9.5 (non -conforming measures) says, for China, only that Articles 9.3 and 9.4 don't apply to 
"any existing non -conforming measures maintained within the territory …". The Parties also note that the Future 
Work Program (Article 9.9) includes negotiations on scheduling of investment commitments by China on a negative 
list basis.  
30 The Parties clarify that, under the Agreement, mode 3 is covered ex clusively in the Chapter 8 (trade in 
services). That means that mode 3 is carved out from Chapter 9 (investment), as confirmed in Article 9.2.2.  WT/REG36 9/1 
 
- 24 - 
 
  4.18.   While re quirements and procedures relating to  citizenship, nationality, immigration, residence 
or permanent employment policies, as well as to  immigration formalities remain within the sphere of 
competence of each Party  and out of the scope of Chapter 10 , the Agre ement establishes some 
principles in relation to expeditious application procedures (Article 10.3); grant of temporary entry 
(Article 10.4); and transparency in relation to movement of natural persons (Article 10.5) .  
4.19.   Australia's specific commitments in re lation to movement of natural persons, contained in 
Annex 10 -A, are undertaken in relation to Chines e business visitors; intra -corporate transferees, 
including certain types of executive or senior managers, specialists, or managers; independent 
executives;  contractual service suppliers; installers and servicers; and accompanying spouses and 
dependants. China's corresponding specific commitments are contained in its Schedule of specific 
commitments in Annex III and cover comparable categories of Australian n atural persons .31  
4.20.   Resolution of matters that might affect the operation of Chapter 10 shall be made through 
cooperation and consultations between the Parties. The dispute settlement procedures provided in 
Chapter 15 shall not apply to Chapter 10 unless the  matter involves a pattern of practice, and all 
administrative remedies regarding the particular matter have been exhausted (Article 10.7).  
4.21.   In relation to Chapter 10, but also to Chapter 8 (trade in services), the  Parties exchanged side 
letters on coopera tion to streamline relevant skills assessment processes for temporary skilled labour 
visas. Such cooperation includes reducing the number of occupations currently subject to m andatory 
skills assessment for Chinese applicants for an Australian Temporary Wor k (Skilled) visa 
(subclass  457). Australia also agrees to remove the requirement for mandatory skills assessment for 
ten occupations32 at the date of entry into force of the Agreement. The remaining occupations will be 
reviewed within two years of the date of entry into force of the Agreement, with the aim of further 
reducing the number of occupations, or eliminating the requirement within five years. The Parties also 
undertake to cooperate to encourage the streamlining of relevant licensing procedures and t o improve 
access to relevant skills assessments. The areas of cooperation mentioned in the side letters, shall be 
reviewed within two years of the date of entry into force of the Agreement. Avenues for further 
cooperation in the areas of skills recognition  and licensing shall also be discussed.  
4.22.   The Agreement establishes a Committee on movement of natural persons to  meet within 
two years of entry in operation of the Agreement to  review the implementation and operation of 
Chapter 10 and identify and recommend  measures to promote increased movement of natural 
persons between the Parties and to improve the commitments undertaken by the Parties.  
4.4  Liberalization commitments  
4.23.    The Agreement foresees two possible approaches to scheduling of specific commitments. 
Section A of Part II of Chapter 8 establishes the rules applicable when specific commitments are 
scheduled through a positive listing approach33, while Section B contains the disciplines and modalities 
applicable when electing a n egative listing approach. While  in the Agreement China lists its 
commitments using a GATS -like positive approach and Australia uses a negative listing approach, the 
Agreement establishes that, at a time to be mutually agreed by the Parties, the Parties shall initiate 
the next round of th e negotiation on trade in services in the form of a negative listing approach 
(Paragraph 3 of Article 8.24). Similarly , the Parties shall commence negotiations on a comprehensive 
investment chapter, and, in the case of China, the adoption of investment com mitments via a 
negative list, immediately after the review forese en in Article 9.9 is completed (Paragraph 3c of 
Article  9.9). 
4.24.   The sections below compare the Parties' liberalization commitments under the Agreement and 
their GATS commitments. Each Party's G ATS schedule is compared to Annex III to the Agreement. 
After recalling GATS MFN exemptions and identifying horizontal limitations in the GATS and in the 
                                                
31 The following categories of natural persons are covered in China's Schedule (horizontal commitments): 
busines s visitors; managers, executives and specialists; contractual service suppliers, limited to some specific 
sectors only; installer and maintainers; and accompanying spouses and dependents.  
32 The ten occupations mentioned in the side letters are: automotive electrician; cabinetmaker; carpenter; 
carpenter and joiner; diesel motor mechanic; electrician (general); electrician (special class); joiner; motor 
mechanic (general); and motorcycle mechanic.  
33 In case the positive listing approach is used (China), addi tional commitments may also be scheduled in 
Annex III, as described in Article 8.8.  WT/REG36 9/1 
 
- 25 - 
 
  Agreement, Tables 4.3 and 4.4 summarize specific commitments under the Agreement, by main 
sectors and sub-sectors and compare them with GATS commitments. Improvements over existing 
GATS commitments may take the form of  a reduction of the limitations to market access and/or 
national treatment, a relaxation of the form of establishment under mode 3, and/or a dditional 
commitments and increased coverage. However, horizontal limitations in the GATS Schedule of 
Specific Commitments and reservations covering all sectors are not included. Moreover, mode 4 
commitments and limitations are, to a large extent, excluded . Furthermore, in relation to specific 
commitments undertaken by Australia, as commitments reflected in negative lists are difficult to 
compare with GATS types of commitments, the following sections are to be read in conjunction with 
the Parties' schedules  of commitments under the Agreement.  
4.25.   The Parties' Schedules of specific commitments may be modified or commitments withdrawn at 
any time after three years have elapsed from the date on which that commitment entered in to force 
provided notification is made  and consultations conducted to reach agreement on the appropriate 
compensatory adjustment (Article 8.22 on modification of Schedules).  
4.4.1   Australia  
4.4.1.1   MFN and horizontal commitments  
4.26.   In the GATS, Australia took commitments in 103 out of 155 services sectors. It did not make 
commitments, inter alia , on certain specific business services; postal and courier services, as well as 
audiovisual services; some education services (primary and adult education services); sanitation and 
similar services; hospital and social services; entertainment services and libraries, archives, museums 
and other cultural services; and internal waterways, space and rail transport services. Under the 
Agreement, as a negative list approach is chosen, as a principle, all the sectors are covere d, though a 
number of non -conforming mea sures are listed in Annex  III to the Agreement.  The coverage of 
Australia's commitments under the Agreement is expanded to cover sectors and subsectors that were 
unbound under the GATS. This is in particular the case  for some communication services (postal and 
courier services); adult education services ; hospital and social services ; some recreational services; 
and some transport services (in particular internal waterways transport, space transport and rail 
transport services). The degree of coverage expansion is however impacted by the introduction of two 
relatively broad horizontal carve -outs to exclude cultural industries (covering for instance audiovisual 
services as well as museum, archives, and cultural services)  and to exclude public and social services 
(covering for instance some education services, aspects of health and social services; as well as some 
public transport services).  
4.27.   Under the GATS, Australia scheduled MFN exemptions for audiovisual services. The r eserved 
areas cover co -production and/or actions taken to respond to any unreasonable measures imposed on 
Australian services or service suppliers by another WTO Member. Under the Agreement, MFN 
treatment commitments34 for investment are referred to in Arti cle 9.4, and, for trade in services , are 
governed by Article 8.12, while MFN -non-conforming measures are listed in Annex I II. Through a 
broad cultural industries carve -out, and as under the GATS, Australia reserves MFN non -conforming 
measures that might be  taken in the audiovisual sector. It also registers other MFN exemptions for 
existing measures (for example in connection to the activity of migration agent, or with regard to the 
provision of postal services, in principle exclusively reserved to Australia  Post), and to cover measures 
that may be adopted in the future in relation to the necessity to protect Australia's essential security 
interests; in connection with investment screening for land ownership  or activities of the agribusiness;  
with respect to  the enforcement of laws maintained for public purpose; with respect to public 
education as well as the supply of education services though commercial presence; and with respect 
to human health  as part of the broad public services carve -out. Under the Agree ment, Australia also 
reserves the right to adopt or maintain any measures that accord more favourable treatment to the 
service suppliers or investors of third -parties under any bilateral or multilateral international 
agreement in force or signed prior to t he date of entry into force of the Agreement. It moreover 
reserves the right to derogate from the MFN principle in relation to advantages that might be granted 
under any future bilateral or multilateral international agreement involving aviation, fisheries , or 
maritime matters, including salvage . 
                                                
34 Not encompassing ISDS procedures.  WT/REG36 9/1 
 
- 26 - 
 
  4.28.   Under the GATS, Australia makes horizontal reservations for establishment (mode 3) and in 
connection with the Foreign Acquisitions and Takeovers Act of 1975. Some residency requirements are 
also listed and preferen tial measures in favour of indigenous persons or organisations are unbound.35 
Under the Agreement, Australia replicates most of these reservations , though for reservations with 
respect to mode  4, Australia's specific commitments are contained in Annex 10 -A (and not in 
Annex  III as it is the case for China) . Moreover, Australia improves the applicable conditions for 
movement of natural persons, as compared to its commitments under the GATS.  While the coverage 
of commitments is expended through the negative li sting approach, Australia  also introduces 
horizontal reservations to cover preferences to indigenous persons36 or organization; the acquisition of 
urban land; and the devolution to the private sector of services provided in the exercise of 
governmental auth ority at the time the Agreement entered into force. Australia also reserves the right 
to adopt or maintain any measures at the regional level of government that is not inconsistent with its 
Revised Services Offer of 31 May 2005, made in the context of the WTO Doha Development Agenda 
negotiations .37  
4.4.1.2   Sector specific commitments  
4.29.   The following section identifies some of the main differences, by sector, between Australia's 
GATS schedule and its sector -specific commitments under the Agreement. It should also be r ead in 
conjunction with Annex III of the Agreement.  
Table 4.1 Australia: comparison between the GATS and Agreement specific commitments  
Sectors / Sub -sectors  GATS  FTA 
Compared 
to the 
GATS  Commitments on 
existing  
Measures  Commitments on 
future  
Measures  
1. Business services      
A. Professional  Services  Partial  Similar  Partial  Full 
B. Computer  and Related  Services  Partial  Improved  Full Full 
C. Research  and Development  Services  Partial  Improved  Partial  Full 
D. Real  Estate  Services  Partial  Similar  Partial  Full 
E. Rental/Leasing  Services  without  Operators  Partial  Improved  Full Full 
F. Other  Business  Services  Partial  Similar  Partial  Partial  
2. Communication services      
A. Postal  services  --- New Partial Full 
B. Courier  services  --- New Full Full 
C. Telecommunication  services  Partial  Similar  Partial  Full 
D. Audiovisual  services  --- New Full Partial  
E. Other  --- New Full Full 
3. Construction and related engineering services      
A. General  constr uction  work for buildings  Full Similar  Full Full 
B. General  construction  work for civil Engineering  Full Similar  Full Full 
C. Installation  and assembly  work  Full Similar  Full Full 
D. Building  completion  and finishing  work  Full Similar  Full Full 
E. Other --- New Full Full 
4. Distribution services      
A. Commission  agents'  services  Partial  Improved  Partial  Full 
B. Wholesale  trade services  Partial  Improved  Partial  Partial  
C. Retailing  services  Partial  Improved  Partial  Partial  
D. Franchising  Full Similar Full Full 
E. Other  --- New Full Full 
5. Education services      
A. Primary education services  --- New Full Partial  
B. Secondary education services  Partial  Similar  Full Partial  
C. Higher education services  Partial  Similar  Full Partial  
D. Adult e ducation  --- New Full Partial  
E. Other education services  Partial  Similar  Full Partial  
6. Environmental services      
A. Sewage services  Full Similar  Full Full 
B. Refuse disposal services  Full Similar  Full Full 
C. Sanitation and similar services  Full Similar  Full Full 
D. Other  --- New Full Full 
7. Financial services      
A. All insurance  and insurance -related  services  Partial  Similar  Full Partial  
B. Banking  and other financial  services  Partial  Similar  Partial  Partial  
                                                
35 Mode 4 commitments and reservations are handled in a separate section of this factual presentation.  
36 The term "indigenous" covers Ab original and Torres Strait Islander peoples.  
37 See WTO document TN/S/O/AUS/Rev.1.  WT/REG36 9/1 
 
- 27 - 
 
  Sectors / Sub -sectors  GATS  FTA 
Compared 
to the 
GATS  Commitments on 
existing  
Measures  Commitments on 
future  
Measures  
8. Health related and social services      
A. Hospital services  --- New Partial  Partial  
B. Other Human Health Services  Partial  Similar  Partial  Partial  
C. Social Services  --- New Full Partial  
D. Other  --- New Full Partial  
9. Tourism and travel related services      
A. Hotels  and restaurants (including catering)  Full Similar  Full Full 
B. Travel  agencies  and tour operators  services  Partial  Similar  Partial  Full 
C. Tourist  guides  services  Full Similar  Full Full 
D. Other  --- New Full Full 
10. Recreational and cultural and sporting s ervices      
A. Entertainment  services  --- New Full Full 
B. News agency services  Full Similar  Full Full 
C. Libraries, archives, museums and other cultural services  --- New Full Partial  
D. Sporting and other recreational services  Partial  Improved  Partia l Full 
E. Other  --- New Full Partial  
11. Transport services      
A. Maritime Transport Services  Partial  Similar  Partial  Partial  
B. Internal Waterways Transport  --- New Full Partial  
C. Air  Transport  Services  Partial  Improved  Partial  Partial  
D. Space  Transport  --- New Full Partial  
E. Rail  Transport  Services  --- New Full Full 
F. Road  Transport  Services  Partial  Improved  Partial  Partial  
G. Pipeline  Transport  Full Similar  Full Full 
H. Services  auxiliary  to all modes  of transport  Partial  Improved  Full Full 
I. Other  Transport  Services  --- New Full Full 
General Note:  MFN and Horizontal limitations, as well as Mode 4 commitments/limitations not considered.  
Partial:  Specific commitments subject to some limitation(s) under market access or national trea tment, under 
any of the three modes.  
Full: Specific commitments not subject to limitation(s) under market access or national treatment, under any 
of the three modes.  
---: No specific commitment.  
New: New commitments under the Agreement (full or partial, wi th or without limitations) which can, in most 
but not all cases, be seen as "improved".  In some cases, a broad carve -out may diminish, or even 
nullify, the possible improvement represented by a "new" commitment.  
Improved: Overall improved commitments made under the Agreement compared to those under the GATS.  
Similar:  Similar commitments (Agreement vs GATS); though possibly, in individual cases, with limited 
improvements and/or limited additional reservations.  
Source:  Draft Consolidated GATS Schedule of Spec ific Commitments (S/DCS/W/AUS), prepared by the 
Secretariat (in 2003) and Australia's Schedules annexed to the Agreement.  
 
4.4.1.2.1   Business services  
4.30.   No reservation is made for new measures that Australia may take in the future , except if 
preferential treatment in volving fisheries are granted through future bilateral agreements with third -
parties . However, a number of existing measures are listed as non -conforming measures. Australia 
improves the coverage of its commitments by virtue of using a negative list, as co mpared to its 
commitments under GATS. This is in particular the case for computer and related services and rental 
and leasing services without operators, for which it has full commitments without limitations under 
the Agreement. Reservations made for the o ther s ub-sectors of business services (some professional 
services; research and development services with respect to bio -discovery; some real estate services; 
and different types of other business services, including in connection with fishing, pearling, a nd 
mining, mirror the reservations contained in Australia's commitments under the GATS.   
4.31.   The Parties exchanged side letters on their shared understanding to strengthen cooperation in 
the field of commercial legal services. They also exchanged side letters in relation to services by 
Traditional Chinese Medicine (TCM) practitioners.  WT/REG36 9/1 
 
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  4.4.1.2.2   Communication services  
4.32.   Full commitments are made in the Agreement for postal and courier services, which are 
unbound under the GATS. However, Australia clarifies that certain acti vities undertaken by Australia 
Post, a wholly -owned government entity, are performed under exclusivity rights conferred with 
respect to issuing postage stamps and carrying of letters within Australia. With respect to 
telecommunication services, r estriction s under the GATS are, in essence, mirrored by the Agreement, 
while audiovisual services, unbound under the GATS, are subject to a number of limitations and 
conditional specific commitments  forming part of a broad carve -out covering cultural industries .  
4.4.1.2.3   Construction and related engineering services  
4.33.   As under the GATS, full  commitments without limitation  are made.  
4.4.1.2.4   Distribution services  
4.34.   As a result of using a negative list approach, the  coverage  under the Agreement is expended, 
as compared to under the GATS. Existing reservations are nevertheless listed with respect to 
(sub-federal level) some licensed agents; some marketing arrangements for rice and potatoes; and in 
relation to the distribution of firearms, tobacco, and wine.  Reservations for possible future 
non-conforming measures in relation to the distribution of the above -mentioned goods are also 
registered.  As under the GATS, franchising is fully covered without any limitation or restriction.   
4.4.1.2.5   Educational services  
4.35.   Australia reservation of its right to ado pt or maintain any measure with respect to the supply of 
education services through commercial presence reflects the different approach to the scheduling of 
its education commitments adopted under the Agreement as compared to the one used under GATS.  
The b road public services carve -out cover public education and public training. Moreover, a specific 
education services entry is cont ained in Section B of Annex III, which states that Australia may 
maintain existing, or adopt new or more restrictive measures th at do not conform with its national 
principl e and MFN principle commitments .  
4.36.   The Parties exchanged side letters on their shared understanding to strengthen cooperation in 
the field of education  services.  
4.4.1.2.6   Environmental services  
4.37.   As under the GATS, full com mitments are made without  limitation .  
4.4.1.2.7   Financial services  
4.38.   Australia's commitments under the agreement are l argely based upon its GATS commitments . 
While non -conforming measures with respect to financial services are listed in Sections A and B of 
Annex III Australia's commitments (for existing and possible future measures) are subject to the 
limitations and conditions set forth in Annex 8 -B. Prudential regulations apply in connection with 
Australia's commitments and Australia rese rves the right to require th e non-discriminatory licensing or 
registration of cross -border financial service suppliers of China and of financial instruments in 
accordance with domestic regulation provisions applicable to financial services.  Under the Agreement, 
Australia reserves the  right to adopt or maintain any measure regarding solicitation in its territory.  
Specific limitations are set under the Agreement in relation to the provision of certain services through 
mode 1. Moreover, existing non -conforming measures with respect to so me banking services are 
registered under the Agreement, in particular in relation to authorisation to undertake banking 
business as a deposit -taking institution, and related -conditions; the coverage of liabilities of the 
previously Commonwealth Government -owned by transitional guarantee arrangements; some local 
requirements applicable (at provincial level) in relation to the provision of credit, debt collection or 
operation as a finance broker, as well as in the context of operation by second -hand dealer or  
pawnbroker.  
4.39.   The Parties exchanged side letters on their shared understanding to strengthen cooperation in 
the field of financial services.  WT/REG36 9/1 
 
- 29 - 
 
  4.4.1.2.8   Health related and social services  
4.40.   While all health related sub -sectors are covered by virtue of the negative list approach, the 
public service carve -out cover any  measure with respect to health and child care, thus essentially 
offering  a similar level of coverage as under the GATS.  
4.4.1.2.9   Tourism and travel related services  
4.41.   Australia's commitments under the Agreement, offer ing full and almost unrestricted coverage 
(with the exception of travel agents operating in one Province) largely mirror  its GATS commitments.  
4.4.1.2.10   Recreational, cultural and sporting services  
4.42.   Australia builds on its GATS commitments, improves its coverage in p articular in relation to 
entertainment services, sporting and other recreational services , though these activities are also 
subject to the carve -out for communication services and recreational, cultural and sporting services . It 
registers a  limitation on g ambling and betting related services. The broad carve -out applicable to 
cultural industries also covers libraries, archives, museums and other cultural services.  
4.4.1.2.11   Transport services  
4.43.   While replicating some of the limitations contained under its GATS Schedule  and expanding the 
coverage of specific commitments through the negative list approach, Australia improves the scope 
and depth of its commitments as compared to under the GATS.  This in particular done for space 
transport. While specific existing non -confor ming measures are registered with respect to some 
maritime transport services (cargo -shipping for instance), the provision of some airline services, and 
some activities connected to road transport (taxi in particular)  are subject to a reservation. M aritime  
cabotage is completely excluded and a general reservation is made for vessel registration, investment 
in activities of federal airports, matters covered by existing bilateral agreements with third -parties 
and/or future agreements that may be concluded on maritime m atters, including salvage. Moreover, 
the broad public services carve -out also covers public transport . 
4.4.2   China  
4.4.2.1   MFN and horizontal commitments  
4.44.   In its GATS schedule, China  took commitments in 93  out of 155 services sectors. While partial 
commitments are made for many sectors, real estate as well as rental and leasing services, postal and 
courier services, the entire education sector, some environmental services, the entire health related 
and social services sector and recreational and cultural and spo rting services, and some transport 
services (internal waterways transport, space, rail and pipeline transport services) are unbound under 
the GATS. Under the Agreement, the scope of China's commitments  is improved  essentially by 
expanding the commitments' coverage to some professional and other business services, some health 
related services (hospital services, and other human health services), and to some transport services 
(particularly air transport services and some aspects of road transport services) . 
4.45.   China 's limited  MFN exemption s under the GATS are circumscribed to some transport services 
(maritime, international transport, and freight and passengers) and make reference to bilateral 
agreements that China may conclude with respect to certain forms of n atural persons that may 
engage in business in China in the specified sectors. Agreements of cargo sharing are also reserved .  
4.46.   Under the Agreement, as under the GATS, China  has horizontal reservations on the purchase of 
land, in relation to establishment. A nother horizontal reservation under the GATS is on the movement 
of natural persons (mode 4) and is addressed in another section of this factual presentation. The 
horizontal limitation on foreign portfolio investments in certain Chinese  stocks listed under the GATS 
is reflected under some restrictions scheduled by China  under the Agreement (under Annex  III). Like 
Australia, China  reserves the right to adopt or maintain any measures that accord more favourable 
treatment to the service suppliers or investors o f third -parties under any bilateral or multilateral 
international agreement in force or signed prior to the date of entry into force of the Agreement. It 
moreover reserves the rights to derogate from the MFN principle in relation to advantages that might WT/REG36 9/1 
 
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  be granted under any future bilateral or multilateral international agreement involving aviation, 
fisheries, or maritime matters, including salvage.  
4.4.2.2   Sector specific commitments  
4.47.   The following section identifies some of the main differences, by sector, betwe en China 's GATS 
schedule and its sector -specific commitments under the Agreement , using a positive listing approach . 
It should also be read in conjunction with Annex III  of the Agreement.  
Table 4.2 China : com parison between GATS and Agreement specific commitments   
Sectors / Sub -sectors  GATS  FTA 
Compared to the GATS  
 Specific commitments 
under the Agreement  
 
1. Business services     
A. Professional  Services  Partial  Improved  Partial  
B. Computer  and Related  Services  Partial  Similar  Partial  
C. Research  and Development  Services  --- New Partial  
D. Real  Estate  Services  Partial  Similar  Partial  
E. Rental/Leasing  Services  without  Operators  --- Similar  --- 
F. Other  Business  Services  Partial  improved  Partial  
2. Communication services     
A. Postal  services  --- Similar  --- 
B. Courier  services  Partial  Similar  Partial  
C. Telecommunication  services  Partial  Improved  Partial  
D. Audiovisual  services  Partial  Similar  Partial  
E. Other  --- Similar  --- 
3. Construct ion and related engineering services     
A. General  construction  work for buildings  Partial  Similar  Partial  
B. General  construction  work for civil Engineering  Partial  Similar  Partial  
C. Installation  and assembly  work  Partial  Similar  Partial  
D. Buildin g completion  and finishing  work  Partial  Similar  Partial  
E. Other  Partial  Improved  Partial  
4. Distribution services     
A. Commission  agents'  services  Partial  Similar  Partial  
B. Wholesale  trade services  Partial  Similar  Partial  
C. Retailing  services  Partial Similar  Partial  
D. Franchising  Full Similar  Full 
E. Other  Full Improved  Full 
5. Education services     
A. Primary education services  Partial  Similar  Partial  
B. Secondary education services  Partial  Similar  Partial  
C. Higher education services  Partial Similar  Partial  
D. Adult education  Partial  Similar  Partial  
E. Other education services  Partial  Similar  Partial  
6. Environmental services     
A. Sewage services  Partial  Improved  Partial  
B. Refuse disposal services  Partial  Improved  Partial  
C. San itation and similar services  Partial  Improved  Partial  
D. Other  Partial  Improved  Partial  
7. Financial services     
A. All insurance  and insurance -related  services  Partial  Improved  Partial  
B. Banking  and other financial  services  Partial  Improved  Partial  
8. Health related and social services     
A. Hospital services  --- New Partial  
B. Other Human Health Services  --- New Partial  
C. Social Services  --- Similar  --- 
D. Other  --- Similar  --- 
9. Tourism and travel related services     
A. Hotels  and restau rants (including catering)  Partial  Similar  Partial  
B. Travel  agencies  and tour operators  services  Partial  Similar  Partial  
C. Tourist  guides  services  --- Similar  --- 
D. Other  --- Similar  --- 
10. Recreational and cultural and sporting services     
A. Ent ertainment  services  --- Similar  --- 
B. News agency services  --- Similar  --- 
C. Libraries, archives, museums and other cultural services  --- Similar  --- 
D. Sporting and other recreational services  --- Improved  Partial  
E. Other  --- Similar  --- WT/REG36 9/1 
 
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  Sectors / Sub -sectors  GATS  FTA 
Compared to the GATS  
 Specific commitments 
under the Agreement  
 
11. Tran sport services     
A. Maritime Transport Services  Partial  Improved  Partial  
B. Internal Waterways Transport  Partial  Similar  Partial  
C. Air  Transport  Services  Partial  Improved  Partial  
D. Space  Transport  --- Similar  --- 
E. Rail  Transport  Services  Partia l Similar  Partial  
F. Road  Transport  Services  Partial  Improved  Partial  
G. Pipeline  Transport  --- Similar  --- 
H. Services  auxiliary  to all modes  of transport  Partial  Similar  Partial  
I. Other  Transport  Services  --- Similar  --- 
General Note:  MFN and Ho rizontal limitations, as well as Mode 4 commitments/limitations not considered.  
Partial:  Specific commitments subject to some limitation(s) under market access or national treatment, under 
any of the three modes.  
Full: Specific commitments not subject to limitation(s) under market access or national treatment, under any 
of the three modes.  
---: No specific commitment.  
New: New commitments under the Agreement (full or partial, with or without limitations) which can, in most 
but not all cases, be seen as "im proved".  
Improved: Overall improved commitments made under the Agreement compared to those under the GATS.  
Similar:  Similar commitments (Agreement vs GATS); though possibly, in individual cases, with limited 
improvements and/or limited additional reservati ons. 
Source:  Draft Consolidated GATS Schedule of Specific Commitments (S/DCS/W/ CHN and Corr.1 ), prepared by 
the Secretariat (in 2003  and 2005 ) and China 's Schedules annexed to the Agreement.  
 
4.4.2.2.1   Business services  
4.48.   While essentially mirroring its GATS commitm ents, China registers additional conditional 
commitments in relation to the activity of Australian law firms registered in the (Shanghai) Pilot Free 
Trade Zone. Partial commitments are also made in relation to some research and development 
services, unboun d under the GATS. New Partial commitments are also made in connection with some 
other business services, including project management services other than for construction; some 
services incidental to mining; some services incidental to manufacturing; build ing-cleaning services; 
and some printing services.  
4.49.   The Parties exchanged side letters on their shared understanding to strengthen cooperation in 
the field of commercial legal services. They also exchanged side letters in relation to services by 
Traditional  Chinese Medicine (TCM) practitioners.  
4.4.2.2.2   Educational services  
4.50.   Under the Agreement, China mirrors the commitments made under the GATS with unchanged 
conditions and limitations.  It also agrees to list within one year, through its examination and 
evaluation pro cedures38, the 77 Australian CRICOS39-registered higher education institutions that are 
set up in accordance with Australian laws and eligible to confer diplomas or degrees recognised by 
Australian education authorities.  
4.51.   The Parties  exchanged side letters o n their shared understanding to strengthen cooperation in 
the field of education services.  
                                                
38 On the website http://www.jsj.edu.ch . 
39 CRICOS refers to the Commonwealth Register of Institutions and Courses for Overseas Students.  WT/REG36 9/1 
 
- 32 - 
 
  4.4.2.2.3   Environmental  services  
4.52.   The whole sector is unbound under the GATS. Under the Agreement, China makes 
commitments, limited to commercial presence with some conditions , for hospital services and social 
services for the aged.  
4.4.2.2.4   Financial services  
4.53.   While China's commitments under the Agreement mirror most of those in the GATS, some 
additional commitments are made with respect to Australian providers of banking and other fina ncial 
services. In particular, for financial leasing services, financial leasing corporations of Australia are 
permitted to provide financial leasing service at the same time as domestic corporations. Relaxed 
conditions are also applicable for financial in stitutions of Australia who meet certain conditions to 
establish a subsidiary of a bank of Australia in China.  
4.54.   In relation to insurance services, Australian insurance providers access to China's third –party 
liability motor vehicle insurance market, is gra nted without form of establishment or equity 
restrictions.  
4.55.   The Parties exchanged side letters on their shared understanding to strengthen cooperation in 
the field of financial services.  
4.4.2.2.5   Health related and social services  
4.56.   China has removed its requirement for joint ventures applicable under the GATS to the sector . 
4.4.2.2.6   Recreational and cultural and sporting services  
4.57.   The whole sector is unbound under the GATS. Under the Agreement, China makes full 
commitment  for some sporting and other recreational services . 
4.4.2.2.7   Transport services  
4.58.   China's GATS commitments are reproduced under the Agreement with additional commitments 
made for sectors not previously covered such as some air transport services (selling and marketing of 
air transport services; airport operation services;  ground handling services; and speciality air 
services); and some road transport services (passenger transportation) . 
4.4.2.2.8   Communication services; construction and related engineering services; 
distribution services; and tourism a nd travel related services.  
4.59.   For the above -mentioned sectors, under the Agreement, China mirrors the commitments made 
under the GATS with unchanged conditions and limitations.  It can nevertheless be mentioned that the 
somewhat horizontal market access commitments applicable to the Shangh ai Free Trade Zone (SFTZ) 
may be seen as a market access improvement, as compared to China's GATS commitments. For 
example, Australian companies established in the SFTZ that are undertaking joint construction 
projects with Chinese counterparts in Shanghai are granted improved market access.  
4.5  Regulatory provisions  
4.5.1   Domestic regulation  
4.60.   Article 8.13 replicates the disciplines relating to qualification requirements, and procedures, 
technical standards and licensing requirements contained in Articles VI. 1 throug h VI.6  of the GATS. A 
Party shall also permit service suppliers of the other Party to use the enterprise names under which 
they trade in the territory of the other Party.  WT/REG36 9/1 
 
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  4.5.2   Recognition  
4.61.   Under Article 8.14, the Agreement mirrors the provisions in paragraphs 1 through 3 of 
Article  VII of the GATS. It also states that the MFN provisions (Articles 8.7 and 8.12) shall not be 
construed to require a Party to accord recognition to the education or experience obtained, 
requirements met, or licences or certifications gr anted in the territory of the other Party, where 
recognition is granted autonomously in favour of or by agreement with a third -party . 
4.62.   The Parties agree to encourage, where possible, the relevant bodies in their respective 
territories responsible for issuan ce and recognition of professional and vocational qualifications to 
strengthen cooperation and to explore possibilities for mutual recognition of respective professional 
and vocational qualifications (Article 8.15).  
4.5.3   Subsidies  
4.63.   Subsidies or grants provided b y a Party, including government -supported loans, guarantees, 
and insurance are specifically excluded from the coverage of Chapter 8 (trade in services)  and of 
Chapter 9 (investment).  
4.5.4   Safeguards  
4.5.4.1   Measures to safeguard the balance -of-payments  
4.64.   In the case of trade in services, r estrictive import measures to safeguard the balance -of-
payment, as well as those taken in serious external financial difficulties, may be taken in respect of 
which a Party has undertaken specific commitments, including on payments or tr ansfers for 
transactions related to such commitments. In the case of investments, a Party may adopt or maintain 
restrictions on payments or transfers related to covered  investments (Article 16. 6, letters b and c) . 
4.5.5   Other  
4.5.5.1   Monopolies and exclusive service sup pliers  
4.65.   In Article 8.23, on monopolies  and exclusive service suppliers, the Agreement essentially 
replicates Article VIII of the GATS.  
4.5.5.2   Bilateral taxation arrangement  
4.66.   The Parties shall review their bilateral taxation arrangement, having regard to mutual econ omic 
objectives and international taxation standards (Article 8.25, paragraph 1).  
4.5.5.3   Investment  
4.67.   Investment is spec ifically addressed in Chapter 9 . It applies to measures by a Party relating to 
investors of the other Party and  covered investment . Chapter 9 doe s not apply to government 
procurement and subsidies. Moreover, it not does bind either Party in relation to any act or fact that 
took place or any situation that ceased to exist before the date of entry into force of the Agreement.  
4.68.   Chapter 9 (on investmen t) does not apply to measures adopted or maintained by a Party to the 
extent that they are covered by Chapter 8 (trade in services) or Chapter 10 (movement of natural 
persons).  
4.69.   In addition to the above -mentioned p rovisions on national treatment ; MFN treat ment; denial of 
benefits; and to disciplines on general exceptions (Article 9.8), Chapter 9 also contains a future work 
program (Article 9.9). The Parties agree to conduct a review of the investment legal framework 
between them no later than three years af ter the date of entry into force of the Agreement. The 
review shall include consideration of Chapter 9 but also of the Agreement between Australia and China 
on the Reciprocal Encouragement and Protection of Investments . Unless the Parties otherwise agree, 
they shall commence negotiations on a comprehensive investment chapter, reflecting outcomes of the 
review immediately after such review is completed. Article 9.9 identifies some elements that the WT/REG36 9/1 
 
- 34 - 
 
  negotiations shall include.40 Section B of Chapter 9 establis hes an investor -State dispute settlement  
(ISDS)  mechanism which is summarized below under the dispute settlement section .  
4.6  Sector specific provisions on trade in services  
4.70.   Six sets of side letters have been exchanged between the Parties in parallel to and a s part of 
the adoption of the Agreement. They are mentioned below in the sector specific sections and cover 
the following areas: skills assessment and licensing; financial services; education; legal services; 
transparency rules applicable to investor -State  dispute settlement; and traditional Chinese medicine.  
4.6.1    Legal services  
4.71.   The Parties exchanged side letters on their shared understanding to strengthen cooperation in 
the field of commercial legal services . The Parties agree to meet within 12 months of the d ate of entry 
into force of the Agreement, with a view to developing measures to enhance and support 
strengthened cooperation between lawyers registered in Australia and in China; increased mobility for 
Australian and Chinese lawyers; and closer cooperation  between commercial law firms from both 
Parties in the effective provision of transnational legal services. Such cooperation shall take place 
through the "peak legal professional bodies"41 in each country.   
4.6.2   Telecommunication  services  
4.72.   Article 8.19 contains a dditional disciplines applicable to telecommunication services. In 
particular, it incorporates the Annex on Telecommunications of the GATS and the Reference Paper on 
Telecommunications that form an integral part of the Agreement.  
4.73.   Each Party shall also ens ure that licensing requirements for suppliers of telecommunications 
networks or services of the other Party are applied in the least trade restrictive manner and are not 
more burdensome than necessary. Consultations shall be facilitated with suppliers of p ublic 
telecommunications networks or services operating in the development of telecommunications policy, 
regulations and standards. Advance notice shall also be provided, as well as an opportunity to 
comment,  to suppliers of public telecommunications netwo rks or services  in connection with the 
preparation of regulatory decisions of general application that a Party's telecommunications regulatory 
body proposes. Encouragements  are provided for reducing the international m obile roaming rates.  
4.6.3   Financial  service s 
4.74.   Annex 8 -B provides for some disciplines additional to Chapter 8 in relation to financial services , 
provided through any of the four modes of supply . It essentially builds upon the GATS' Annex on 
financial services.  It confirms the Parties' rights to adop t or maintain reasonable measures for 
prudential reasons.  
4.75.   The Agreement establishes a Committee on financial services (Article 7 of Annex 8 -B) to, 
inter alia, supervise the implementation of Annex 8 -B and its further elaboration and consider issues 
regard ing financial services referred to it.  
4.76.   The Parties exchanged side letters on their shared understanding to strengthen cooperation in 
the field of financial services. Such cooperation may include discussions about the development of 
prudential frameworks, as they apply to both branches and locally -incorporated subsidiaries; the 
expeditious processing of all applications made for the establishment of subsidiaries, branches and 
sub-branches; efforts to strengthen cooperation and information sharing on payment s system 
oversight; the confirmation by Australia that Chinese institutions are currently eligible to provide 
payment services (including clearing payments) in Australia on a national treatment basis ; etc.  
                                                
40 It is anticipated that additional Articles, to be included in Chapter 9, cover, inter alia , minimum standard 
of treatment; expropriation; transfers; performance requirements; senior management and board of directors; 
investment -specific State to State d ispute settlement; and the application of investment protections and ISDS to 
services supplier through commercial presence. In the context of these future negotiations, investment 
commitments by China shall be scheduled on a negative list basis.  
41 The "Pea k legal professional bodies" are, for Australia, the Law Council of Australia, and, for China, the All 
China Lawyers Association.  WT/REG36 9/1 
 
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  4.6.4   Education  services  
4.77.   The Parties exchanged side let ters on their shared understanding to strengthen cooperation in 
the field of education services. Noting China's commitment in its Schedule of Specific Commitments in 
Annex III to list within one year of entry into force the 77 Australian CRICOS42 registered  higher 
education institutions, Australia agrees to provide details of regulatory decisions made by the 
Australia Tertiary Education Quality and Standards Agency (TEQSA); to make available to China the 
related public report; and to provide to China the cou rses that listed institutions are accredited to 
deliver, and the dates by which the institutions will have to apply for TEQSA and CRICOS registration 
or course re -accreditation. Australia and China also agree to make joint efforts to ensure the smooth 
implementation of the Agreement and to continue to discuss listing on the website 
http://www.jsj.edu.ch  of additional CRICOS -registered institutions. The Parties will maintain programs 
facilitating teacher and student exch anges and ensure the legal rights and interests of students from 
the other country in accordance with their respective laws and regulations. The Parties competent 
authorities will discuss options for marketing and recruitment opportunities for Australian e ducation 
suppliers in China.   
4.6.5   Traditional  Chinese medicine services (TCM)  
4.78.   The Parties agree to cooperate on matters relating to trade in TCM services. Examples of such 
cooperation are mentioned in Article 8.25 (paragraph 3).  Moreover, in connection with di scussions in 
relation to Chapter 8 (trade in services), but also Chapter 6 (technical barriers to trade), they 
exchanged side letters on their shared understanding in the field of TCM, as well as trade in TCM and 
complementary medicines. In particular, the y agree to cooperate to exchange information and discuss 
policies, regulations and actions related to TCM services in order to find opportunities for further 
cooperation; to encourage and support engagement between relevant professional bodies and 
registra tion authorities for TCM practitioners in both countries; and to encourage and support 
cooperation on TCM research and development.  
5  GENERAL PROVISIONS O F THE AGREEMENT  
5.1  Transparency  
5.1.  Chapter 13 contains general transparency disciplines. Articles  13.2 through  13.5 list 
requirements on publication; notification and provision of information; administrative proceedings; 
and review and appeal.  
5.2.  The rules applicable to disclosure and confidentiality of information are contained in Article 16.1 
and replicate some of the corresponding rules under the WTO Agreement.  
5.3.  Further to Chapter 13, the Agreement also establishes specific transparency requirements in 
Articles 2.7 and 2.12  (non-tariff measures); 4.7 (customs administration and trade facilitation);  
5.5 (SPS measures ) 6.8 (TBT measures ); 7.6 (trade remedies); 7.10 (subsidies); 8.18 (trade in 
services); 11.6 (intellectual property rights); 5 of Annex 8 -B (financial services); 9.17 (transparency 
of arbitral proceedings in relation to the investor -State dispute settlemen t); 10.5 (movement of 
natural persons); and 12.4 (electronic commerce) . 
5.4.  Moreover, the Parties shall establish a number of enquiry points (on customs matters ) and 
contact points (on trade in services; and dispute settlement ). Moreover, for the purpose of fa cilitating 
communication between the Parties on any matter covered by the Agreement, each Party has 
designated a specific Contact Point (Article 14.3).  
5.5.  Unless otherwise provided for in Article 16.4, nothing in the Agreement shall apply to taxation 
measures . The Agreement shall only grant rights or impose obligations with respect to taxation 
measures where corresponding rights or obligations are also granted or imposed under the WTO 
Agreement. Moreover, the MFN principle does not apply to advantages accorded  pursuant to a tax 
convention. Furthermore, non -conforming provisions of any taxation measure maintained on the date 
of entry into force of the Agreement, continued or renewed, or an amendment to it that does not 
                                                
42 Commonwealth Register of Institutions and Courses for Overseas Students.  WT/REG36 9/1 
 
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  decrease the conformity with the Agreement are not covered either to the Agreement. Nothing in the 
Agreement shall affect the rights and obligations of either Party under any tax convention.  
5.2  Current payments and capital movements  
5.6.  Articles 8.16 foresee that each Party shall not apply restrictions o n international transfers and 
payments for current transactions relating to its specific commitments, except in presence of BOP 
measures. Rights and obligations of the Parties as members of the IMF are also reserved.  
5.3  Exceptions  
5.7.  Exceptions are contained in Articles 16.2 thr ough 16.4 . In addition, Article 9.8 contains 
exceptions applicable to investment . 
5.3.1   General exceptions  
5.8.  With respect to trade in goods43, Article XX of GATT 1994, including its interpretive notes, is 
incorporated into and made part of the Agre ement, mutatis mutandis . With respect to trade in 
services44, Article XIV of GATS, including its footnotes, is incorporated into and made part of the 
Agreement, mutatis mutandis . In connection with disciplines on investment, Article 9.8  (letters a and 
b) replicates the wording of Article XIV (b) and XIV(c)  of GATS and makes it applicable to measures 
covered by Chapter 9.  
5.3.2   Security exceptions  
5.9.  Articles XXI of GATT 1994 and XIV bis of GATS are incorporated into and made part of the 
Agreement, mutatis mutandis .  
5.4  Accession and Withdrawal  
5.10.   The Agreement does not contain any accession provisions. Termination is, however, governed 
by Article 17.4. It foresees that the Agreement shall remain in force unless either Party notifies the 
other Party in writing to terminate th e Agreement. Such termination shall take effect 180 days 
following the date of receipt of the notification . 
5.5  Institutional framework  
5.11.   A (FTA) Joint Commission is established, inter alia , to consider matters relating to  the 
implementation of the Agreement (Ar ticle 14.1).  
5.12.   Each Party shall designate a contact point or points to facilitate communications between the 
Parties on matters covered by the Agreement . A number of addition contact points are also 
established by the Agreement on specific matters.  
5.13.   The inst itutional framework established by the Agreement  is summarized by Chart 5.1 below.  
                                                
43 For the purposes of Chapters 2 (trade in goods); 3 (rules of origin and implementation procedures); 
4 (customs procedures and trade facilitation); 5 (SPS measures); 6 (TBT measures); and 12 (electronic   
commerce).  
44 For the purposes of Chapters 8 (trade in services); 10 (movement of natural persons); and  12 (electronic 
commerce).  WT/REG36 9/1 
 
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  Chart 5. 1 Institutional Framework  
 
 
5.6  Dispute settlement  
5.14.   Chapter 15 governs dispute settlement for matters covered under the Agreement, with the 
exception of Chapter s 5 (SPS); 6 (TBT); 10. (movement of natural persons); and 12 (electronic 
commerce) .  
5.15.   Recourse to the dispute settlement mechanism established by Chapter 15 is without prejudice 
to the rights of the Parties to have recourse to dispute s ettlement procedures available under other 
international trade agreements to which they are both parties, including under the WTO . The 
Agreement provides for the choice of the dispute settlement forum  (Article 15.4) . However, when a 
dispute settlement foru m has been elected , the forum selected shall be used to the exclusion of the 
other . 
5.16.   The Parties endeavour to agree on the interpretation and application of the Agreement through 
cooperation (Article 15.1) and/or consultations with the aim of reaching a mut ually agreed solution 
(Article 15.5). A Party may at any time agree to good offices, conciliation or mediation (Article 15.6).   
5.17.   In case the consultations fail to resolve a dispute, recourse to an arbitral tribunal is possible 
and the applicable procedures and disciplines are described in Articles 15.7 through 15.17. The  
disciplines and procedural steps  established under the Agreement , mainly modelled on the WTO 
dispute settlement modalities, cover the establishment and composition of an arbitral tribunal45; 
functions of arbitral tribunals; rules of interpretation; rules of procedure of an arbitral tribunal46; 
suspension or termination of proceedings; report of the arbitral tribunal; implementation of the final 
report; reasonable period of time for the implemen tation of the final report; and compliance review. 
Rules on compensation and suspension of concessions and obligations are also possible as defined by 
Article 15.16. A post -suspension review is also envisaged and applicable rules are contained in 
Article  15.17. 
                                                
45 A Code of Conduct applicable to arbitrators is contained in Annex 15 -A. 
46 Annex 15 -B contains model rules of procedure for the arbitral tribunal. An indicative timetable for the 
arbitral tribunal is contained in an Attachment t o Annex 15 -B. Source:  WTO Secretariat based on the Agreement.  
 FTA Joint Commission  
(Art. 14.1 and 14.2)  
Committee on Trade in Goods  
(Art. 2.15)  
Committee on Sanitary and Phytosanitary Measures  
(Art. 5.11)  
Committee on Technical Barriers to Trade  
(Art. 6.13)  
Committee on Trade in Services  
(Art. 8.20)  
Committee on Final Services  
(Art. 7)  
Committee on Investment  
(Art. 9.7)  
Committee on Movement of Natural  Persons  
(Art. 10.16)  
Committee on Intellectual Property  
(Art. 11.24)  WT/REG36 9/1 
 
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  5.18.   Chart 5.2 below summarizes the main steps of the dispute settlement mechanism established 
by the Agreement.  
Chart 5.2 Specific Dispute Settlement Mechanism established by the Agreement  
 
 
5.19.   With respect to investment, and i n the event of an investment dispute, an investor -State 
dispute settlement mechanism (ISDS) is establ ished in Section B of Chapter 9  (investment). 
Articles  9.10 through 9.25 govern the proceedings of the ISDS and cover consultations; submission of 
a claim to  arbitration; consent of each party to arbitration; conditions and limitations on consent of 
each Party; constitution of the tribunal; conduct of the arbitration; transparency of arbitral 
proceedings; governing law; interpretation of Annexes; expert re ports; consolidation; awards; 
appellate review; annexes and footnotes; and service of documents. In connection with the signing of 
the Agreement, the Parties have exchanged side letters on the common understanding reached during 
the negotiations of Chapter 9 i n relation to arbitrations initiated pursuant to Section B of Chapter 9. 
The Parties agree to enter into consultations within 12 months of the date of entry into force of the 
Agreement on the future application of the UNCITRAL47 Rules on Transparency in Tre aty-based 
Investor -State Arbitration to arbitration initiated pursuant to Section B of Chapter 9. Unless the 
parties otherwise agree, the UNCITRAL transparency rules shall not apply to such arbitrations.  
                                                
47 UNCITRAL refers to the United Nations Commission on International Trade Law.  Source:  WTO Secretariat based on the Agreement.  
 Consultations (Art. 15.5)  
Establishment of a Panel  
(Art. 15.7)  
(Annex 15 -A) 
Proceedings (Art. 15.8 – 
15.11 and Annex 15 -B) 
Panel R eport  
(Art. 15.12)  
(Temporary) suspension of 
benefits by complaining Party 
(Art. 15.16)  Compliance review  
(Art. 15.15)  Cooperation (Art. 15.1)  
Ruling by the Panel on 
the level of compensation 
or of the suspension  
(Art. 15.16 paragraph 6)  Non-impleme ntation  
(Art. 20.14)  
Compensation agreed 
between the Parties  
(Art. 15.16)  Good offices, Mediation and 
Conciliation (Art. 15.6)  
Implementation of the  
Final Report  
(Art. 15.13 and Art. 15.14)  
Post-suspension Review  
(Art. 15.17)  WT/REG36 9/1 
 
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  5.7  Relationship with other agreements concluded by the Parties  
5.20.   Article 1.1 states that the Agreement is consistent with Article XXIV of GATT 1994 and Article V 
of GATS.  
5.21.   The Parties also affirm their existing rights and obligations with respect to each other under 
existing bilateral and multilateral agreements  to which both are a party, including th e WTO Agreement 
(Article 1.2). Nothing in the Agreement derogates from the existing rights and obligations of the 
Parties under the WTO or any other multilateral or bilateral agreement to which both Parties are a 
party. In the event of inconsistency between the Agreement and other agreements to which both 
Parties are a party, consultations are foreseen between the Parties to find a mutually satisfactory 
solution.  
5.22.   Table 5.1 below shows the Parties' RTAs, notified and n on-notified, other than the Agreement.  
Table 5.1 Australia and China: Participation in other RTAs (notified and non -notified in 
force), as of 24 May 2016  
RTA Name  Date of 
entry into 
force  Coverage  GATT/WTO Notification  
Year WTO Provision  
AUSTRALIA  
Japan - Australia  15-Jan-15 Goods & Services  2015 GATT Art. XXIV & GATS Art. V  
Republic of Korea - 
Australia  12-Dec-14 Goods & Services  2014 GATT Art. XXIV & GATS Art. V  
Malaysia - Australia  01-Jan-13 Goods & Services  2013 GATT Art. XXIV & GATS Art. V  
ASEAN - Australia - New 
Zealand  01-Jan-10 Goods & Services  2010 GATT Art. XXIV & GATS Art. V  
Australia - Chile 06-Mar-09 Goods & Services  2009 GATT Art. XXIV & GATS Art. V  
Thailand - Australia  01-Jan-05 Goods & Services  2004 GATT Art. XXIV & GATS Art. V  
United States - Australia  01-Jan-05 Goods & Services  2004 GATT Art. XXIV & GATS Art. V  
Singapore - Australia  28-Jul-03 Goods & Services  2003 GATT Art. XXIV & GATS Art. V  
Australia - New Zealand 
(ANZCERTA)  01-Jan-83 
01-Jan-89 Goods & Services  1983 
1995 GATT  Art. XXIV & GATS Art. V  
South Pacific Regional 
Trade and Economic 
Cooperation Agreement 
(SPARTECA)  01-Jan-81 Goods  1981 Enabling Clause  
Australia - Papua New 
Guinea (PATCRA)  01-Feb-77 Goods  1976 GATT Art. XXIV  
CHINA  
China - Republic of Korea  20-Dec-15 Goods & Services  2016 GATT Art. XXIV & GATS Art. V  
Iceland - China  01-Jul-14 Goods & Services  2014 GATT Art. XXIV & GATS Art. V  
Switzerland - China  01-Jul-14 Goods & Services  2014 GATT Art. XXIV & GATS Art. V  
China - Costa Rica  01-Aug-11 Goods & Servic es 2012 GATT Art. XXIV & GATS Art. V  
Peru - China  01-Mar-10 Goods & Services  2010 GATT Art. XXIV & GATS Art. V  
China - Singapore  01-Jan-09 Goods & Services  2009 GATT Art. XXIV & GATS Art. V  
China - New Zealand  01-Oct-08 Goods & Services  2009 GATT Art. X XIV & GATS Art. V  
Pakistan - China  01-Jul-07 
10-Oct-09 Goods & Services  2008 
2010 GATT Art. XXIV & GATS Art. V  
Chile - China  01-Oct-06 
01-Aug-10 Goods & Services  2007 
2010 GATT Art. XXIV & GATS Art. V  
ASEAN - China  01-Jan-05 
01-Jul-07 Goods & Services  2005 
2008 Enabling Clause & GATS Art. V  
China - Macao, China  17-Oct-03 Goods & Services  2003 GATT Art. XXIV & GATS Art. V  
China - Hong Kong, China  29-Jun-03 Goods & Services  2003 GATT Art. XXIV & GATS Art. V  
Asia Pacific Trade 
Agreement (APTA) - 
Accessio n of China  01-Jan-02 Goods  2004 Enabling Clause  
Asia Pacific Trade 
Agreement (APTA)  17-Jun-76 Goods  1976 Enabling Clause  WT/REG36 9/1 
 
- 40 - 
 
  RTA Name  Date of 
entry into 
force  Coverage  GATT/WTO Notification  
Year WTO Provision  
The Cross -Straits Economic 
Cooperation Framework 
Agreement (ECFA)  12-Sep-10 Goods & Services  Not notified  
APTA - Accession of 
Mongol ia 26-Oct-13a Goods  Not notified  
a The Standing Committee of the APTA reached a consensus officially welcoming Mongolia as the 
7th member of the Agreement. This was done on the occasion of its 42nd session, which was held from 
25 to 26 October 2013.  
Sourc e: WTO Secretariat.  
 
5.8  Government procurement  
5.23.   The Parties shall commence negotiations on government procurement as soon as possible after 
the completion of negotiations on the accession of China to the Agreement on Government 
Procurement, contained in Annex 4 to the WTO Agreement, with a view to concluding, on a reciprocal 
basis, commitments on government procurement between the Parties (Article 16.8).  
5.9  Intellectual property rights  
5.24.   Chapter 11  covers intellectual property rights. The Parties reaffirm their righ ts and obligations 
under the TRIPS Agreement  and any other multilateral agreement relating to intellectual property to 
which both Parties are party.  
5.25.   The Parties commit to grant national treatment for the protection of intellectual property , 
subject to the  exceptions provided under the TRIPS Agreement and those multilateral agreements 
concluded under the auspices of WIPO to which the Parties are party . Additional derogations to 
national treatment a re also indicated in paragraph 3 of Article 11.5 .  
5.26.   In relati on to certain public health measures  (Article 11.7) , the Agreement refers to the 2001 
WTO Declaration on the TRIPS Agreement and Public Health  (Doha Declaration) and the Parties 
reaffirm the Decision of the WTO General Council ( 2003) on paragraph 6 of the Doha Declaration, as 
well as the Protocol amending the TRIPS Agreement  (2005).  
5.27.   The Agreement contains specific provisions on  matters otherwise covered under the TRIPS 
Agreement. This is particularly the case with respect to  patents ( Articles 11.10 and 11.1 1 on 
amendments, corrections and observations on patent applications; and on publication of patent for 
invention application 18 months after the filing date); and on trademarks (Articles 11.12 through 
11.14 on types of si gns as trademarks; certification an d collective trademarks; and well -known 
trademarks). Each Party also recognises that geographical indications may be protected through a 
trademark or sui generis  system or other legal means (Article 11.15).  Article 11.16 foresees 
cooperation between the Pa rties to encourage and facilitate the protection and development of plant 
breeder's rights. Protection of genetic resources, traditional knowledge and folklore is addressed by 
the Agreement (Article 11.17). Further discussion between the Parties on the mat ter is also 
anticipated by the Agreement.  The agreed disciplines on collective management of copyrights are 
contained in Article 11.19.  
5.28.   The Parties retain their freedom to determine whether, and under what conditions, the 
exhaustion of intellectual propert y rights applies. Further discussion shall take place between the 
Parties on exhaustion (Article 11.8). The procedures on acquisition and maintenance o f intellectual 
property rights are governed by Article 11.9.  
5.29.   Article 11.21  addresses enforcement of intel lectual property rights. It establishes modalities 
applicable to criminal  procedures and penalties in accordance with the TRIPS Agreement.  A framework 
for the application of border measures in connection with intellectual property rights is established in 
Article 11.22.  Undisclosed information are protected along the principles established in Article 11.18, 
while limits to liability of, or remedies available against, internet service providers for copyright 
infringement by the users of online services or fa cilities, are addressed in Article 11.20 .  WT/REG36 9/1 
 
- 41 - 
 
  5.30.   A Committee on Intellectual Property is established in Article 11.24 , inter alia , to review, 
monitor and assesses the implementation of Cha pter 11 . Cooperation between the Parties with 
respect to intellectual prop erty policies is foreseen under Article 11.23.  
5.10  Other  
5.10.1   Electronic commerce  
5.31.   Chapter 12 contains disciplines applicable to electronic commerce. Its objective is to promote 
electronic commerce between the Parties, including by encouraging cooperation on electro nic 
commerce. The Parties shall endeavour to ensure that bilateral trade through electronic commerce is 
not more restricted than other forms of trade (Article 12.1).  
5.32.   The Agreement  specifies that neither Party shall impose customs duties on electronic 
transmissions b etween the Parties (Article 12.3 ), subject to the WTO Ministerial Decisions in relation 
to the Work Programme on Electronic Commerce.  Moreover, each Party shall adopt or maintain 
measures regulating electronic commerce taking into account the UNCITRAL Model Law on Electronic 
Commerce  and, as appropriate , other international standards .48 Chapter 12 also  contain s disciplines 
and/or commitments on electronic authentication and electronic signatures (Article 12.6); online 
consumer protection (Article 12.7); online personal data protection (Article 12.8); and paperless 
trading (Article 12.9) . 
5.33.   Transparency disciplines and the Parties' commitments on encouraging cooperation on 
electronic commerce are contained in Articles 12.4 and 12.10.  
5.34.   The provisions in Chapter 15 (on dispute settlement) are not applicable to the disciplines on 
electronic commerce.  
5.10.2   Competition  
5.35.   Under Article 16.7 (on competition cooperation), the Parties agree to cooperate and coordinate, 
as appropriate, in enforcing competition laws and policies subject to each Party's confidentiality 
requirements.  
                                                
48 Regulatory burden on electronic commerce shall be minimized and measures regulating electronic 
commerce shall support industry -led development of electronic comm erce. WT/REG36 9/1 
 
- 42 - 
 
  ANNEX 1  
INDICATORS OF TRADE LIBERALIZATION UNDER  THE AGREEMENT  
Australia  
1. Table A1.1 shows tariff liberalization by Australia in relation to China 's imports (by total, 
agricultural and non -agricultural products). In 2015 , Australia's average applied MFN rate was 
2.6% overall (2.8 % for non -agricultural products and 1.3% for agricultural products). 47.6% of 
Australia's tariff was duty free on an MFN basis; 43.6% of non -agricultural products and 7 3% of 
agricultural products were duty free. At the time of entry into  force of the Agreement (2015 ), 
Chinese exporters enjoyed a  relative margin of preference of 88.5% vis-à-vis the prevailing MFN 
tariff; 85.7% for non -agricultural goods and 100% for agric ultural products. The share of duty free 
lines applicable to imports from China  immediately at the entry into force of the Agreement was 
91.6% (99.3% for agricultural products and 90.3% for non -agricultural products). During the 
following years, this share  will furthe r increase to reach 100% in 2019 , at the time Australia will 
have fully implemented its tariff elimination programme.  
Table A1.1 Australia: Indicators of MFN tariff rates and preferential rates for imports 
from China  
Origin 
of 
goods  Year ALL P RODUCTS  Agricultural productsa Non-agricultural products  
Average applied 
tariff  Share of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff  Share 
of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff  Share 
of 
duty-
free 
tariff 
lines 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) 
MFN 2015 2.6 5.0 47.6 1.3 5.0 73.0 2.8 5.0 43.6 
China  2015 0.3 4.1 91.6 0.0 3.3 99.3 0.4 4.1 90.3 
2016 0.2 2.7 91.6 0.0 1.7 99.3 0.3 2.7 90.3 
2017 0.0 2.8 98.5 0.0 0.0 100.0  0.0 2.8 98.2 
2018 0.0 1.4 98.5 0.0 0.0 100.0  0.0 1.4 98.2 
2019 0.0 0.0 100.0  0.0 0.0 100.0  0.0 0.0 100.0  
a WTO Definition.  
Based on the HS 2012 nomenclature.  
Source:  WTO estimates based on data from Australia.  
2. Table A1.2 gives an indication of additional market access in Australia resulting from the 
entry into force of the Agreement for China 's top 25 global exports, which accounted for 29.9% of 
its global exports in 2012 -2014; these corresponded to 53 lines of Australia's tariff at the six -digit 
level (us ing the HS  2012). In 2014, prior to the entry into force of the Agreement, 36 of these 
tariff lines already had (MFN) duty free access to Australia's market. With the entry into  force of 
the Agreement, in 2015 , 15 of the 1 7 tariff lines, which were (MFN) d utiable, became duty free for 
exports from China . The 2 remaining dutiable tarif f lines became duty -free in 2017 .  WT/REG36 9/1 
 
- 43 - 
 
  Table A1.2 Australia: Market access opportunities under the agreement for China's top 
25 exports to the world  
China's top export products in 2012 -2014  Access Conditions to Australia's import markets  
HS number and description of the 
product  Share in 
global 
exports 
(%) MFN 2015  No. of duty 
free lines 
under the 
agreement  
Remain 
Dutiable  Average 
MFN 
applied 
rate (%)  No. of 
dutiable 
lines  No. of  
duty 
free 
lines  
2015  
2017  
847130  Some d ata-processing 
machines, automatic, 
portable, weighing <= 10 kg, 
consisting of at least a central 
processing unit, a keyboard 
and a display  5.1 0.0  1    
851712  Telephones for cellular 
networks "mobile telephones " 
or for other wireless networks  4.4 0.0  1    
851770  Parts of telephone sets, 
telephones for cellular 
networks or for other wireless 
networks and of other 
apparatus for the transmission 
or reception of voice, images 
or other data, n.e.s.  2.0 2.5 1 1 1   
901380  Liquid crystal devices, n.e.s. 
and other optical appliances 
and instruments not 
elsewhere specified in chapter 
90 1.6 0.0  1    
711319  Some a rticles of jewellery and 
parts thereof, of precious 
metal other than silver, 
whether or not plated or clad  
with precious metal  1.5 5.0 1  1   
854231  Electronic integrated circuits 
as processors and controllers, 
whether or not combined with 
memories, converters, logic 
circuits, amplifiers, clock and 
timing circuits, or other 
circuits  1.4 0.0  1    
847330  Parts and accessories of 
automatic data -processing 
machines or for other 
machines of heading 8471, 
n.e.s.  1.3 0.0  1    
851762  Some m achines for the 
reception, conversion and 
transmission or regeneration 
of voice, images or other data, 
incl. switching and ro uting 
apparatus  1.2 0.0  1    
890190  Some v essels for the transport 
of goods and vessels for the 
transport of both persons and 
goods  0.9 2.5 1 1 1   
271019  Medium oils and preparations, 
of petroleum or bituminous 
minerals, not containing 
biodiesel, n.e .s. 0.9 0.0  12    
640299  Some f ootwear with outer 
soles and uppers of rubber or 
plastics  0.8 2.5 1 1  1  WT/REG36 9/1 
 
- 44 - 
 
  China's top export products in 2012 -2014  Access Conditions to Australia's import markets  
HS number and description of the 
product  Share in 
global 
exports 
(%) MFN 2015  No. of duty 
free lines 
under the 
agreement  
Remain 
Dutiable  Average 
MFN 
applied 
rate (%)  No. of 
dutiable 
lines  No. of  
duty 
free 
lines  
2015  
2017  
854140  Some p hotosensitive 
semiconductor devices, incl. 
photovoltaic cells whether or 
not assembled in modules or 
made up into panels; light 
emitti ng diodes  0.8 0.0  1    
847170  Storage units for automatic 
data-processing machines  0.8 0.0  1    
850440  Static converters  0.8 2.5 1 1 1   
854232  Electronic integrated circuits 
as memories  0.8 0.0  1    
847150  Some p rocessing units for 
automatic data -processing 
machines, whether or not 
containing in the same 
housing one or two of the 
following types of unit: 
storage units, input units, 
output units  0.6 0.0  1    
853400  Printed circuits  0.6 0.0  1    
852580  Television cameras, digital 
cameras and vid eo camera 
recorders  0.6 2.5 1 1 1   
854239  Some e lectronic integrated 
circuits  0.6 0.0  1    
950300  Tricycles, scooters, pedal cars 
and similar wheeled toys; 
dolls' carriages; dolls; other 
toys; reduced -size "scale" 
recreational models, working 
or not; puzzles of all kinds  0.6 3.5 7 3 7   
852872  Reception apparatus for 
television, colour, whether or 
not incorporating radio -
broadcast receivers or sound 
or video recording or 
reproducing apparatus, 
designed to incorporate a 
video display or screen  0.6 5.0 1  1   
844331  Machines which perform two 
or more of the functions of 
printing, copying or facsimile 
transmission, capable of 
connecting to an automatic 
data processing machine or to 
a network  0.5 0.0  1    
711590  Articles of precious metal or of 
metal cl ad with precious 
metal, n.e.s.  0.5 0.0  1    WT/REG36 9/1 
 
- 45 - 
 
  China's top export products in 2012 -2014  Access Conditions to Australia's import markets  
HS number and description of the 
product  Share in 
global 
exports 
(%) MFN 2015  No. of duty 
free lines 
under the 
agreement  
Remain 
Dutiable  Average 
MFN 
applied 
rate (%)  No. of 
dutiable 
lines  No. of  
duty 
free 
lines  
2015  
2017  
852990  Some p arts suitable for use 
solely or principally with 
transmission and reception 
apparatus for radio -
broadcasting or television, 
television cameras,  digital 
cameras, video camera 
recorders, radar appara tus, 
radio navigational aid 
apparatus or radio remote 
control apparatus, monitors 
and projectors, n.e.s.  0.5 2.5 2 2 2   
611030  Some j erseys, pullovers, 
cardigans, waistcoats and 
similar articles, of man -made 
fibres, knitted or crocheted  0.5 5.0 1   1  
TOTALS  29.9 1.3 17 36 15 2  
 Based on the HS 2012 nomenclature . 
Source:  WTO estimates based on data from Australia ; WTO-IDB and UNSD, Comtrade database.  
China  
3. Table A1.3 shows tariff liberalization by China in relation to Australia's imports (by total, 
agricultural and non -agricultural products). In 2015, China's average applied MFN rate was 9.7% 
overall (8.9% for non -agricultural products and 15% for agricultural products). 8.4% of China's 
tariff was duty free on an MFN basis; 8.5% of non -agricultural pr oducts and 7.8% of agricultural 
products were duty free. At the time of entry into force of the Agreement (2015), Australian 
exporters enjoyed a relative margin of preference of 25.8% vis-à-vis the prevailing MFN tariff; 
28.1% for non -agricultural goods an d 17.3% for agricultural products. The share of duty free lines 
applicable to imports from Australia immediately at the entry into force of the Agreement was 
29.2% (13.3% for agricultural products and 31.8% for non -agricultural products). During the 
follow ing years, this share will further increase to reach  96.7% in 2024, following ten years of 
implementation and  96.8% in 2029  (97.5% for non -agricultural products and 92.3% for 
agricultural products) , when  China will have fully implemented its tariff elimina tion programme.  
Table A1.3 China , Republic of : Indicators of MFN tariff rates and preferential r ates for 
imports from Australia  
Origin of 
goods  Year ALL PRODUCTS  Agricultural productsa Non-agricultural products  
Average applied 
tariff  Share 
of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff  Share of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff  Share of 
duty-
free 
tariff 
lines 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) 
MFN 2015 9.7 10.6 8.4 15.0 16.3 7.8 8.9 9.7 8.5 
Australia  2015 7.2 10.2 29.2 12.4 14.3 13.3 6.4 9.3 31.8 
2016 5.6 7.9 29.2 10.0 11.5 13.3 4.9 7.1 31.8 
2017 3.9 5.6 29.2 7.6 8.7 13.4 3.3 4.9 31.8 
2018 2.3 3.2 29.2 5.2 6.0 13.4 1.8 2.7 31.8 
2019 0.6 12.8 95.0 2.8 21.1 87.0 0.3 8.1 96.3 WT/REG36 9/1 
 
- 46 - 
 
  Origin of 
goods  Year ALL PRODUCTS  Agricultural productsa Non-agricultural products  
Average applied 
tariff  Share 
of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff  Share of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff  Share of 
duty-
free 
tariff 
lines 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) 
2020 0.6 12.3 95.0 2.7 20.8 87.2 0.3 7.6 96.3 
2021 0.6 11.8 95.0 2.6 20.2 87.2 0.3 7.0 96.3 
2022 0.6 11.7 95.2 2.5 22.3 88.7 0.2 6.5 96.3 
2023 0.5 13.2 95.9 2.5 24.8 90.1 0.2 7.2 96.9 
2024 0.5 15.7 96.7 2.4 30.0 91.9 0.2 8.2 97.5 
2025 0.5 15.7 96.7 2.4 29.9 91.9 0.2 8.2 97.5 
2026 0.5 15.9 96.7 2.4 31.6 92.3 0.2 8.2 97.5 
2027 0.5 15.9 96.7 2.4 31.6 92.3 0.2 8.1 97.5 
2028 0.5 15.9 96.7 2.4 31.6 92.3 0.2 8.1 97.5 
2029 0.5 16.1 96.8 2.4 31.6 92.3 0.2 8.2 97.5 
a WTO Definition.  
Note: Tariff lines subject to in -quota rates are excluded in the computation. For the calculation of 
averages, specific rates are excluded and the ad valorem  parts of alternate rates are included.  
 Based on the HS 2012 nomenclature.  
Source:  WTO estimates b ased on data from China and WTO -IDB. 
 
4. Table A1.4 gives an indication of additional market access in China resulting from the entry 
into force of the Agreement for Australia's top 25 global exports, which accounted for 74.3% of its 
global exports in 2012 -2014; these corresponded to 62 lines of China's tariff at the six -digit le vel 
(using the HS  2012). In 2015 , prior to the entry into force of the Agreement, 12 of these tariff 
lines already had (MFN) duty free access to China's market. With the entry into for ce of the 
Agreement, in 2015, 18 of the 50  tariff lines, which were (MFN) dutiable, became duty free for 
imports  from Australia. 28 of the  remaining dutiable tariff lines will become  duty-free in 2017  
(1 tariff line), 2019 (13 lines) and 2024 (14 lines) . Four tariff lines49 will remain dutiable after the 
full implementation by China of its tariff elimination programme  with applied MFN tariffs in 2015 
ranging from 9% to 65% . 
Table A1.4 China , Republic of: Market access opportunities under the agreement for 
Australia's top 25 e xports to the world  
Australia's top export products in 2012 -2014  Access Conditions to China's import markets  
HS number and description of the 
product  Share 
in 
global 
exports 
(%) MFN 2015  No. of duty free 
lines under the 
agreement  
Remain  Dutiable  
Average 
MFN 
applied 
rate 
(%) No. of 
dutiable 
lines  No. 
of 
duty 
free 
lines  
2015  
2017  
2019  
2024  
260111  Some n on-agglomerated iron 
ores and concentrates  24.5 0.0  3      
270112  Bituminous coal, whether or 
not pulverised, non -
agglomerated  15.4 4.5 2  1 1    
271111  Natural gas, liquefied  5.9 0.0  1      
710813  Gold, incl. gold plated with 
platinum, in semi -
manufactured forms, for non -
monetary purposes  5.3 0.0  1      
                                                
49 HS 100199 (some wheat and meslin); 520100 (some cotton products); 510111 (some wool 
products); and 120510 (some barley).  WT/REG36 9/1 
 
- 47 - 
 
  Australia's top export products in 2012 -2014  Access Conditions to China's import markets  
HS number and description of the 
product  Share 
in 
global 
exports 
(%) MFN 2015  No. of duty free 
lines under the 
agreement  
Remain  Dutiable  
Average 
MFN 
applied 
rate 
(%) No. of 
dutiable 
lines  No. 
of 
duty 
free 
lines  
2015  
2017  
2019  
2024  
270900  Petroleum oils and oils 
obtained from bituminous 
minerals, crude  4.0 0.0  1      
100199  Some w heat and meslin  2.4 65.0 1      1 
281820  Some a luminium oxide  2.1 8.0 1  1     
260300  Copper ores and concentrates  2.0 0.0  1      
020230  Frozen, boneless meat of 
bovine animals  1.4 12.0 1     1  
740311  Copper, refined, in t he form 
of cathodes and sections of 
cathodes  1.2 2.0 3  3     
300490  Some m edicaments consisting 
of mixed or unmixed products 
for therapeutic or prophylactic 
purposes, put up in measured 
doses "incl. those in the form 
of transdermal 
administration" or in forms or 
packings for retail sale  1.0 3.6 10  9  1   
760110  Aluminium, not alloyed, 
unwrought  1.0 5.0 2  2     
520100  Cotton, neither carded nor 
combed  0.9 40.0 1      1 
510111  Greasy shorn wool, incl. 
fleece -washed wool, neither 
carded nor combed  0.9 38.0 1      1 
271019  Medium oils and preparations, 
of petroleum or bituminous 
minerals, not containing 
biodiesel, n.e.s.  0.9 6.5 11    11   
020130  Fresh or chilled bovine meat, 
boneless  0.8 12.0 1     1  
120510  Low erucic acid rape or colza 
seeds "yield ing a fixed oil 
which has an erucic acid 
content of < 2% and yielding 
a solid component of 
glucosinolates of < 30 
micromoles/g"  0.7 9.0 1 1     1 
100390  Some b arley 0.6 3.0 1  1     
260800  Zinc ores and concentrates  0.6 0.0  1      
220421  Some w ine of f resh grapes, 
incl. fortified wines, and grape 
must whose fermentation has 
been arrested by the addition 
of alcohol, in containers of <= 
2 l 0.5 14.0 1    1   
260200  Manganese ores and 
concentrates, incl. ferruginous 
manganese ores and 
concentrates, with a  
manganese content of >= 
20%, calculated on the dry 
weight  0.5 0.0  1      WT/REG36 9/1 
 
- 48 - 
 
  Australia's top export products in 2012 -2014  Access Conditions to China's import markets  
HS number and description of the 
product  Share 
in 
global 
exports 
(%) MFN 2015  No. of duty free 
lines under the 
agreement  
Remain  Dutiable  
Average 
MFN 
applied 
rate 
(%) No. of 
dutiable 
lines  No. 
of 
duty 
free 
lines  
2015  
2017  
2019  
2024  
870323  Some m otor cars and other 
motor vehicles principally 
designed for the transport of 
persons, incl. station wagons 
and racing cars, with spark -
ignition internal combustion 
reciprocating piston engine of 
a cylinder capacity > 1.500 
cm³ but <= 3.000 cm³  0.5 25.0 12     12  
260700  Lead ores and concentrates  0.4 0.0  1      
261690  Some p recious -metal ores 
and concentrates  0.4 0.0  1      
880330  Some p arts of aeroplanes or 
helicopters, n.e.s.  0.4 1.0 1  1     
TOTALS  74.3 9.9 50 12 18 1 13 14 4 
Note:  For the calculation of averages, specific rates are excluded and the ad valorem  parts of alternate 
rates are included .  
 Based on the HS 2012 nomenclature.  
Source:  WTO estimates  based on data from China  and UNSD -Comtrade database . 
_________