WT/RE G369/2 /Rev.1  
 
8 November 2016 
(16-6121) Page: 1/14 
Committee on Regional Trade Agreements  Original: English /Spanish  
 
FREE TRADE AGREEMENT  BETWEEN AUSTRALIA AN D CHINA  
(GOODS AND SERVICES)  
QUESTIONS AND REPLIE S 
Revision  
 The following communication, dated  7 November 2016, is being circulated at the request of 
the delegations of Australia and China.  
 
_______________  
 
 
Quest ions from the delegation of Canada  
 
1.1.  Paragraph 3.3: This section notes that the Trade in Goods 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 entr y into force of the Agreement".  
a. Has this report been provided?  
Response from the delegations of Australia and China  
 
No. 
 
b. What specific issues is this report expected to address/cover?  
Response from the delegations of Australia and China  
 
 China and Austr alia are in the process of developing the report.  
 
c. Will the report be made public or available to WTO Members?  
Response from the delegations of Australia and China  
 
 China and Australia have not yet discussed the report 's distribution.  
 
1.2.  Table 3.4: China of fers preferential treatment under its different bilateral and 
regional trade agreements. The Working Party Report on China's Accession to the WTO,  
Paragraph 91, reads as a Most -Favoured Nation (MFN) forward commitment, stating 
that "the representative of C hina confirmed that for wood and paper products, the same 
rates of duty, including the rates applied under a preference programme, customs union 
or free -trade area, would be applied to all imports of wood and paper products. The 
Working Party took note of this Commitment.  "Table 3.4 notes that there are 43 Chinese 
tariff lines in HS Section IX (Wood and Articles of Wood) and 118 Chinse tariff lines in 
HS X (Pulp of Wood or Other Fibrous Cellulose Material; Recovered Paper and 
Paperboard; Paper and Paperboar d and Articles Thereof). China provides duty -free WT/REG369/2 /Rev.1  
 
- 2 - 
 
  access to Korea under the China -Korea FTA on 51 tariff lines1 (in HS Sections IX & X) 
that China has excluded from tariff elimination under the Agreement.  
 Will China extend the preferential access granted  on these specific wood and paper 
products to all WTO members on an MFN basis? If so, when?  
 
Response from the delegation of China  
 
 China has already taken note of this issue. As the scope of wood and paper products is not 
specified in relevant commitment s, China will study it further.  
 
1.3.  Paragraph 3.19: This section states that "China shall operate a Country -Specific 
Tariff Rate Quota (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 CSTQ for the products of Australian origin will be 
consistent with the detailed Rules for Implementation of Administration of Tariff Rate 
Quota of Wool and Wool Tops in 2015 or any successor ru les in force for any given 
year".  
a. Does this mean the allocation system can be changed later?  
 As written in Annex 2 -A, rules China applies to the administration of the CSTQ of Wool and 
Wool tops will be consistent with the Detailed Rules for Implementatio n of Administration on 
Import Tariff Quotas of Wool and Wool Tops in 2015 (Ministry of Commerce Announcement 
No. 65 of 2014) or any successor rules in force in any given calendar year.  Therefore , if there is 
any change in this area of the above -mentioned R ules, the allocation system will be changed 
accordingly.  
 
b. Are there any plans to review it in the near -term?  
 China and Australia have not yet discussed the review of the allocation system.  
 
1.4.  Paragraph 4.3 : Article 8.24 of the Agreement sets out a process f or Australia and 
China to initiate further negotiations on trade in services, at a mutually agreeable time, 
in the form of a negative list approach.   
a. Have discussions between Australia and China commenced with a view to 
initiating the next round of negotia tions?   
Response from the delegations of Australia and China  
 
No. 
 
b. Will notice be given to the WTO when negotiations are concluded?  
Response from the delegations of Australia and China  
 
Notification will be provided of any changes to the Agreement, consist ent with paragraph 14 
of the General Council Decision on the Transparency Mechanism for Regional Trade Agreements, 
14 December 2006 (WT/L/671).  
 
1.5.  Paragraph 4.6.3 : Canada notes with interest that Australia and China have 
exchanged side letters on their share d understanding to strengthen cooperation in the 
area of financial services.   
                                                
1 Specific ally: HS 44109011, 44109019, 44111211, 44111219, 44111229, 44111291, 
44111299, 44111311, 44111391, 44111411, 44111419, 44111429, 44111491, 44111499, 
44119210, 44119290, 44119410, 44119421, 44119429, 44121019, 44121091, 44121092, 
44123210, 44123290, 4412941 0, 44129491, 44129492, 44129910, 44129991, 44129992, 
44181090, 48022010, 48026110, 48044200, 48051200, 48059110, 48131000, 48139000, 
48239010, 48239090, 49070010, 49070090, 49081000, 49089000, 49090010, 49090090, 
49100000, 49111090, 49119100, 49119910 and 49119990.  WT/REG369/2 /Rev.1  
 
- 3 - 
 
   What progress in this area has been made to date?  
 
Response from the delegations of Australia and China  
 
 Progress has been made in areas including furthering discussions about prudential 
frameworks in both countries; expeditiously processing applications by each other 's financial 
institutions for the establishment of subsidiaries, branches and sub -branches; reinforcing 
cooperation and information sharing on payments system overs ight; and working to facilitate 
cooperation in the exchange of financial intelligence related to money -laundering and terrorist 
financing.  
 
1.6.  Paragraph 5 : We would be interested to know whether the parties considered 
including provisions relating to anti -corruption as part of the general provisions of the 
agreement.  
Response from the delegations of Australia and China  
 
 A number of provisions in ChAFTA safeguard procedural fairness. Articles 13.4 and 13.5 
(Transparency Chapter) are particularly relevant in t his regard. These provisions require, inter alia , 
that all laws, regulations, procedures and administrative rulings of general application to which 
ChAFTA applies be administered in a consistent, impartial, objective and reasonable manner. They 
also requir e Australia and China to establish or maintain judicial, quasi -judicial, or administrative 
tribunals or procedures for the purposes of the prompt review and, where warranted, correction of 
final administrative actions regarding matters covered by ChAFTA. I mportantly, such tribunals are 
to be impartial and independent of the office or authority entrusted with administrative 
enforcement and are not to have any substantial interest in the outcome of the matter.  
 
 We also consider ChAFTA to afford Australia and  China policy space in respect of domestic 
anti-corruption measures. We note, for instance, that Article 16.2 (General Provisions and 
Exceptions Chapter) incorporates, inter alia, Article XIV(c) GATS and Article XX(d) GATT for the 
purpose of Chapters 2 -6, 8, 10, and 12.  
 
 Canada may also take note that ChAFTA incorporates a mechanism to undertake a general 
review of the Agreement (see Article 16.5 , General Provisions and Exceptions Chapter), and, more 
specifically, includes a provision for the Parties to c ommence negotiations on government 
procurement as soon as possible after the completion of negotiations on the accession of China to 
the Agreement on Government Procurement .  
 
1.7.  Paragraph 5.3.2 : In the Agreement, the parties incorporated Article XXI (Securit y 
Exceptions) of GATT  1994 and Article XIV bis of GATS (Security Exceptions) by 
reference, instead of introducing the text which replicates these articles as China and 
Australia have done in some agreements with other FTA partners.  
 Aside from simplicity,  are there any other reasons for preferring this approach?  
 
Response from the delegations of Australia and China  
 
 The text in Australia 's FTAs and in China's FTAs  is the result of negotiated outcomes in those 
various Agreements . 
 
1.8.  Paragraph 4.50 : It is no ted that China agrees to list within one year, through its 
examination and evaluation procedures, the 77 Australian CRICOS -registered higher 
education institutions that are set up in accordance with Australian laws and eligible to 
confer diplomas or degre es recognized by Australian education authorities.  
a. What criteria were used to select the higher education institutions that are 
listed on the Chinese website www.jsj.edu.ch ?  WT/REG369/2 /Rev.1  
 
- 4 - 
 
  Response from the delegations of Australia and China  
 
 This is the number of Australian CRICOS registered higher education institutions that were 
not listed on the JSJ website during the final negotiations of ChAFTA and will be added to the 
existing 105 Australian institutions on the website.  
 
 The Chinese website should be www.jsj.edu.cn . The higher education institutions  to be listed 
on the website should be set up in accordance with the laws of home country and eligible to confer 
diplomas or degrees recognize d by the education authorities  of home country. Meanwhile, the 
education quality  of the institutions  should be recognized and recommended by the education 
authorities . 
 
b. Could China please describe the website www.jsj.ed u.ch? 
Response from the delegation of China  
 
China and Australia share the view that education services are not only important in their 
own right, but also play an important role in facilitating trade and investment, enhancing growth 
and prosperity, and d eepening mutual understanding, and institutional and people -to-people links  
between the two countries.  
The website www.jsj.edu.cn  is a platform issuing information on the foreign education and 
Sino-foreign cooperative education . China and Australia will make joint efforts to ensure the 
smooth implementation of the Agreement and will continue to discuss listing on the website 
www.jsj.edu.cn  of additional CRICOS -registered institution s. 
Questions from the delegation of the European Union  
 
Provisions on trade in goods  
Sanitary and phytosanitary measures  
 
In reference to the Committee on Sanitary and Phytosanitary Measures established 
under the Agreement, the EU is aware that the Commi ttee met, for the first time, on 
1st June 2016 in Beijing.  
 
1.9.  Paragraph 3.30: Could the Parties present what were the topics discussed at the 
first meeting of the Committee and, in particular, clarify whether any outcomes in terms 
of further cooperation or t echnical assistance under Articles 5.6 and 5.9 have been 
agreed?  
Response from the delegation s of Australia and China  
 
 The China -Australia Free Trade Agreement (ChAFTA) Committee on Sanitary and 
Phytosanitary Measures (SPS Committee) held its inaugural me eting in Beijing on 1 June 2016 
under the auspices of the Australia -China Sanitary and Phytosanitary High Level Dialogue 
(SPS High Level Dialogue).  The Committee agreed that the existing SPS High Level Dialogue would 
also constitute the ChAFTA Committee on  Sanitary and Phytosanitary Measures.  
 
 The SPS High Level Dialogue discussed both SPS technical and cooperation issues relating to 
the trade in animal, plant and food products between both countries.  Both sides exchanged 
information and views on next step s for a range of SPS issues, and agreed to a number of SPS 
protocols to facilitate trade.  
 
Anti-dumping and countervailing measures  
 
1.10.   Paragraph s 3.48-3.50: Could the Parties clarify whether, with the entry into force 
of the Agreement, they have enhanced th eir cooperation under the pre -existing High 
Level Dialogue on Trade Remedies?   WT/REG369/2 /Rev.1  
 
- 5 - 
 
  Response from the delegations of Australia and China  
 
As part of the 2003 Australia China Trade and Economic Framework, Australia and China 
agreed to establish a High Level Bila teral Dialogue on Trade Remedies.  ChAFTA formalises the 
Dialogue through its inclusion in the trade remedies chapter.   
 
1.11.   Could the Parties also clarify how regularly does this forum meet and what issues 
are typically the subject of discussion?  
Response from  the delegations of Australia and China  
 
 Four Dialogues have been held since 2004.  Under ChAFTA, the dialogue will be held 
regularly but with no fixed timing.  The Dialogue was intended to serve as an avenue to discuss 
and pre -empt trade remedy issues aris ing between Australia and China and to exchange 
information on any proposed changes to trade remedy policies.   
 
Provisions on trade in services and investment  
Liberalization commitments  
 
The Parties' current liberalization commitments in services and inves tment are 
asymmetric, with Australia using a negative list approach for both, while China has 
scheduled its services commitments on a positive list basis and made no commitments 
on investment.  
 
1.12.   Paragraph 4.23: With reference to Articles 8.24 and 9.9, could  the Parties clarify 
when the next round of negotiation on trade in services in the form of negative listing 
approach, and a review of the investment legal framework between them will be 
initiated?   
Response from the delegations of Australia and China  
 
 Article 8.24 provides that China and Australia will consult within two years after entry into 
force of the Agreement and every two years after, or as otherwise agreed, to review the 
implementation of Chapter 8 and consider other trade in services issues of m utual interest, with a 
view to the progressive liberalisation of the trade in services between them.  
 
 No timetable has been agreed upon at this stage regarding matters provided for in 
Article  8.24(3).  
 
 The Parties will conduct a review of the investment legal framework between them within 
the prescribed time frame of three  years after the entry into force of ChAFTA unless the Parties 
agree otherwise (Article 9.9(1)).  
 
Investment screening  
 
The agreement reserves policy space to screen Chinese proposals fo r foreign investment 
in agricultural land at $A15 million and in agribusiness at $A55 million. While this 
agreement, in line with most of Australia's earlier FTA's, raises the screening threshold 
at which investors from China in non -sensitive sectors are c onsidered by the Foreign 
Investment Review Board from $A252 million to $A1,094 million, the new thresholds for 
agricultural land and agribusiness investments do not apply to earlier FTA partners 
(such as the US, Chile and New Zealand) and therefore create a tiered system of 
investment review procedures, complicating the process for potential investors.  
 
1.13.   Will Australia consider standardising its investment policies in order to create a 
level playing field for all investors?   
Response from the delegation of A ustralia  
 
 The higher thresholds for screening of private foreign investment in some sectors under 
Australia 's FTAs are the result of negotiated outcomes in those various agreements.  
 WT/REG369/2 /Rev.1  
 
- 6 - 
 
  General provisions of the agreement  
Dispute settlement  
 
This agreement a ppears to depart from the ISDS provisions agreed by Australia in other 
agreements (for example: KAFTA), notably on transparency measures. The agreement 
provides that the respondent state has the discretion to conduct the hearing in public or 
private and ma y decide whether the parties' submissions, and the transcripts of the 
proceedings, may be published.  A side letter on ISDS establishes that the Parties will 
enter into consultations within 12 months of entry into force on the future application of 
the Unit ed Nations Commission on International Trade Law (UNCITRAL) Rules on 
Transparency in Treaty -based Investor Disputes.   
 
1.14.   Paragraph 5.19: Could the Parties clarify whether these consultations have 
already commenced?  
Response from the delegations of Australia  and China  
 
 Consultations on the future application of the UNCTIRAL Rules on Transparency in Treaty -
based Investor Disputes will commence within the 12 month timeframe of entry into force of 
ChAFTA, as stipulated in the side letter.  
 
1.15.   Could the Parties cla rify when do they envisage adopting the UNCITRAL 
transparency rules?  
Response from the delegations of Australia and China  
 
 The Parties are yet to commence consultations on adopting the UNCITRAL transparency 
rules and as such no decisions have been made at  this time.  
 
Questions from the delegation of Japan  
 
1.16.   With regard to paragraphs 4.15 and 4.16 of the Factual Presentation, Article 9.9 of 
the CAFTA prescribes that SMBD and performance requirements will be negotiated as 
additional Articles in the Future Wor k Program. What points are currently under 
discussion between China and Australia? Moreover, ISDS prescribes only NT violation 
case. Do you have any plans to revise it?  
Response from the delegations of Australia and China  
 
Article 9.9 (Future Work Program)  stipulates that unless the Parties otherwise agree, the y 
will conduct a review of the investment legal framework between them no later than three years 
after entry into force of the Agreement, and that negotiations on a comprehensive investment 
chapter sh all commence after the review is completed.  
 The Parties will conduct a review of the investment legal framework between them within 
the prescribed timeframe.  No decisions have been made at this time on the scope of future 
negotiations beyond that stipulat ed under the Future Work Program.  
1.17.   With regard to paragraph 5.29 of the Factual Presentation, paragraph 5 of 
Article  11.22 in the CAFTA are not referring to "contained in traveler's personal luggage 
or sent in small consignment" which are stipulated in the Article 60 of the TRIPS 
Agreement. We would like to know if and how the exception provided by the above 
Paragraph 5 of Article 11.22 is in compliance with the said Article 60 of the TRIPS 
Agreement.  
Response from the delegations of Australia and China  
 
 The text of Article 11.22.5 closely reflects Article 60 of TRIPS and is in compliance with it. 
The key elements of the TRIPS provision are that the Article does not apply to the importation or 
export of small quantities of goods which are also considered to be of a non -commercial nature. 
This is captured in the text of Article 11.22.5.  
 WT/REG369/2 /Rev.1  
 
- 7 - 
 
   The additional words "contained in travellers ' personal luggage or sent in small 
consignments " used in TRIPS Article 61 are only illustrative of the circumstances in which sm all 
quantities of goods of a non -commercial nature may be sent.  For these reasons , Australia [and 
China] see no inconsistency or derogation from the TRIPS in Article 11.22.5 . 
 
Questions from the delegation of Mexico  
 
1.18.   Paragraph 3.22: Annex II contains produ ct specific rules of origin and the 
conditions that need to be fulfilled for products to qualify as originating 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, a s indicated in Section C of Annex II, 
constitutes the main criteria used to determine origin in cases of substantial 
transformation of goods, the regional value content (RVC) can be used as an alternative 
criterion in a number of cases.2 The RVC is calcula ted according to the methods defined 
under Article 3.5 (Regional value content). When the RVC is used as an alternative 
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. Spe cific rules applicable to the 
chemical chapter (HS Chapters 27 to 40 that is the product of a chemical reaction) 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 sh all be considered to be an originating 
good of a Party. Chemical reactions are defined in Section B of Annex II.  
 With regard to Article 3.4 on the change in tariff classification and, in particular, 
the criterion used in determining the country of origin,  can the Parties explain the term 
"substantial transformation of goods"?  
 
Response from the delegations of Australia and China  
 
 The term 'Substantial Transformation of Goods' is the level of transformation deemed 
sufficient to confer origin, as agreed by the Parties. With regard to Article 3.4, this is represented 
by the particular change in tariff classification rules in Annex II (Product Specific Rules of Origin).  
 
1.19.   Paragraph 3.31: Article 5.10 provides that the dispute resolution mechanism set 
out in Cha pter 15 does not apply to Chapter 5.  
a. With regard to this exception for Chapter 5, can the Parties indicate  whether 
they have made provision for any mechanism for the amicable resolution of 
trade disputes relating to sanitary and phytosanitary  measures?  
b. If so, can they indicate the mechanism in question and the body responsible for 
this procedure?  
Response from the delegations of Australia and China  
 
 ChAFTA contains a number of opportunities for China and Australia to discuss ways to 
exchange information an d facilitate bilateral trade in animal and plant products, in particular 
through the Committee on Trade in Goods and the Committee on Sanitary and Phytosanitary 
Measures.  
 
1.20.   Paragraph 3.50: Articles 7.9 and 7.10 reiterate notification obligations and 
underli ne the Parties' commitments to afford reasonable opportunities to enhance 
dialogue, and to consult with a view to clarifying the factual situation and to arriving at 
mutually agreed solutions.  
a. Have the Parties agreed on any specific procedure for the cond uct of meetings 
of the High Level Dialogue on Trade Remedies ? 
                                                
2 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 preparations); 35 (casein 
products); 70 (glass mirrors); 78 (lead articles); 79 (zi nc 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).  WT/REG369/2 /Rev.1  
 
- 8 - 
 
  Response from the delegations of Australia and China  
 
 As part of the 2003 Australia -China Trade and Economic Framework, Australia and China 
agreed to establish a High Level Bilateral Dialogue o n Trade Remedies. The Dialogue was intended 
to serve as an avenue to discuss and pre -empt trade remedy issues arising between Australia and 
China and to exchange information on any proposed changes to trade remedy policies.   
 
 ChAFTA formalizes the Dialogu e through its inclusion in the trade remedies chapter. Four 
Dialogues have been held since 2004. Under ChAFTA, the dialogue will be held regul arly but with 
no fixed timing. There are no specific procedures for the conduct of the meetings.  
 
b. If so, can they describe the procedure and indicate the frequency of 
the meetings ? 
Response from the delegations of Australia and China  
 
 Please see answer to (a) above.  
 
 Paragraph 4.11: In relation to investment, similar provisions on national treatment 
and MFN treatmen t are contained in Articles 9.3 and 9.4 with respect to the Parties' 
investors and their investments when those are related to the establishment, 
acquisition, expansion, management, conduct, operation, and sale or other disposition of 
investments. It shoul d 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.  
 
 If China does not commit itself to according the same treatment to Australian 
firms, which mechanism will Australia use to ensure equality of treatment for its firms ? 
 
Response from the delegation of Australia  
 
 The Agreement includes a Future Work Program under which a rev iew will take place.  As per 
the question, the Investment Chapter does include full MFN.  
 
1.21.   Paragraph 4.14: The Agreement does not have specific provisions concerning 
commercial presence other than what is covered implicitly by commitments related to 
the supp ly of services through mode 3, covered by Chapter 8 (trade in services). Some 
non-conforming measures listed in Annex III (either through positive or through 
negative lists) have nationality and/or residence requirements for senior managers 
and/or board of  directors that may affect the ability of service providers to establish 
commercial presence.  
 Can the Parties indicate if there is any mechanism to ensure that service providers 
can establish commercial presence without being hampered by nationality and residence 
requirements, in the case of both positive and negative lists . 
 
Response from the delegations of Australia and China  
 
 Non-conforming measures incorporating nationality or residency requirements reflect the 
outcome of the negotiations. Australia 's minimal residency requirements are set out clearly in its 
non-conforming measures and are subject to the most favoured  nation (Article 8.12) provision of 
the Agreement (except in one instance where more favorable treatment is given to New Zealand 
citizen s). 
 
 Annex III incorporating nationality or residency requirements reflect the outcome of the 
negotiations. China's minimal residency requirements are set out clearly in its positive  list and are 
subject to the most -favoured-nation (Article 8. 7) provision  of the Agreement (except the more 
favorable treatment s are given to the citizens  of (1) Hong Kong, China; (2) Macao, China; and (3) 
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei)).  
 WT/REG369/2 /Rev.1  
 
- 9 - 
 
  1.22.   Paragraph 4.63: Subsidies or grants prov ided by 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).  
 Can the Parties indicate the mechanism that they will use to resol ve disputes 
relating to subsidies which in this case are provided by a country and which infringe 
international trade rules . 
 
Response from the delegations of Australia and China  
 
 The Agreement does not include disciplines on subsidies in relation to serv ices (Chapter 8) 
or investment (Chapter 9). In relation to services we note the commitment to negotiate WTO 
disciplines in relation to services and the right for WTO members to request consultations on 
subsidies in GATS Article XV.  
 
1.23.   Paragraph 5.14: Chapter  15 governs dispute settlement for matters covered under 
the Agreement, with the exception of Chapters 5 (SPS); 6 (TBT); 10. (movement of 
natural persons); and 12 (electronic commerce).  
a. With regard to this exception in Chapter 15, can the Parties indicate whether 
they have made provision for any mechanism for the amicable resolution of 
trade disputes relating to sanitary and phytosanitary measures, technical 
barriers to trade, the movement of persons and electronic commerce ? 
Response from the delegations of  Australia and China  
 
ChAFTA establishes a number of committees for China and Australia to discuss ways to 
exchange information and facilitate bilateral trade separate from formal dispute settlement 
processes, including the Committee on Sanitary and Phytos anitary Measures, the Committee on 
Technical Barriers to Trade and the Committee on Trade in Goods.  
 
All matters relating to the implementation of the agreement can be considered by the Joint 
Commission established under Chapter 14  (Institutional Provision s), and the relevant committees.  
Chapter 10 (Movement of Natural Persons) of the Agreement is subject to the dispute 
settlement provisions, subject to the conditions set out in Article 10.7.  
b. If so, can they indicate the mechanism and, in particular, the bo dy responsible 
for the procedure under each Chapter ? 
Response from the delegations of Australia and China  
 
The Agreement establishes a Committee on Movement of Natural Persons (Article 10.6) with 
functions that include reviewing the implementation and oper ation of Chapter 10 (Movement of 
Natural Persons).  
One of the functions of the Committee on Trade in Services (Article 8.20(2)(c)) is to 
consider '… other trade in services issues of interest to a Party '. The Review clause of the Trade in 
Services Chapter (Article 8.24) also provides opportunity for review of the Trade in Services 
Chapter and for consideration of other trade in services issues of mutual interest.  
1.24.   Paragraph 5.23 The Parties shall commence negotiations on government 
procurement as soon as pos sible 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).  
 While China is finalizing negotiations to sign the WTO Agreement on Government 
Procurement, how will the Parties work together to ensure that each other's business 
sectors enjoy the same treatment as their own firms ? 
 WT/REG369/2 /Rev.1  
 
- 10 - 
 
  Response from  the delegations of Australia and China  
 
 The Parties  look forward to commencing negotiations on government procurement as soon 
as possible after the  completion of negotiations on the accession by China to the Agreement on 
Government Procurement (GPA). Australia is also in the process of  acceding to the GPA.  
 
Questions from the delegation of Peru  
 
1.25.   Regarding customs cooperation, is there any special cooperation mechanism to 
provide each Party with information on significant changes to the other's laws or 
customs procedures . 
Response from the delegations of Australia and China  
 
 ChAFTA provides for several channels through which the Parties can give advanced notice of 
matters regarding customs laws and procedures.  
 
 Article 4.4 (Cooperation) outlines arrangem ents regarding notification.  Paragraph two states 
that "Each Party shall endeavour to provide the other Party with timely notice of any significant 
modification of its customs laws or customs procedures that are likely to substantially affect the 
operation  of this Agreement ". 
 
 Article 4.7 (Transparency) covers the publication of relevant laws and regulations. 
Paragraph  three states that "To the extent practicable and in a manner consistent with its laws and 
regulations, each Party shall publish, in advance  on the internet, draft laws and regulations of 
general application relevant to trade between the Parties, with a view to affording the public, 
especially interested persons, an opportunity to provide comment ". 
 
 Article 4.14 (Consultation) establishes con tact points for matters involving the Customs 
Procedures and Trade Facilitation Chapter. Paragraph two states that "The customs administration 
of each Party shall designate one or more contact points for the purposes of this Chapter and 
provide details of such contact points to the other Party ". And paragraph three states "the customs 
administrations of the Parties may consult each other on any trade facilitation issues arising from 
procedures to secure trade and the movement of means of transport between t he Parties ". 
 
 In addition, as per Article 2.15 (Committee on Trade in Goods), the Committee on Trade in 
Goods may consider issues relating to Chapter 4 (Customs Procedures and Trade Facilitation).  
 
1.26.   With regard to transparency in customs procedures, is the re a hyperlink for 
accessing laws, regulations, administrative rulings and procedures of general 
application relevant to trade in goods between the Parties .  
Response from the delegations of Australia and China  
 
 For Australia: www.border.gov.au/Busi/Free/China   
 
 For China:  www.customs.gov.cn  
 
1.27.   Regarding questions on customs procedures, do the Parties make use of positive 
or negative administrative silence . 
Response from the delegations of Australia and China  
 
 As set out in Article 4.14 (Consultation), paragraph one , "The customs administration of a 
Party may at any time request consultations with the customs administration of the other Party on 
any matter aris ing from the implementation or operation of this Chapter.  Such consultations shall 
be conducted through the relevant contact points, and shall take place within 30 days of the 
request, unless the customs administrations of the Parties mutually determine ot herwise ".  
 
Thus, consultations between the Parties ' customs administrations will take place after a 
request from one of the Parties.  Consultations need not take place until one of the Parties has 
made such a request.  WT/REG369/2 /Rev.1  
 
- 11 - 
 
  Questions from the delegation of the Separate  Customs  Territory  of Taiwan,  Penghu,  
Kinmen  and Matsu3 
 
Trade  environment  
Merchandise  trade  
 
1.28.   Paragraph  1.5: Based  on 2014 trade data, China was Australia's largest source of 
imports and largest destination for exports, while Australia was China's 7 th source of 
imports and 12th largest export destination. Chart 1.1 in the Secretariat's Report shows 
that Australia's bilateral merchandise exports to China decreased in 2014. Since 2012, 
China's economic growth has been slowing down and its imports from other countries 
have declined accordingly.  
 China  was Australia's  largest  export  destination,  therefore  how does  Australia  plan 
to deal with the problem  of the negative  effect  this is having,  and will continue  to have,  
on its exports?  
 
Response from the de legation of Australia  
 
 China is an important trading partner of Australia, but fluctuations in trade volume are not 
unique to trade between Australia and China, nor are reductions in bilateral trade in 2014 related 
to the Agreement.  On the other hand, the  reduction of trade barriers between China and Australia 
following entry into force of the Agreement has seen trade in some goods grow significantly, and 
eliminating the distorting effect of tariffs opens new opportunities that can underpin future growth 
in both partners.  The reduction of barriers to trade across the board is an important, positive 
measure in response to changing economic circumstances and can spur continued growth globally 
and domestically.   
 
Provisions  on trade  in goods  
Liberalization  schedule  
Australia  & China  
 
1.29.   Paragraph  3.12: ... 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.   
 Paragraph  3.16:  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  
Australia,  corresponding  to 95.1%  of China's  total  imports  from  Australia.   
 
 What  is the rationale  for this asymmetric  system  and schedule  of tariff  
liberalization?  
 
Response  from the delegations  of Australia  and China  
 
 The tariff outcomes for Australia and China under the Agreement are a negotiated 
mutually -beneficial outcome in the context of an overall agreement that achieves important 
liberalisation of bilateral trade and investment.  
 
China  
 
1.30.   Paragraph  3.16:  According  to the liberalization  schedule  for goods,  once  
implementation  is completed  (in 2029)  3.2%  of China's  tariffs  will remain  dutiable,  
corresponding  to 263 tariff  lines  and representing  4.9%  of China's  total  imports  from  
Australia.   
 Paragraph  3.17:  The highest  average  tariffs  for lines  remaining  dutiable  are found  
in HS 10 (some  cereals  at 62.2%);  HS 17 (some  sugars  and sugar  confectionery  at 
50%);  and HS 31 (some  fertilizers  at 50%).  
                                                
3 Initial questions  were submitted to the Parties on 27 September 2016. Additional q uestions 
were submitted to the Parties on 17 October 2016 (three weeks before the meeting).  WT/REG369/2 /Rev.1  
 
- 12 - 
 
   Please  explain  the rationale  for this schedule  of tariff  elimination?  
 
Response from the delegations of Australia and China  
 
 Please refer to the answer to Question 1.2 9, above.  
 
Tariff  rate quotas  
 
1.31.   Paragraph  3.18:  With  respec t to Country  Specific  Tariff  Quota  (Article  2.13),  
China's  tariff  rate quotas  (TRQs)  to certain  wool  goods  (HS 51) originating  in Australia  
are specified  in its Schedule  to Annex  I (Category  entitled  "country  specific  tariff  quota,  
"CSTQ").  
 Paragraph  3.19: Unless  otherwise  agreed,  the rules  applying  to the administration  
of the CSTQ  for the 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 2015  or any successor  rules  in force  in any given  calendar  year.  
 
 Could  the parties  please  provide  more  detailed  information  on the 
above -mentioned  rules  applying  to the administration  of their  respective  CSTQs?  
 
Response from the delegation of China  
 
 As in Annex  2-A, China operates the CSTQ in a transparent manner. Please refer to Detailed 
Rules for Implementation of Administration on Import Tariff Quotas of Wool and Wool Tops in 
2015, Detailed Rules for Implementation of Administration on Import Tariff Quotas of  Wool and 
Wool Tops in 2016, MOFCOM and GACC Announcement No. 12 of 2016 on Promulgation of the 
implementing Rules for Administration on Country -specific Import Tariff Quotas of Australian Wools 
in 2016 and other related documents for details.  
 
Provisions  on trade  in services  and investment  
 
1.32.   Paragraph  4.1: Chapter  8 contains  disciplines  on trade  in services,  while  Chapter  9 
covers  investment.  Annex  III to the Agreement  constitutes  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.   
 Paragraph  4.3: A review  clause  is contained  in Article  8.24.  ... 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.   
 
 Could  the Parties  please  provide  a time-table  for the review  process  described  
above?  
 
Response from the deleg ations of Australia and China  
 
 Article 8.24 provides that China and Australia will consult within two years after entry into 
force of the Agreement and every two years after, or as otherwise agreed, to review the 
implementation of Chapter 8 and consider o ther trade in services issues of mutual interest, with a 
view to the progressive liberalisation of the trade in services between them.  
 
 No timetable has been agreed upon at this stage regarding matters provided for in 
Article  8.24(3).  
 
1.33.   Compared to other F TAs that Australia has signed, what are the major 
differentiating characteristics of the China -Australia FTA?  
Response from the delegation of Australia  
Australia has advised the Committee Secretariat that it considers the scope of this question 
is broader  than could be reasonably expected for the examination of a Member' s individual RTA.  WT/REG369/2 /Rev.1  
 
- 13 - 
 
  1.34.   Annex III -Section B -9 of the Agreement) & Pages 26 -27, Table 4.1 of the Report.  
 Australia in Australia – China FTA reserves the right to adopt or maintain any 
measure wit h respect to:  
 - the creative arts, cultural heritage and other cultural industries, including 
audiovisual services, entertainment services and libraries, archives, museums and 
other cultural services;  
 
 - broadcasting and audiovisual services, including m easures with respect to 
planning, licensing and spectrum management, and including:  
 
  (a) services offered in Australia;  
  (b) international services originating from Australia.  
 
 However, in document WT/REG369/1, Table 4.1 Australia: comparison between 
the GATS and Agreement specific commitments , Table 4.1 shows Australia promised to 
open audiovisual services and entertainment services in the FTA.  
 
a. In the Agreement, has Australia truly committed to liberalizing the audiovisual 
services and entertainment s ervices?  
b. What are the specific contents of Australia's liberalization?  
Response from the delegation of Australia  
 
 Table 4.1 provides the Secretariat 's comparison of Australia' s commitments on Audio -Visual 
Services in ChAFTA with its commitments under GAT S and should be read in conjunction with the 
notes t o the table and the Secretariat' s comments on the relevant Australian commitments at 
paragraph 4.4.1.2.2 (Communications Services) of the WTO Report on ChAFTA (Document 
WT/REG369/1).  Australia' s ChAFTA co mmitments are set out in Chapter 8: Trade in Services and 
its associated annexes. These documents are publicly available at 
http://dfat.gov.au/trade/ agreements/chafta/official -documents/Pages/official -documents.aspx . 
 
Questions from the delegation of Thailand  
 
Liberalization commitments  
Australia  
Sector specific commitments  
Transport services  
 
1.35.   According to paragraph 4.43, Australia has specific exis ting non -conforming 
measures are registered with respect to some maritime transport services, the provision 
of some airline services and some activities connected to road transport. In this regard, 
does Australia have a plan to further liberalize this sect or in future?  
Response from the delegation of Australia  
 
 Australia has liberal regulatory regimes for transport services. There are no current plans for 
further liberalization but all relevant policies are subject to ongoing monitoring and review.  
 
Libera lization commitments  
China  
Sector specific commitments  
Educational services  
 
1.36.   According to paragraph 4.50, the  Factual Presentation reported by the Secretariat 
states that China mirrors the commitments made under the GATS with unchanged 
conditions and limi tations. In this regard, why has China maintained those conditions 
and limitations?  WT/REG369/2 /Rev.1  
 
- 14 - 
 
  Response from the delegation of China  
 
 China attaches great importance to promoting the development of services industry by 
opening up, and will set a further liberalizati on plan of related  services subject to domestic market 
demand.  
 
Environmental services  
 
1.37.   According to  paragraph 4.52, the  Factual Presentation reported by the Secretariat 
states that China makes commitments, limited to commercial presence with some 
conditi ons, for hospital services and social services for the aged. In this regard, does 
China have planned to remove such limitation to this sector, and why do so?  
Response from the delegation of China  
 
 China attaches great importance to promoting the developme nt of services industry by 
opening up, and will set a further liberalization plan of related  services subject to domestic market 
demand.  
 
Transport services  
 
1.38.   According to paragraph 4.58, the  Factual Presentation reported by the Secretariat 
states that Chi na's GATS commitments are reproduced under the Agreement with 
additional commitments made for sectors not previously covered such as some air 
transport services and some road transport services. In this regard, does China have 
planned to upgrade its commit ments or not?  
Response from the delegation of China  
 
 China attaches great importance to promoting the development of services industry by 
opening up, and will set a further liberalization plan of related  services subject to domestic market 
demand.  
 
Other  
Competition  
 
1.39.   According to paragraph 5.35, it is provided that Article 16.7 established a 
framework for the parties to cooperate and coordinate on competition -related matters. 
Thailand would like to seek for information whether there is any cooperation or 
coordination which the parties have implemented under Article 16.7 and whether there 
is any difficulty or problem has arisen therefrom.  
Response from the delegations of Australia and China  
 
 Australia and China recognise the importance of cooperation on co mpetition -related matters 
and enjoy an ongoing cooperative relationship between our respective authorities. Before ChAFTA's 
entry into force, the Australian Competition and Consumer Commission (ACCC) and China 's 
National Development and Reform Commission o f the People's Republic of China (NDRC) signed a 
memorandum of understanding (MOU) in November 2015 on international cartel investigations 
affecting Australian and Chinese markets.  
 
 There are two other MOUs between Australia and China in relation to compe tition including:  
 
(1) MOU on Anti -Monopoly Cooperation signed on 20 May 2014; and  
 
(2) MOU on Cooperation between the State Administration for Industry and Commerce of the 
People's Republic of China and the ACCC signed on 18 September 2012.  
 
__________