RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/TPR/G/178 
29 January 2007  
 
(07-0347) 
Trade Policy Review Body Original: English 
   
 
  
 
TRADE POLICY REVIEW 
 
Report by 
 
AUSTRALIA 
 
  
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statement by Australia is attached. 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Australia. Australia WT/TPR/G/178 
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CONTENTS 
 
    Page 
I. INTRODUCTION 5 
II. ECONOMIC ENVIRONMENT 5 
(i) Domestic Settings 5 
(ii) Reforms  6 
III. TRADE POLICY  6 
(i) Australia and the WTO 6 
(ii) Regional Initiatives 8 (iii) Bilateral Initiatives 9 
(iv) Australia’s Tariff Regime 10 
(v) Australia’s Quarantine Regime 10 
IV. FUTURE DIRECTIONS OF AUSTRALIAN TRADE POLICY 10 
 
  Australia WT/TPR/G/178 
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I. INTRODUCTION 
1. This is Australia’s fifth trade policy review.  It takes place at a critical time for the global 
trading system.  The difficulties facing the D oha Round of multilateral tr ade negotiations are of 
serious concern.  Significant distortions remain in  the global trading system, particularly in the 
agricultural sector, and the Doha negotiations offer the best hope for reducing these distortions on a 
comprehensive basis and creating the conditions for enhanced economic growth, including in 
developing countries. 
2. Trade is vital to Australia’s economy and the prosperity of its people.  The Australian 
Government’s commitment to an open, flexible ec onomy has been a key factor in Australia’s strong 
economic and trade performance over the last 15 years.  Australia is committed to pursuing 
vigorously the reduction of trade barriers and expans ion of its markets through multilateral, regional 
and bilateral approaches. 
3. Australia’s highest trade priority is the successful conclusion of the Doha Round, and it 
continues to urge all WTO members to demonstrate greater flexibility in the negotiations.  Despite the 
current buoyancy of the global economy, the interna tional community should not be complacent about 
the need to reduce significantly barri ers to trade.  The final Doha package must deliver substantial 
new trade opportunities for all WTO members by opening markets for agricultural and industrial products and services, as well as through reductions in agricultural subsidies.  The potential global 
economic benefits of an ambitious outcome ar e significant:  in November 2005 the World Bank 
estimated that full merchandise trade liberalisat ion alone would boost global welfare by up to 
US$290 billion in 2015.  Such a result would make a major contribution to global poverty alleviation. 
4. As part of its comprehensive trade strategy, Au stralia also pursues WTO-consistent bilateral 
and regional free trade agreement (FTAs) where these would yield significant market openings faster than those achievable through a multilateral WTO r ound.  Australia considers that comprehensive, 
WTO-consistent FTAs can complement and support multila teral liberalisation efforts.  Since its last 
Trade Policy Review in 2002, Australia has conc luded ambitious FTAs with the United States, 
Singapore and Thailand. 
II. ECONOMIC ENVIRONMENT 
(i) Domestic Settings 
5. Australia continues to have one of the best performing economies in the developed world.  
The Australian economy is now in its 15th con secutive calendar year of uninterrupted economic 
growth.  Since 1992, Australia has had continuous r eal growth averaging 3.8 per cent per annum on a 
calendar year basis.  Solid growth is expected to  continue, with economic conditions remaining very 
supportive of growth – corporate profits are high, in flation is moderate and the unemployment rate is 
at a 30 year low.  The strong global economy should also provide significant impetus to the Australian economy.  Trade policy is a key component of Au stralia’s economic policy framework, and aims to 
improve the competitiveness of the domestic economy and achieve open markets globally for 
Australian products and services. 
6. Australian market confidence has been enha nced by the Government’s medium-term 
framework for the conduct of fiscal and monetary po licies.  This framework, which includes a focus 
on maintaining a balanced budget, helps deliver  macroeconomic stability, encourages private 
investment in a low interest rate environment, en trenches low public debt and ensures that, over time, 
the current account reflects private saving and invest ment decisions.  The Government’s most recent 
Budget Statement projects an underlying budget cash  surplus of $A10.8 billion in 2006-07.   WT/TPR/G/178 Trade Policy Review 
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7. As part of the Government’s policy framework, the Board of the Reserve Bank of Australia 
has primary responsibility for the conduct of mone tary policy, including a commitment to keep 
consumer price inflation between 2 and 3 per cen t, on average, over the economic cycle.  Since 
March 1996, inflation has averaged around the mid-poi nt of this target.  Such an environment has 
enhanced the Australian economy’s competitiven ess and increased certainty for businesses and 
households.  In turn, low and stable inflation has a llowed the Reserve Bank Board to set lower interest 
rates.  The official cash rate, the interest rate  set by the Reserve Bank, currently stands at 
6.25 per cent. 
(ii) Reforms 
8. Since the last review the Australian Govern ment has introduced major reforms to the 
workplace relations system, designed to increase flexib ility in the labour market.  The key elements of 
these reforms are:  simplified agreement-making pr ocedures to allow wages and conditions to be 
better linked to productivity improvements, but with  a guaranteed safety net of minimum standards; a 
reduced regulatory burden; and the establishment of  the independent Australian Fair Pay Commission 
to determine minimum wages.  It has also con tinued the process of taxation reform, including through 
reductions in personal income tax, increases in family tax benefits and through a number of 
administrative reforms aimed at improving the integrity of the tax system. 
9. Looking to the future, Australia’s peak interg overnmental forum - the Council of Australian 
Governments – recently agreed to a new National Reform Agenda aimed at increasing Australia’s productivity and workforce participation.  This will include reforms to education and training, as well 
as in the areas of energy, transport and infrastructur e.  In addition, the re gulatory burden imposed by 
Australia’s three levels of government (federal, st ate and local) is to be reduced.  The Council is 
expected to consider specific reform proposals in early 2007. 
III. TRADE POLICY 
(i) Australia and the WTO 
10. Australia has been a long-time advocate of an open, transparent and rules-based global 
trading system.  Bringing the Doha Round to a successful conclusion and maintaining a strong 
multilateral trading system is Australia’s highest tr ade priority.  A founding member of the General 
Agreement on Tariffs and Trade (GATT) in 1947 a nd the WTO in 1995, and Chair of the Cairns 
Group of agricultural exporters, Australia has a l ongstanding commitment to multilateral trade reform. 
(a) Australia’s Objectives for the Doha Round 
11. Australia strongly supported the launch of th e Doha Round in 2001.  Australia’s key 
objectives were to achieve a more open global tradin g environment, primarily by expanding market 
access and creating new trade flows in agriculture, industrial products and services, as well as reducing subsidies and strengthening WTO disciplines.   These objectives remain as important as ever.   
Agriculture 
12. Agriculture remains the most distorted sector of international trade.  Fundamental reform of 
global trade in agriculture has long been a key objectiv e for Australia.  Australia will continue to work 
for this goal with its Cairns Group colleagues as well as other WTO members with an interest in 
significant reform of international trade in agricultu re.  In line with the Doha mandate, Australia will 
continue to press those countries with the highest le vels of protection and support to improve their 
offers on agricultural market access and domestic sup port.  An outcome that delivers new commercial Australia WT/TPR/G/178 
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opportunities for all WTO members by reducing trade barriers and cutting subsidies is necessary to 
conclude the negotiations.  All WTO members, ot her than Least Developed Countries (LDCs), will 
need to make a contribution to agricultural trade reform, with appropriate special and differential 
treatment for developing countries.  Australia welcomes the decision taken by Ministers in 
Hong Kong to abolish all forms of export subsidies by the end of 2013, which has been a long held 
objective of the Cairns Group. 
Non-Agricultural Market Access (NAMA) 
13. Australia’s objective in the negotiations on non- agricultural market acc ess (NAMA) is to 
achieve commercially-meaningful improvements in ma rket access, which will require contributions 
from developed and developing countries (other than  LDCs).  Given that trade in non-agricultural 
products accounts for around 90 per cent of global  trade in goods, a strong outcome in the NAMA 
negotiations will provide a signifi cant boost to the global economy. 
Services 
14. In the Doha Round services negotiations, Australia ’s objective is to improve the number and 
quality of market access and other trade-related commi tments made by its major trading partners in 
services.  Australia has continued to lead by example with its successive GATS offers; its initial 
(2003) offer was well received, its revised (May 2005) offer was acknowledged by WTO members as 
very comprehensive, and it has prepared a second revised offer for lodgement when appropriate.  
Australia also is looking for the negotiations to strengthen GATS rules, including on domestic 
regulation. 
Intellectual Property 
15. Australia supports the effective implementa tion of rights and obligations within the 
framework of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).  Australia played a constructive role on the issue of  TRIPS and Public Health  and brings a practical 
and balanced approach to discussions on emerging issues, such as the debate on access and benefit 
sharing of genetic resources.  Australia also is an  active participant in the World Intellectual Property 
Organization and works with regional partners in APEC to promote higher standards of intellectual 
property protection. 
Rules 
16. Australia has supported efforts to clarify and improve the existing WTO rules relating to anti-
dumping, subsidies and countervailing duties.  Au stralia has submitted two subsidy proposals on 
prohibited export subsidies and their enforcement.  Similarly, Australia has been an advocate of 
specific and strengthened disciplines for fisheries subsidies. 
17. Australia continues to play an active role  in the WTO negotiations on regional trade 
agreements (RTAs).  Australia has made a number of submissions aimed at strengthening WTO disciplines on RTAs through the development of a rigo rous definition of "substantially all trade", with 
the aim of encouraging WTO members to nego tiate comprehensive, high-quality RTAs which 
complement rather than detract from the multilateral sy stem.  Australia has also played an active role 
in negotiations on a transparency mechanism, whic h would substantially improve the procedures for 
the notification and examination of RTAs. WT/TPR/G/178 Trade Policy Review 
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Trade Facilitation 
18. Australia supports the negotiation of transparent and consistent rules to reduce “red tape” and 
expedite the clearance of goods, which would deliver  significant benefits to exporters.  Australia’s 
approach to the negotiations is to support concrete proposals that are likely to result in workable 
commitments of practical value to business.  Au stralia makes a significant contribution to capacity-
building in this area, including through its work in APEC and its aid program. 
Trade and Development 
19. Australia believes an ambitious Doha outcome is the most effective way to enhance the 
opportunities for developing countries from world trad e.  The World Bank estimates that freeing all 
merchandise trade and eliminating subsidies c ould lift 32 million people out of poverty by 2015 and 
boost global welfare by up to US$290 billion.  Al most 45 per cent of these gains would flow to 
developing countries.  It is clear that the key development benefits from the Doha Round will come 
from reform of the core negotiating areas, particular ly agriculture.  Agriculture is not only the most 
distorted sector in world trade, but also the sector  from which the majority of developing country 
populations derive their livelihood.   
20. Australia fully supports the development mandate  of the Doha Round, including in relation to 
trade-related technical assistance (TRTA) and capacity building.  Australia has a long history of 
supporting developing countries, particularly LDCs, to  engage in international trade and participate in 
the WTO.  Australia’s current TRTA commitments  are valued at over A$90 million, with most 
activities focussed on South-East Asia and the South P acific.  Australia also supports the development 
of trade-related infrastructure in the Asia-Pacifi c region, and in financial year 2004-05, the aid 
program provided over A$41 million on such activities. 
21. Australia has been a long-term provider of pref erential market access for developing countries 
and LDCs.  Since July 2003, Australia has provi ded comprehensive quota free duty free market access 
for all LDCs on all products with  no phase-in periods or exceptions. 
(b) Dispute Settlement 
22. Australia is a firm advocate of binding dis pute settlement as a fundamental underpinning of 
the rules-based multilateral trading regime.  An  active participant in WTO dispute settlement, 
Australia has been involved in a number of disputes as a complainant, respondent and third party.  It views the system as an important mechanism for promoting and defending Australia’s trade interests.  To mark the tenth anniversary of the WTO dispute settlement system, a collection of Australian 
perspectives on the system is due to be published in late 2006.  
(ii) Regional Initiatives 
(a) Asia-Pacific Economic  Cooperation (APEC) 
23. Australia has a strong commitment to APEC as the principal vehicle for the promotion of 
open markets and economic cooperatio n in the Asia-Pacific region.  For Australia, APEC’s work on 
trade liberalisation, business facilitation and economic  reform support its open market objectives and 
sustained economic growth in regional economies.  Another key pillar of APEC is its economic and 
technical cooperation work.  Australia provides st rong policy and financial support for this work, 
particularly where it enhances developing economies’  capacity to participate in trade negotiations. Australia WT/TPR/G/178 
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24. As host of APEC in 2007, Australia will con tinue to emphasise the primacy of a strong 
multilateral trading system for global economic growth and the alleviation of p overty.  We will also 
play an active role in APEC’s work on regiona l economic integration, including by emphasising the 
benefits of a comprehensive approach and by promoting greater consistency and coherence in 
FTAs/RTAs in the region.  Australia has contributed  to APEC’s work on trade facilitation, including 
in the area of customs barriers, standards, bus iness mobility and e-commerce, which has reduced 
transaction costs by five percent since 2001 and aims  to reduce them by a further five percent by 
2010.  Australia will also look to boost APEC’s work on economic reform and behind the border 
impediments to trade during 2007, recognising that  this has the potential to boost competitiveness and 
trade and investment in the region. 
(iii) Bilateral Initiatives 
(a) Australia–US Free Trade Agreement 
25. The Australia–United States Free Trade Agre ement (AUSFTA) entered into force on 
1 January 2005.  AUSFTA provides a comprehens ive and ambitious framework for economic and 
trade policy engagement between Australia and the United States.  Its 23 chapters set out a broad 
range of provisions for liberalising bilateral trade and for the legal protections investors and service 
providers will receive.  AUSFTA contains compre hensive provisions on go vernment procurement 
which have been extended to all trading part ners.  The Agreement also makes substantial 
commitments to liberalise services and investment.  AUSFTA established a Working Group on Professional Services, which aims to facilitate incr eased trade in professional services through mutual 
recognition arrangements.  A Financial Services Comm ittee was also set up to explore ways to further 
integrate the Australian and US financial markets. 
(b) Singapore–Australia Free Trade Agreement 
26. The Singapore–Australia Free Trade Agreement (SA FTA) entered into force on 28 July 2003.  
SAFTA is a comprehensive agreement, making substantial commitments in goods, services and 
investment between Australia and Singapore.  In addition to complete tariff elimination, SAFTA 
guarantees liberal conditions of access for many se rvice suppliers, and provides a more open and 
predictable business environment.  SAFTA includes a mechanism that provides for ministerial-level 
review of the agreement.  The first SAFTA review was held in July 2004.  Subsequent reviews are 
scheduled to take place every two years,  or as deemed necessary by Ministers. 
(c) Thailand–Australia Free Trade Agreement 
27. The Thailand–Australia Free Trade Agre ement (TAFTA) entered into force on 
1 January 2005.  TAFTA is a major market openi ng agreement, eliminating more than half of 
Thailand’s tariffs and 83 per cent of Australia’s ta riffs on entry into force.  Under TAFTA’s tariff 
elimination schedules, around 95 per cent of all tari ffs will be at zero by 2010.  TAFTA liberalises 
bilateral trade in services in that it accords “GATS- plus” market access and national treatment in the 
sectors set out in the agreement.  TAFTA should de liver a more open, predictable and transparent 
business environment.  It also mandates further negot iations on trade in services within three years of 
entry into force, with the aim of enhancing the co mmitments given by both Parties.  The Agreement 
also provides for further negotiations on government  procurement, business mobility, investment and 
competition policy. WT/TPR/G/178 Trade Policy Review 
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(iv) Australia’s Tariff Regime 
28. More than 86 per cent of Australia’s tariff lines are applied at an MFN rate of 5 per cent or 
less, with over 47 per cent duty free.  The aver age applied tariff rate is 3.5 per cent.  Since 
1 July 2003, Australia has provided duty-free and qu ota-free access to the Australian market for all 
goods originating from LDCs, with no exceptions and no phasing.  The Government is committed to a 
forward program of further tariff reductions.  Ta riffs in the passenger motor vehicle sector are 
legislated to fall to 5 per cent in 2010.  A review of passenger motor vehicle tariffs is scheduled to be 
held in 2008.  Tariffs in the textiles, clothing and f ootwear (TCF) sector are le gislated for reduction to 
no more than 10 per cent in 2010 for clothing and certain  finished textile articles, with tariffs on other 
TCF goods being no higher than 5 per cent.  By 2015 all tariffs on TCF pr oducts will be no higher 
than 5 per cent.  Australia app lies only one tariff quota, on cheese. 
(v) Australia’s Quarantine Regime 
29. Australia’s quarantine system is designed to preserve its favourable pest and disease status 
and its unique and diverse native flora and fauna.  Australia’s quarantine system is based on an 
objective, science-based assessment of the risks of pests and diseases consistent with international 
obligations, including those under the WTO Agre ement on the Application of Sanitary and 
Phytosanitary Measures. 
30. In October 2006, Australia announced reforms to its import risk analysis (IRA) process which 
will make this process more streamlined, timely a nd transparent.  The key improvements are:  the 
setting of maximum timeframes for the completion of IRAs; enhanced transparency of the IRA work 
program; and strengthened scientific scrutiny of indi vidual IRAs.  These changes will take effect in 
early 2007, enhancing the efficiency and effectiveness of Australia’s quarantine system. 
IV. FUTURE DIRECTIONS OF AUSTRALIAN TRADE POLICY 
31. Australia has a major stake in maintaining a healthy and open multilateral trading system.  It 
will continue to work hard for genuine trade liber alisation, integrating multilateral commitments with 
regional and bilateral initiatives to maximise ec onomic opportunities for Australian businesses.   
32. Australia’s highest trade priority remains the conclusion of the Doha Round.  An ambitious 
outcome will deliver substantial new trade opportun ities for all WTO members.  Australia will also 
continue to participate actively in the work of  the WTO not directly connected to the Doha 
negotiations, including the WTO’s regular comm ittees and the dispute settlement mechanism. 
33. Australia will continue efforts to deepen its trade and economic engage ment with its region 
and other important markets.  Australia rema ins committed to negotiating comprehensive, 
WTO-consistent FTAs.  In the WTO, Australia will continue to press for more effective WTO 
disciplines on RTAs. 
34. Australia commenced FTA negotiations with ASEAN and New Zealand in 2005.  As at 
December 2006, seven negotiating rounds and several  inter-sessional meetings have been held.  
Parties are working to conclude the negotiations in 2007. 
35. Australia and China launched negotiations on an FTA in 2005.  The seventh round of 
negotiations will be held in December 2006, when market access negotiations on goods and services 
will begin.  Both sides are expected to exchange detailed information on tariff proposals, as well as 
lists of barriers affecting trade in services and inv estment that each expects to be addressed in the 
negotiations. Australia WT/TPR/G/178 
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36. Australia and Malaysia launched FTA negotiati ons in 2005 and are now seriously engaged in 
the substantive stage of negotiations. 
37. Australia and Japan agreed in April 2005 to conduct a joint government study into the 
feasibility of a bilateral FTA.  In June 2006, Austra lia initiated a study into the merits and feasibility 
of negotiating an FTA with the Gulf Cooperation Council (GCC).  The Government plans to release 
the results of the study and to announce proposed ne xt steps in December 2006.  In December 2006, 
Australia announced that it had agreed in principl e to commence FTA negotiations with Chile and that 
it would commence consultations in early 2007.  
 
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