WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO  WT/TPR/M/178/Add.1 
2 May 2007 
 (07-1827) 
Trade Policy Review Body 
5 and 7 March 2007 Original:   English/Spanish 
 anglais/espagnol  inglés/español 
 
 
TRADE POLICY REVIEW 
AUSTRALIA 
Minutes of Meeting
 
Addendum  
Chairperson:  H.E. Mr. Muhamad Noor Yacob (Malaysia)  
 This document contains the advance written questions, and replies provided by Australia.1 
 
_________________________________________________________________________________ 
Organe d'examen des politiques commerciales 
5 et 7 mars 2007 
 
EXAMEN DES POLITIQUES COMMERCIALES 
AUSTRALIE 
Compte rendu de la réunion  
Addendum  
Président:  S.E. M. Muhamad Noor Yacob (Malaisie) 
 
 Le présent document contient les questions écrites communiquées à l'avance et les réponses 
fournies par l'Australie.1 
 
__________________________________________________________________________________ 
Órgano de Examen de las Políticas Comerciales 
5 y 7 de marzo de 2007 
 
EXAMEN DE LAS POLÍTICAS COMERCIALES 
AUSTRALIA 
Acta de la reunión 
Addendum  
Presidente:  Excmo. Sr. Muhamad Noor Yacob (Malasia) 
 
 En el presente documento figuran las pr eguntas presentadas anticipadamente por escrito, 
junto con las respuestas facilitadas por Australia.1 
 
 
                                                      
 1 In English and Spanish only./En anglais et espagnol seulement./En inglés y español solamente.  WT/TPR/M/178/Add.1 
 Page 3 
 
 
  WRITTEN QUESTIONS BY MEMBERS 
QUESTIONS BY SINGAPORE  
Government Procurement 
Re para 62 (page 50), while Australia has obser ver status in the WTO Committee on Government 
Procurement, it has no intention of becoming a party to the GPA.  
- We note that Australia has experience with  its  regulations relating to government 
procurement. Australia has also made governme nt procurement commitments in three of its 
FTAs. 
Given this experience, why is Australia hesita ting to join the GPA? What potential difficulties 
does Australia see in the GPA? 
Non-Tariff Measures  
1. Is Australia considering a review of the qua rantine requirements for ornamental fish imported 
into Australia?  The current requirement for up to 21 days of quarantine is onerous, especially given 
that this is on top of the 14 days pre-export qua rantine period and acts as an effective barrier to 
exports of such fish to Australia.  
2. Under the current AQIS system, attestation requi rements for the issuance of health certificates 
for the imports of fish, meat and diary products  differ from product to product.  There is not a 
standardised format.  Is Australia considering a re view of the system, to accord greater transparency 
and predictability?   
Services 
3. We note that in the area of maritime transpor t services, Australia has restrictions in areas such 
as ship registration in Australia; Australian repr esentation for international liner cargo shipping 
services, cabotage and offshore transport services.  Does Australia plan to undertake liberalization 
measure in these areas?  
4. The inquiry report on Part X of the Trade Practices Act  describes the conditions under which 
international liner operators are permitted to operate conferences (ie. to provide services for 
Australian exporters and importe rs) while providing safeguards against the abuse of conference 
power. The inquiry report has recommended for Part  X to be repealed and proposed a series of 
amendments if Part X was to be retained.  What ar e Australia’s reactions to the inquiry report? Would 
Australia be following up on the recommendations in the inquiry report?  Would Part X be repealed? 
If not, what amendments would be made to Part X? 
5. Australia stated in a submission on  Air Tr ansport Services that capacity and route rights 
available to foreign airlines serving Australia wi ll be addressed as an implementation of the 
Australian Government’s interna tional aviation policy which con tinues through agency bilateral 
negotiations.   
- We note Australia's progressive stance towards th e liberalisation of air transport services, and 
invite Australia to share its approach towards the liberalisation of foreign carriers' access to 
and beyond Australia.  WT/TPR/M/178/Add.1 
Page 4  
 
  Customs Procedures 
6. We understand  that with the implementation of the Cargo Management Re-engineering 
(CMR) project, Australia would provide industry w ith "greater flexibility in doing business with 
Customs through various communication options togeth er with flexible processes to benefit low-risk 
clients".  Could Australia elaborate on this project? 
7. As one size does not fit all, how does Australia  facilitate the different needs of sectors in its 
customs procedures, such as in dealing with  perishables with respect to minerals. 
8. To what extent is the Australian customs cl earance process paperless?  If it is fully paperless, 
can Australia elaborate on its clearance process, for all modes and containerised/conventional cargo? 
Relatedly, is Australia using electronic carnets for temporary admission of goods? 
QUESTIONS FROM THE UNITED STATES
 
III. Trade Polices and Practices by Measure 
 
Measures directly affecting imports - Tariffs  
 
1. Paragraph 14 on page 31 of the Secretariat report notes that there is at least a five percentage 
difference between Australia’s bound and applied rates.    
Does Australia anticipate narrowing this disp arity?  If so, please outline the timeframe.   
 Measures Directly Affecting Imports—Indirect taxes
 
 
2. In paragraphs 25 and 26 on pages 37 and 38, the Secretariat report notes that aside from 
custom duties, a wine equalization tax (WET) is  applied to domestic and imported wine at a 
29 percent rate.  However, we understand that under the WET rebate scheme, domestic wine 
producers are entitled to a rebate of 29 percent of the wholesale value of domestic sales up to a total 
of A$1 million. 
  
A) Please provide further clarification on the WET, specifically, how it works and to 
whom it is applied.  
B) If in fact domestic producers are entitled to this rebate, has such eligibility been 
extended to other foreign wine producers?  If yes, is Australia considering revisiting 
this scheme to avoid subj ecting imported wine to internal taxes not applied 
domestically?   
 Measures Directly Affecting Imports—S anitary and Phytosanitary Measures
 
 
3. Paragraphs 48-49 on pages 46-47 of the S ecretariat report note that WTO Members have 
raised concerns about strictness of Australia’s san itary and phytosanitary regime and unduly stringent 
quarantine restrictions protect domestic products  from competition, but reduce consumer welfare 
through high prices.  Australia’s regime has re sulted in an effective import ban on many U.S. 
agricultural products and restricts access for many through strict import measures.   
 
Paragraph 53 on page 48 of the Secretariat report notes “early 2007” as the start of the implementation 
of changes in Australia’s import risk analysis (IRA) process that were announced in October 2006. 
  WT/TPR/M/178/Add.1 
 Page 5 
 
 
  A) In the revisions to its IRAs, what ch anges will Australia make to improve the 
predictability and transparency of its IRAs?  
 
B) Can Australia provide a current st atus report of such implementation? 
 
C) What is the timeline envisioned for the new IRA process to become fully operational? 
 4. Paragraph 55 on pages 48-49 of the Secretaria t report states:  “All food imports must comply 
with the Australia–New Zealand Food Standards Code, which was developed by Food Standards 
Australia New Zealand (FSANZ)…”  
 
A) To what standards must Australian food producers adhere?  To what standards must 
New Zealand food producers adhere? 
 B) What are the differences between FSANZ standards and Australia’s national 
standards?  Must exporters to Australia  comply with food standards set by the 
Australian government in addition to those set by FSANZ?  
 C)  How would Australia describe the role of FSANZ in supporting Australia’s efforts to 
meet its WTO obligations?  What are the implications and effects of FSANZ standards-making on third-country trade prospects? 
  
5. According to paragraph 55 on pages 48-49 of  the Secretariat report, imported foods using 
biotechnology can be offered for sale and consum ption in Australia only after being assessed and 
approved by FSANZ and being listed in the Food St andards Code.  According to the paper, FSANZ 
has completed safety assessments of 30 f ood products using gene technology.   
 
A) What is the process by which third-country trading partners may seek product 
approval?  In what publication is there a description? 
 
B) What guidelines or other criteria form the basis for FSANZ’s safety assessments? 
 
6. Paragraph 56 on page 49 of the Secretariat re port states that the Food Standards Code also 
regulates food derived from GM plants, animals or micro organisms, as well as the labeling of GM 
foods.  We understand that the joint Australia-N ew Zealand regulatory regime for food includes 
mandatory labeling requirements for certain foods  produced using biotechnology.  We further 
understand that biotechnology labeling is required if more than 1 percent of a food in its final form 
contains detectable DNA or protein resulting from the application of biotechnology, with a few 
exceptions.  
 
A) For such mandatory process-based labeling regulations that do no t provide relevant 
safety information, a 1 percent threshol d can be burdensome for manufacturers, 
packers, exporters, importers, and retailers.  Has Australia considered the effects of 
such regulations on both import opportuniti es as well as Australia's future use of the 
technology in agriculture production?  If yes,  what is Australia doing to address this 
issue? 
 B) Can Australia explain how the current existence of state-level restrictions and 
moratoria complies with Australia’s national biotech regulatory system? 
 WT/TPR/M/178/Add.1 
Page 6  
 
  Measures Directly Affecting Exports - State Trading
 
 7. While Australia’s single-desk State Trading Enterprises have been modified to allow more 
private sector participations, the Secretariat Repor t (paragraph 76 on page 54) indicates that such 
entities still manage exports of bulk wheat and, in some  states, bulk barley, lupines, canola and rice.   
 
Is Australia considering any further steps to eliminate the monopoly export control of state trading enterprises? 
 Intellectual Property Rights
 
 
8. Paragraph 127 on page 69 of the Secretariat re port notes that Australia has not acceded to the 
1996 WIPO Copyright Treaty or the Performances and Phonograms Treaty.    
Please describe the timeline for Australia’s accession to these treaties.  
 
9. Please describe Australia’s experiences in im posing additional damages in criminal copyright 
cases since implementation of the Copyright Act amendments (referenced in paragraph 140 on 
page 72 of the Secretariat report).  10. Paragraph 144 on page 72 of the Secretar iat report discusses various mechanisms of IPR 
enforcement in Australia. 
 
A) Is customs able to seize suspected infringing goods even without a notice of objection 
lodged by an IPR owner?   
 
B) What is the most effective way for rights  holders to quickly provide information to 
customs authorities regarding suspected imports of infringing goods? 
 
IV. Trade Policies by Sector 
 
Telecommunications
 
 
11. Australia retains foreign equity limits in Tels tra, capped at 35 percent.  Does Australia have 
plans to eliminate these foreign ownership restrictions?  If so, when?  
QUESTIONS OF SWITZERLAND  
 
Report by the Secretariat 
II. Trade Policy Regime:  Framework and Objectives 
 
(6) Trade agreements and arrangements  
(ii) Preferential and regional agreements 
 
Para 33:  What role do you see for preferential trade agreements in the development of Australia 's 
relations with other large emerging economies such as Brazil, Russia, India and China ? 
  WT/TPR/M/178/Add.1 
 Page 7 
 
 
  (7) Foreign investment regime  
(i) Overview  Para. 35  of the Secretariat’s report indicates that while the foreign investment regime in Australia is 
generally transparent and liberal, it contains forei gn equity restrictions in certain “sensitive” sectors 
and a screening process is foreseen to ensure that fo reign investment is not contrary to “national 
interest”. In case of a rejection of the foreign investment by the Treasurer, could the Australian 
authorities indicate what are, if any, the legal possibilities of recourse open to a foreign investor who sees its proposed foreign investment in Australia rejected ?  III. Trade policies and practices by measures  
 
(1) Introduction
 
 
Para. 4 . The Secretariat’s report indicates that Australia  has no plans to become a party to the WTO 
Agreement on Government Procurement and that Aust ralia considers that accession to the agreement 
would impose unnecessary costs and delays on procurem ent operations. Given that Australia attaches 
great importance to transparency and economic effici ency in general, could the Australian authorities 
explain how they reconcile the need for transpar ency and economic efficiency in general with 
procurement and public expenditure practices where only domestic providers are authorized to present 
bids ? Would enlarging the scope of bidders also to foreign suppliers not permit a more competitive 
bidding process and hence ensure cheaper public procurement for the Australian public sector ? 
 (2) Measures directly affecting imports
 
(ii) Tariffs  
Para. 14  of the Secretariat’s report indicates that more  than 40% of Australia’s bound rates currently 
exceed applied MFN rates by at least 5 percentage points. How do you assess the degree of unpredictability thereby created ?   (3) Measures directly affecting exports
  
(i) Registration and documentation 
 
Para. 74  of the Secretariat’s report states that Cust oms may undertake compliance examinations on 
behalf of permit-issuing agencies. It is not clear whether these permit-issuing agencies are domestic agencies or agencies in the importing country. Could Australia provide some details on the "who" and the "why"? 
 
(4) Measures affecting production and trade
 
(iii) Competition and consumer policy 
(a) Competition policy 
  
Para. 107 of the Secretariat’s report indicates that exem ptions to the TPA remain for international 
liner cargo shipping and that restrictions on cartels or iginating from aborad are stricter than on cartels 
formed by domestic exporters. Fu rthermore, the report suggests that anti-competitive behavior can be 
allowed on condition that it is in the public interest. Could the Australian authorities indicate the rationale for exempting maritime transport from co mpetition rules ? Could the Australian authorities 
explain why a domestic cartel is considered as less damaging than a foreign cartel in maritime 
transport ? Also, could the Australian authorities indica te on the basis of what criteria they judge that 
anti-competitive behavior in maritime transport can be in the public interest ? 
 WT/TPR/M/178/Add.1 
Page 8  
 
  IV. Trade Policies by Sector 
 
(2) Agriculture, livestock, forestry, and fisheries
 
(i) Overview  
In para. 6 , the Secretariat’s report mentions that, in r ecent years, around two thirds of the agriculture 
sector’s output was exported directly, making agriculture  the most export-oriented sector after mining. 
Could the Australian authorities indicate, in view of the environmental problems encountered in some of the regions where a substantial agricultural activ ity appears to be concentrated, what measures are 
being taken or considered to ensure that the inte rests of the agro-exporters are reconciled with the 
needs of environmental protection, notably to mitigat e the environmental costs and to ensure the long 
term sustainability of agriculture ?   (3) Mining, Electricity, and Water
 
(iii) Water 
 
Paras 41-44 : Given the water crisis in Australia and know ing that Sydney, for example, has no waste 
water treatment plant, what are the Australian plan s to have wastewater cleaning plants and how open 
are Australian markets to other countries' impor ts of soft and hardware in this field ?  
 In para. 14 of the section (iii) dealing with Assistance unde r the Agriculture heading, the Secretariat’s 
report mentions the existence of an  assistance in the case of drought. In para. 42  of the section (iii) 
dealing with Water, water reform is being d escribed. Could the Australian authorities provide 
information about the agricultural part of this reform and indicate how they intend to achieve a 
rational and sustainable use of resources, notably of water, in this context ? 
QUESTIONS FROM THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, 
KINMEN AND MATSU  
 
A. Report by the Secretariat (WT/TPR/S/178)  
 
I. ECONOMIC ENVIRONMENT 
(4) M AIN STRUCTURAL REFORM ISSUES  
(ii) Labour-market reforms  (page 8, paragraph 18) 
We note that the Australian government is making effo rts to reform the labour market in order to 
increase its flexibility. Further information regard ing specific aspects of its efforts and programme 
would be appreciated: 
 1. Are the main goals of the labour market refo rm solely to increase work force participation and 
labour market flexibility? How does Australia deal  with employment security issues arising from 
labour market flexibility?  
2. Please provide further information on the “Wel fare to Work” programme. In addition, what 
other measures is Australia taking to increase labour force participation?  
3. Apart from the “Work Choices Act”, is Australia taking any other measures  to increase its 
labour market flexibility?  
4. In May 2005, Australia subm itted its revised offer regarding its commitments in Mode 4. 
What is the relationship between this revised  offer and its labour market reform policy?  WT/TPR/M/178/Add.1 
 Page 9 
 
 
   
II. TRADE POLICY REGIME : FRAMEWORK AND OBJECTIVES 
(7) F OREIGN INVESTMENT REGIME  
(i) Overview 
 
(page 24, paragraph 35) The Report states that Australia’s “foreign investment regime is generally transparent and liberal, 
although it contains foreign equity restrictions in  certain "sensitive" sectors, and a screening process 
to ensure that foreign investment is not  contrary to the "national interest".”  
 Please could Australia elaborate further on the "nati onal interest" factors and criteria applied when 
considering whether or not to approve a foreign investment. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(iii) Other charges affecting imports 
 (page 38, paragraph 26) 
An excise was introduced in 2002 on imported and do mestically produced ethanol for use as fuel. For 
the first year, however, the excise paid by domestic producers of ethanol was rebated. 
 
Our concern here is that the tax levied will func tion as a tariff. Could Australia please explain the 
reason for introducing the measure?  
 
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
(iii) State trading  
(page 54, paragraph 76) 
Table III.5, which accompanies paragraph 76 of th e Report, shows State-trading enterprises (STEs) 
for exports, 2006.   
1. Is there any plan for these State-trading en terprises to be privatized in the future?  
 2. If so, is the timetable available now? 
 
3. We are also interested in learning more about the approaches employed, and whether, in the process of privatization, there are any limitations placed on foreign investors? 
 
(iv) Export assistance 
 (page 55, paragraph 78) 
As indicated, under the Export Market Devel opment Grant (EMDG) Scheme, the Australian 
Government reimburses up to 50% of specified e xport promotion expenditures above a threshold of 
$A 15,000. 
 
It would be appreciated if Australia could please provide further information as follows: 
 1. Is the funding of the EMDG Scheme mainly from the government budget, or are there other 
funding sources as well? 
 2. Is there any plan to phase the scheme out over time? 
 WT/TPR/M/178/Add.1 
Page 10  
 
  3. What is Australia’s view on the scheme’s c onsistency with WTO rules and Agreements, in 
particular with regard to the A greeme nt on Subsidies and Countervailing Measures? 
 (4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(iii) Competition and consumer policy 
(a) Competition policy 
General framework 
 
(page 63, paragraph 105) 
One innovation of Australia’s National Competition Policy (NCP) was the system of annual 
competition payments, which were allocated  over the period 1997/98 to 2005/06 by the 
Commonwealth to state and territory governments  for their implementation of the reform.  
 We would be interested in knowing more details of  the payments allocated over the said period, and 
in particular how the National Competition C ouncil decides on the funding level and measures the 
progress made?  (page 64, paragraph 109) 
Under the Competition Policy Agreement, the Austra lian government undertook to review and reform 
legislation, and agreed that legislation should not restrict competition unless it can be demonstrated that the benefits of the restriction to th e community as a whole outweigh the costs.  
 Please could Australia elaborate further on exactly ho w it measures the costs and benefits that relate 
to the restriction?  
 
(page 66, paragraph 115) The Report indicates that price su rveillance may be conducted inform ally or formally. Informal 
surveillance has been used to respon d to consumers’ concerns in, inter alia, insurance, petrol and bank 
fees and charges.   
1. Could Australia please explain the scope of the informal surveillance, and confirm whether or 
not there are any penalties involved in the process?   
2. Does the price surveillance exercise have a ny adverse effects on co mpetition in relevant 
markets?    
(page 67, paragraphs 120 & 121)  
As far as Australia’s policies on consumer protecti on are concerned, which are mentioned briefly in 
the Report, we would be most interested in l earning more about how the government addresses cross-
border consumer disputes, e.g. disputes between foreign consumers and Au stralian business operators, 
or between Australian consumer s and foreign business operators? 
 IV. TRADE POLICIES BY SECTOR (3) M
INING , ELECTRICITY , AND WATER  
(ii) Electricity  
(pages 81-82, paragraph 37) 
We note that the Australian National Electricity Market (NEM) was established in 1998 to break 
down barriers to inter- and intra-state competition in New South Wales, Queensland, South Australia, Tasmania, Victoria, and the Au stralian Capital Territory.   
  WT/TPR/M/178/Add.1 
 Page 11 
 
 
  Could Australia please explain why the Northern Te rritory and Western Australia did not join the 
NEM? Is there any plan for these two states to join  the NEM in the future, thus setting up a nation-
wide electricity market? 
 
(page 82, paragraph 40) In order to create a competitive na tional electricity market, Australia  has made reforms continuously 
in the electricity sector.  To simplify the regulator y framework for the transmission and distribution of 
electricity, the Australian Energy Regulator (AER) and Australian Energy Market Commission 
(AEMC) commenced operation on 1 July 2005.   
 Could Australia please help us better understand exactly how, under the MOU signed by the AER, the 
AEMC, and the ACCC, the two above-mentioned organizations communicate and cooperate in 
practice when directing and monitoring the Natio nal Electricity Market Management Company 
Limited (NEMMCO)? 
 
(page 82, paragraph 40) The Report indicates that the AER has been res ponsible for market surveillance and regulation 
enforcement in the electricity sector since July 2005, and is expected to become the sole regulator in 
the electricty and gas market by the end of 2010.    
1. Could the Australian Government please desc ribe the progress that has been achieved up to 
now?   
2. Have there been any difficulties in the integration process?   
 
3. How will the AER coordinate with the corr esponding authorities of each state after becoming 
the only national energy regulator?  (iii) Water 
 
(pages 82 & 83, paragraphs 41-43) 
The stated overall objective of Australia’s on-going re form programme in this sector is to establish a 
system where water users pay the full cost of the infrastructure and services provided. In urban areas 
this has been largely achieved, wh ereas in rural areas a number of inefficiencies remain. For example, 
approximately 20~40% of the water used for irriga tion is lost due to leakage and evaporation from 
open channels.  
1. We would be interested in learning more a bout whether differential pricing policies apply to 
water used for irrigation, for manuf acturing and by urban consumers? 
 
2. And, who will bear the cost of the above-mentioned lost water. 
 
(4) M
ANUFACTURING  
(i) Textiles, clothing, and footwear  (page 84, paragraphs 48 & 49) 
As the Report states, “the effective rate of assistan ce (ERA) for the textiles, clothing, and footwear 
(TCF) industry was 24.2% in 2003/04, when the overall ERA for the manufacturing sector was 
4.5%.”  
 Our questions are as follows: 
 
1. Could Australia please elaborate further on the formula used to calculate the ERA? WT/TPR/M/178/Add.1 
Page 12  
 
  2. Does Australia plan to reduce the level of ERA in the TCF sector? 
 (page 85, paragraph 52) 
Would Australia kindly provide us with the details  of its TCF structural adjustment programme 
effective from 1 July 2005 for the next ten years and aimed at supporting industry consolidation and labour market adjustment?  
 
(5) S
ERVICES  
(iv) Financial services (a) Banking 
 
(page 92, paragraph 82) 
As indicated, foreign banks may operate in Australia  through locally incorporated subsidiaries and/or 
authorized branches; although branches are not subjec t to minimum capital requirements, they are not 
permitted to accept initial deposits of less than  $A 250,000 from Austra lian residents and non-
corporate institutions.   
It would be appreciated if Australia could please el aborate further on its rationale for maintaining the 
above-mentioned measure, and advise us as to whet her there are plans to eliminate the measure? 
 (vi) Transport 
(a) Maritime services 
 
(page 97, paragraph 105 ) 
The Report notes that: “For example, the Export and Infrastructure Taskforce found capacity 
constraints at most of Australia's bulk ports for the export of coal and iron ore.”  
 Bearing in mind that Australia is a major trader of minerals and agricultu ral products, we would be 
interested to know whether there are any plans in place to expand Australia’s inland railway and port 
infrastructure, so as to increase the capacity  of its handling and storage facilities? 
 
(b) Aviation services 
 (page 98, paragraph 110 ) 
We note that under the bilateral Air Services Agr eement Australia allows consecutive cabotage for 
New Zealand Airlines only. Our questions are:   
1. Could we please be informed of the cond itions for airlines designated as single aviation 
market (SAM) carriers?    
2. We would like to seek Australia's view on th is granting of consecutive cabotage to one airline 
only in the context of Article 7 of the 1944 Chi cago Convention, which stipulates each contracting 
State undertakes not to enter into any arrangements which specifically grant any such privilege on an 
exclusive basis.  
 B. Report by the Government of Australia (WT/TPR/G/178)
 
 
III. TRADE POLICY 
(v) Australia’s Quarantine Regime  
(page 10, paragraphs 29 & 30)  
Australia’s describes its quarantine system as be ing based on an objective, science-based assessment 
of the risks of pests and diseases consistent with international obligations, including SPS Measures. In  WT/TPR/M/178/Add.1 
 Page 13 
 
 
  October 2006, Australia announced reforms to its im port risk analysis (IRA) process, which, among 
other things, will set the timeframes for the completion of IRAs. The changes will take effect in 2007.  
 
We wish to note, in this context, that our govern ment’s application first made in the year 2000 to 
export preserved eggs to Australia still remain s pending, despite the substantial amount of 
supplementary information provided in the meantime.  
Bearing in mind that we have for some years exported the said product to several other countries, 
including the US and Japan, and that no scientific ev idence for refusal has been provided by Australia, 
we would be most grateful for an explanation of the procedures and processing time applied to our 
above-mentioned application. 
QUESTIONS FROM THE EUROPEAN COMMUNITIES  
 
I. ECONOMIC ENVIRONMENT 
 (4) M
AIN STRUCTURAL REFORM ISSUES  
 (i) Tariff and tax reform 
WTO Secretariat's Report, page 7, para. 17 
 
We note that the 25% Luxury Car Tax applied to  the value of vehicles above the Luxury Tax 
Threshold (LTT) of $A57009 remains in force and that the LTT has not changed since 2002-03. This 
is despite the 2002 review of options for post 2005 assistance arrangements for the Automotive 
Manufacturing sector in Australia conducted by the Productivity Commission finding that "As a 
revenue-raising instrument, the luxury car tax has defi ciencies. If it is retained, the threshold for the 
tax (and the associated depreciation limit) would need to be raised to reflect previous price movements in the luxury vehicle market". The EU is concerned that this tax, which seems to be 
biased against imports in its effect, remains in place.   
- Does Australia have any plans, whether as part of its tax reforms or otherwise, either to 
remove this discriminatory tax, or at the very least substantially to increase the LTT? 
 
- Why cars only are subject to this Luxury Tax and not other "luxury" goods?  Provided that just around 5% of the cars in AUS are subject to the luxury tax, raising an estimated 
$A320mn in revenue in 2006-07 or 0.1%  of total receipts, it seems to be a minor source of revenue for 
the Government.   - Why does the Australian government want to  maintain such a cumbersome and heavy 
procedure to collect such a minor amount of revenue? 
 
An effective way to eliminate this tax could be to gradually increase the threshold so as to more 
clearly identify a "luxury car" while reducing the tax ra te during a certain period of time. It is worth 
recalling the abolition of the US Luxury Tax, whic h phase-out consisted on a periodic adjustment of 
the base amount and annually decreasing tax rates during the period 1996-2003. 
 
- Would Australia consider this possibility?  
 
We note that under the 29% Wine Equalisation Ta x (WET) a wine producer rebate was introduced 
from 1 October 2004, initially with a rebate of up  to $A290000 per domestic  producer per financial 
year, but increasing to $A500000 from 1 July 2006. Th is effectively means that first $A1.7mn worth WT/TPR/M/178/Add.1 
Page 14  
 
  of sales by domestic producers is free of the WET. We also note that an equivalent rebate was 
introduced for New Zealand producers as from 1 July 2005. 
 
- Could Australia provide a justification for this discriminatory rebate and indicate whether, as 
part of its tax reforms or otherwise, it is c onsidering extending the reba te to wine from other 
countries? 
 
(ii) Labour-market reforms  WTO Secretariat's Report, page 8, para. 20 
 The Australian report states that the "Government believes that a healthy, skilled, and motivated 
population is critical to workforce participation and productivity", and that under the New National 
Reform Agenda, reform in human capital includes h ealth promotion, education and training, as well 
as labour-market reforms to encourage workforce participation."  
 
- Does Australia have any policies to address the specific effects of more open global trade on 
labour market adjustment? 
 - How does Australia strike the balance between more labour flexibility and basic labour rights, 
particularly in trade-related sectors? 
 II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES   (5) 
TRADE POLICY OBJECTIVES  
 
Trade and environment 
 
- What mechanisms does Australia have in place to ensure adequate coordination of 
environmental policy and trade policy?  
  
(6) T RADE AGREEMENTS AND ARRANGEMENTS  
 
(ii) Preferential and regional agreements 
 
WTO Secretariat's Report, page 23, para. 30 
 The report states that the Thailand – Australia Free trade agreement (TAFTA), entered into force in 
2005, takes a positive list approach in schedu ling commitments on services and investment. 
 - Could Australia elaborate on the contents of the investment commitments agreed upon in 
TAFTA. What are the major differences in comp arison with SAFTA described in paragraph 
27 and AUSFTA described in paragraph 32 as regards investment?  
 WTO Secretariat's Report, page 23, para. 31-32 
 
The analysis commissioned by the Australian Gove rnment to assess the economic impact of the 
Australia-United States FTA found that by far the la rgest benefit (60% approx.) arose from amending 
the threshold for assessing foreign investment proposals by the Foreign Investment Review Board of 
US investors.  - Given Australia's desire to encourage forei gn investment generally (as illustrated by the 
existence of Invest Australia), is any considera tion being given to aligning the thresholds for  WT/TPR/M/178/Add.1 
 Page 15 
 
 
  non-USA investors with those for US investors,  in particular the $A871 million threshold for 
investments in non-sensitive sectors? 
 
(7) F OREIGN INVESTMENT REGIME  
 
WTO Secretariat's Report, page 24, para. 35 
 
The screening procedure for foreign investment in ce rtain sensitive sectors is described in the report. 
It is mentioned that "where the Foreign treasurer considers the proposal is contrary to its national 
interest he may reject it under the Forei gn Acquisition and Takeov er Act 1975 (FATA)". 
 
- Could Australia elaborate on the considerations/c riteria applied in such a procedure? Is this 
procedure followed by a statement of reasons gi ven to the investor? Does the investor have 
the possibility to have its case be reviewed  by an independent authority/tribunal? 
 III. TRADE POLICIES AND PRACTICES BY MEASURE   (2) M
EASURES DIRECTLY AFFECTING IMPORTS  
 (vii) Standards and other technical requirements 
 
WTO Secretariat's Report, page 47, para. 50 
 
To enhance Biosecurity Australia’s independen ce it became a prescribed agency within the 
Department of Agriculture, Fisheries and For estry (DAFF) on 1 December 2004.  However,  
Biosecurity Australia is still located physically with in the DAFF and the Director of Quarantine, who 
is also the Secretary of DAFF, ultimately makes the policy determination. 
 - How can there be confidence that the Import Risk Analysis (IRA) process is truly 
independent from domestic agricultural interests? 
 
WTO Secretariat's Report, page 48, para. 53 
 
In October 2006 Australia announced improveme nts to the IRA process including maximum 
timeframes for IRAs.  Whilst this is to be welcomed  there is still the flexibility for timeframes to be 
suspended in certain circumstance s, such as when Biosecurity Au stralia is waiting for scientific 
information considered essen tial to complete the IRA. 
 
- Could Australia provide clarification on what other circumstances, if any, the timeframes be 
suspended?  
 - In this respect, could Australia also provide an  assurance that it will not use the ability to stop 
the clock as a means to unjustifiably delay the determination of new import conditions? 
 
It is understood that there is a considerable back log of outstanding market access requests (possibly 
150 or more) still to be reviewed.    - Could Australia elaborate on how it intends to reduce this excessive backlog?  
 
- Does Australia intend to consult with exporting countries on their priorities for dealing with 
this backlog?  
 - And if the latter, how will e xporting countries be consulted? WT/TPR/M/178/Add.1 
Page 16  
 
   
The Import Risk Analysis Handbook is a key refe rence document on the Australian IRA process and 
despite significant changes to the process announced in recent years it was last revised in 2003.   
 - In the light of Australia’s claims of enha nced transparency, when will this document be 
updated?  
 
WTO Secretariat's Report, page 48-49, para. 55-58 
 
Australia introduced ‘conservative’ import regime  for bovine spongiform encephalopathy (BSE) in 
2001, which prohibits import of beef and beef products from countries which have had a reported 
indigenous case of BSE.  In introducing this regime , Australia foreshadowed a review of this policy 
within 2 years following implementation, with the re view commencing in August 2003.  To date this 
review has not been completed and there has been no indication when it will be completed.    
- Can Australia indicate when it intends to co mplete its review of its BSE import policy? 
 - In this context, will Australia's policy be made consistent with the new international 
recommendations adopted by the Office Internati onal des Epizoties (OIE) on trade in beef and 
blood products in May 2005? 
 
Australia published its draft Import Risk Assess ment on chicken meat in June 2006. The EU 
submitted detailed comments on the document.   - Can Australia indicate if and when a re vised version will be made available? 
 
Australia publishes its import conditions on the ICON da tabase. This is a useful tool but its value is 
often limited because its conditions are incomple te or may have changed without notice.  
 - Can Australia undertake to maintain the database fully up to date and to inform known traders 
of important changes to import conditions? 
 
Australia has made improvements to transparency in  the fruit and vegetable sector, in particular by 
publishing more information on existing standard s in the ICON database. Nevertheless European 
traders frequently have difficulties even when implemen ting agreed protocols. This is particularly the 
case for citrus fruit.   
- Can Australia say what it will do to further impr ove transparency, particularly with respect to 
pesticides? 
 
Conditions for import of pig meat into Australia have  improved, but there is still a wide range of pork 
products which cannot be sent from the EU.  
 
- Can Australia say if it is considering the po ssibility to reduce or eliminate some of the 
requirements and increase the range of importable products? 
 
Since 2006 Biosecurity Australia has conducted a re view of import policy for dairy products for 
human consumption. 
 
- Can Australia say which of the new Biosecu rity measures related to raw milk will be 
implemented?  WT/TPR/M/178/Add.1 
 Page 17 
 
 
   
(viii) Government procurement  WTO Secretariat's Report, page 50, para. 61  
- Is Australia eventually considering puttin g its industry initiative for the procurement 
arrangements for motor vehicles to rest? 
 - Could Australia explain what kind of accred itation or validation is required as part of the 
conditions for participa tion in open tendering? 
 WTO Secretariat's Report, page 50, para. 62 
 
Australia has observer status in the WTO Comm ittee on Government Procurement, but has no 
intention of becoming a party to the GPA.  The authorities consider that accession to the agreement 
would impose unnecessary costs and delays on procur ement operations. For legal certainty it would 
be desirable that Australia ratified the GPA.   - Is the Government thinking of becoming a party to the GPA? 
 
WTO Secretariat's Report, page 50, para. 63 
 
- Could Australia provide for the year 2004/2005 statistical breakdown of contracts according 
to origin of suppliers (local, foreign) and to goods, supplies, and works? 
 
WTO Secretariat's Report, page 50, para. 65 
 
- Could Australia provide the breakdown of cont racts according to procurement methods (open 
tendering, select tendering and direct sourcing)?  
 
(3) M
EASURES AFFECTING EXPORTS  
 
WTO Secretariat's Report, page 56, para. 57 
 
Australia restricts the exports of certain commod ities to only one company and furthermore, this 
company is allowed to veto exports.   
- Could Australia provide the underlying reas ons for applying these measures? How does 
Australia reconcile these measures wi th its advocacy for free trade?  
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
 WTO Secretariat's Report, page 57-58, para. 99-103 
 
The WTO Secretariat's report refers to assistance provided through the tax system as well as grants and concessional loans. One of the sectors benefiti ng from this support is the financial sector.  
 - Does Australia have specific provisions to help  banks in difficulties? If not, does the state 
normally intervene to prevent failure? If so, how ? Where there many su ch cases in the recent 
past? 
 - Does Australia have specific provisions for ba nks – for example, is it normal that banks 
receive guarantees or financing by the state? WT/TPR/M/178/Add.1 
Page 18  
 
  IV. TRADE POLICIES BY SECTOR 
 (2) A
GRICULTURE , LIVESTOCK , FORESTRY AND FISHERIES .  
 WTO Secretariat's Report, page 74, para. 7 
 
It is stated that "Despite the privatization/corpor atization of some state-trading enterprises, state-
trading arrangements have been maintained fo r exports of some agricultural products."  
 - Could Australia explain the underlying reasons for maintaining these state-trading 
arrangements?  
 
- Which agricultural products are affected?    
WTO Secretariat's Report, page 77, para. 15 
 - On which agricultural products does Australia  apply the highest tariffs and how high are 
they?  
 
WTO Secretariat's Report, page 77, para.17  
- Why does Australia apply export restricti ons on some of its agricultural products? 
 
- On which products do these restrictions apply?  
 
- Are these measures applied on a permanent basis or temporally?  
 
WTO Secretariat's Report, page 78, para. 21 
 
- Could Australia inform about the number of farmers that have used the farm help re-
establishment grant (FHRG) and the amount of money that has been paid out?  
 (5) S
ERVICES  
 
(ii) Commitments under the General Agreement on Trade in Services 
 
WTO Secretariat's Report, page 90, para. 72 
 In the report it is mentioned that in Australia's   existing GATS commitments "postal/courier" services 
are not yet covered.  - Could Australia provide an update on the curre nt legislation on posta l/courier services in 
Australia? 
 
(iv) Financial services 
 
WTO Secretariat's Report, page 93, para. 84 
 The revised prudential standards and guidance notes ar e applicable to all aut horized deposit taking 
institutions (ADIs) since 1 July 2006. 
 
- In this respect, could Australia elaborate on the major changes relevant for foreign service 
suppliers?  WT/TPR/M/178/Add.1 
 Page 19 
 
 
   
WTO Secretariat's Report, page 94, para. 90 
 
As stated in the report, APRA is strengthening  its prudential requirements for general insurance 
companies with a view to providing a clearer pi cture of reinsurance contracts, including annual 
disclosure requirements, business plans and prior approval requirements.  
 - In this respect, could Australia inform about  the recent Australian pr actice associated with 
application of such requirements? Could Austra lia clarify whether there is a difference in 
treatment between domestic and foreign investor s and between foreign investors and investors 
from the US?  
 
(v) Communications 
 
WTO Secretariat's Report, page 95, para. 93 
 It is stated that foreign investment in the banking sector are subject to a 15% shareholding 
requirement, although the Treasury may approve a higher percentage on "national interest" grounds. 
 
- Could Australia elaborate on the procedure and the practice applied in this respect?  
 
- Could Australia indicate the number of a pplications granted or refused so far? 
 
- Could Australia confirm whether foreign investors from the US also fall under this 
requirement?  
PREGUNTAS DE CHILE
 
 
III.  POLÍTICAS Y PRÁCTICAS COMERCIALES POR MEDIDAS  2) vii) Normas y otras prescripciones técnicas  Párrafo 39, Página 51 
Respecto a las normas reglamentarias, ¿los interesados  en acceder al contenido de sus disposiciones 
deben adquirir la norma en “Standards Australia”? 
 
Párrafo 42,  Página 53   
¿Dónde se efectúa el control de lo productos que  deben contar con una certificación obligatoria?  
¿Aduanas ejerce algún control? 
 
Párrafo 47, Página 46 
¿Dispone Australia de legislación aplicable (inc luida sanciones) para aquellos organismos de 
certificación o laboratorios localizados en Australia, que incumplen sus obligaciones respecto de productos que serán enviados a terceros mercados  en los cuales las pruebas y certificaciones son 
aceptadas en virtud de Acuerdos  de Reconocimiento Mutuo?  
 
4) v) Derechos de propiedad intelectual 
 
In paragraph 131 Australia states that “innovation pa tent, intends to stimulate innovation in SMEs by 
providing them with easier access to, but a shorte r term of, protection for inventions”.   WT/TPR/M/178/Add.1 
Page 20  
 
  a) Please explain if invention patent’s require ments are different form standard patents 
requirements. If the answer is yes, please provide main elements to be considered when granting 
protection to these patents.   b) Could you explain how an innovation patent gr ants an easier access to protection for SMEs 
inventions?   
 In Paragraph 133 “defensive trade marks” are men tioned as an special category of signs to be 
registered in Australia. In this regard:  
a) Please provide requirements to be complied for filling an application. 
 b) Is there any special rule related to the use of defensive trade marks?      c) Do general grounds for annulment apply for de fensive trade marks? Are there special grounds 
for its annulment? 
 According to Paragraph 136, geographical indica tions are protected through the Trade Marks Act 
1995, as certification trade marks; and through th e Australian Wine and Brandy Corporation Act 
1980, which establishes a "Register of Protected  Names" for the protection of geographical 
indications of Australian and foreign wines.   
 
a) Could a foreign GI, non registered in Australia as a certification trademark or a protected 
name, be protected through the Trade Practices  Act 1974? What conditio ns should be met? 
 b) Could a foreign GI for wine be concurren tly protected as a certification trademark and as a 
protected name in Australia? 
 c) Once a GI for wine is registered as a protect ed name, what kind of the protection is granted 
according to the Wine and Brandy Corpora tion Act 1980? Does it include the same rights 
granted to a certification trade mark?  
 
d) Is the enforcement system for GI’s registered  as a certification trade mark the same of a GI 
registered as a protected name? If is not, please explain differences between them. In case of infractions, what are their civil and criminal actions? 
 According to Paragraph 142, para llel importation is explicitly forbi dden for films (DVDs). Could you 
explain the rationale for this restriction?  
 
Otros temas 
 
Australia ha firmado acuerdos de lib re comercio con Tailandi a, Singapur y Estados Unidos. Sólo en el 
acuerdo con Estados Unidos el tema ambiental se tr ató en forma específica al incluirse un Capítulo 
sobre Medio Ambiente y negociar se, posteriormente, una Declarac ión Conjunta sobre Cooperación 
Ambiental.   En las negociaciones en curso entre ASEAN, Aust ralia y Nueva Zelanda, entendemos que este último 
país favorecería la incorporación del tema ambien tal en ellas, a lo que Australia se opondría.  
 
Existe interés en conocer la posici ón de Australia sobre estas materias y las razones que la sustentan.  
   WT/TPR/M/178/Add.1 
 Page 21 
 
 
  PREGUNTAS DE ARGENTINA  
 II. EL RÉGIMEN DE POLÍTICA COMERCIAL: MARCO GENERAL Y OBJETIVOS 4) Leyes y reglamentos comerciales  
Pregunta 1
 
 
En el párrafo 10 (página 21) del Informe de la  Secretaría se señala que el número de nuevos 
reglamentos ha aumentado sustancialmente en los últimos años, lo cual generó preocupación en 
Australia, al considerarse que se estaba sobrepasan do la capacidad del Parlamento de examinarlos 
adecuadamente y que su cumplimiento era una carga para las empresas. En respuesta a esta 
preocupación, el Gobierno creó el 12 de octubr e de 2005 un grupo de trabajo (el Grupo de Trabajo 
Banks) para abordar estas cuestiones. Dicho Grupo efectuó una serie de recomendaciones y estableció un acuerdo para una ventanilla única para la exportación de trigo. 
 
¿Podría Australia brindar detalles acerca del acuer do de una ventanilla única para la exportación de 
trigo recomendado por el Grupo de Trabajo Banks?  
III. POLITICAS Y PRACTICAS COMERCIALES, POR MEDIDAS 
 2) Medidas que afectan directamente las importaciones 
b) Reglamentos sanitarios y fitosanitarios 
 Cambios de políticas recientes (Informe de  la Secretaría, párrafo 53,página 57) 
 Pregunta 2
 
 ¿Podría Australia informar si ha procedido efectivamente a la instrumentación del nuevo 
procedimiento de análisis de ri esgo de importación previsto pa ra comienzos de 2007? Al mismo 
tiempo, a pesar del escaso tiempo tr anscurrido, es posible evaluar de alguna manera los beneficios que 
el nuevo procedimiento aporta?  3) Medidas que afectan directamente a las exportaciones iii) Comercio de Estado  Pregunta 3
 
 
En el párrafo 76 (páginas 65/66 y Cuadro III.5)el Info rme de la Secretaría se refiere a las  Empresas 
comerciales del Estado dedicadas a la exportación. ¿Podría Australia brindar información detallada 
acerca de la reglamentación, funcionamiento y par ticipación en el comercio de exportación de las 
Empresas comerciales del Estado?  iv) Asistencia a la exportación 
e) Financiación, garantía y seguros de export ación (Informe de la Secretaría, párrafo 87, 
página 69) 
 Pregunta 4
 
 
¿Podría Australia informar si concede servicios de  financiación o garantías de crédito a favor de 
exportadores agropecuarios? Si esto es así, podría i ndicar las condiciones de financiación y los rubros 
beneficiados en el período 2002-2006?  WT/TPR/M/178/Add.1 
Page 22  
 
  PREGUNTAS DE ARGENTINA (ADICIONALES)
 
 WT/TPR/S/178, INFORME DE LA SECRETARIA  II: RÉGIMEN DE POLÍTICA COMERCIAL: MARCO GENERAL Y OBJETIVOS. 
 
4) Leyes y reglamentos comerciales  Párrafo 10, página 20:  
 ¿Podría Australia informar las razones por las cual es se ha producido un incremento en el número de 
reglamentos? ¿Podría indicar en qué esferas se  ha producido mayormente ese aumento? ¿Podría 
indicar cuáles han sido, si las hubiera, las princi pales determinaciones del Grupo de Trabajo y si éstas 
ya han comenzado a implementarse?  7) Régimen de inversiones extranjeras  i) Visión general  Párrafo 35, página 29:  
 ¿Podría Australia informarnos cuándo una pr opuesta es contraria al interés nacional? 
 
Párrafo 36, página 29: 
 
¿Podría Australia indicarnos cuántos proyectos de  inversión estratégica han sido aprobados en el 
período objeto de examen y cuántos de ellos han sido aprobados en carácter de “beneficiosos para las 
regiones australianas”? 
 
III: POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS.   2) Medidas que afectan directamente a las importaciones  
 
ii) Aranceles - Concesiones arancelarias  Párrafo 21, página 42:   
¿Podría Australia brindar mayor información acerca de  cuál es el procedimiento y los requisitos que 
debe cumplir un importador para acogerse al Sistema Australiano de Concesiones Arancelarias cuando desea importar una mercadería que no posee equivalente nacional? 
 
iii) Otros gravámenes que afectan a las importaciones  
a) Impuestos indirectos 
 Párrafo 25, página 44:   
¿Podría Australia informar las razones sobre las que se basa el impuesto sobre bienes y servicios aplicable a las importaciones (GST) y ahondar acerca  de cuáles son las excepciones a su aplicación? 
¿Podría brindar mayor información sobre las raz ones de la aplicación del impuesto denominado WET 
(Impuesto de Equiparación de Vinos) y la base a través de la cual se determina la tasa? 
  WT/TPR/M/178/Add.1 
 Page 23 
 
 
  iv) Valoración en aduana y normas de origen 
 a) Valoración en Aduana  Párrafo 28, página 46: 
 ¿Podría Australia proporcionar estadísticas acerca de la proporción en que fueron utilizados los 
diferentes métodos de valoración en Aduana en este período?  
v) Prohibiciones y restricciones a la importación y licencias de importación 
 
Cuadro III. 4, página 47:  
¿Podría Australia informarnos cuáles son  las restri cciones a las que se hace referencia en este cuadro?   
 
viii) Contratación pública   
 a) Procedimientos obligatorios de contratación  Párrafo 64, página 61: 
 ¿Podría Australia indicarnos cuáles son las normas específicas a las que se hace referencia en este 
párrafo?¿Podría brindar estadísticas acerca de los dife rentes métodos de contratación por origen de los 
proveedores y valor de los contratos? 
QUESTIONS FROM THAILAND
 
 
WTO Secretariat Report (WT/TPR/S/178) 
 
II TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
(6) T RADE AGREEMENTS AND ARRANGEMENTS  
(ii) Preferential and regional agreements  
Para 29: The Secretariat Report states that TAFTA tari ffs on the remaining 239 tariff items of apparel 
and certain finished textiles are currently at 17.5%
.  We understand that  the current rate should be 12.5% .  
Could Australia please clarify this discrepancy? 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) I NTRODUCTION  
 
Para 3: Please clarify in detail the steps mentioned in  the Secretariat Report that Australia has taken to 
improve its import risk analyses in order to make th e process more transparent, efficient and timely.  
If possible, please describe other steps Australia pl ans to take to further improve the process. 
 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariffs  
Para 19: The Secretariat Report states that Australia has a number of tariff assistance schemes (duty 
forgone) for local industry. Does Australia have any conditions tied to these schemes that eligible 
local industry must follow such as requirement(s) for production and/or export? 
 WT/TPR/M/178/Add.1 
Page 24  
 
  (4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(ii) Production assistance  
Para 103: The Secretariat Report states that assistance to agriculture includes statutory marketing 
arrangements;  for example, the Productivity Commi ssion estimated that $A 3 million was provided in 
2004/05 to rice marketing, and the domestic price of rice was maintained at higher levels than would 
otherwise prevail.  Could Australia please elaborat e in detail how the $A 3 million provided in 2004/05 
for rice marketing was utilized and also provide exam ples of activities/measures used.  In addition, was 
the $A 3 million used to maintain the aforementioned high domestic price for rice? 
 IV. TRADE POLICIES BY SECTOR (2) A
GRICULTURE , LIVESTOCK , FORESTRY , AND FISHERIES  
(ii) Regulatory framework  
Para 9: Please explain the roles and responsibilities of the state trading arrangements for the export of 
rice, dairy and sugar. Do the relevant state tr ading enterprises have monopoly power in trading these 
products?  If private participation in exportation is a llowed, what is the proportion in market share of the 
relevant state trading enterprise and of the private entity?   - How do Australian state trading enterprises he lp promote the competitiveness of Australian 
farmers?  
 - Please provide more information regarding the tr ading system processes for rice, dairy and sugar 
in Australia (from farming processes to exportation). 
 
(iii) Assistance 
 
Para 11: The Secretariat Report states that vari ous methods have been used to measure domestic 
support to agriculture.  Could Australia please e xplain in detail how the subsidy programmes are 
operated for each eligible product and the impact on  Australian individual farmers and the relevant 
Australian agriculture sector as a whole?  (v) Reforms in selected sectors  Dairy  
Para 19: The Secretariat Report points out that two kinds of adjustment assistance have been provided 
for Australia’s dairy sector, namely (1) prior to th e year 2000, a combination of price and regulatory 
controls and (2) since the year 2000, a federal Dair y Industry Adjustment Package (DIAP).  What are 
the key differences between these two kinds of assistance?  
 
Paras 20 and 21: Please provide more details regarding the federal DIAP as follows: 
 
- What are the requirements or guidelines that dair y producers with an existing dairy structural 
adjustment programme (DSAP) entitlement must  or should follow to receive assistance under 
the supplementary dairy assistance programme (SDA)?  
 
- Under the DSAP, direct assistance of $A 1.63 billion is available for eligible dairy farmers 
until 2008.  Please clarify how this direct assist ance is allocated to individual farmers? Is 
there any specific criteria? How much does an individual farmer receive each year? 
 - What are the additional benefits that produ cers with DSAP entitlement who also receive 
assistance under the SDA gain? Is the entire amount of $A 120 million that is allocated to  WT/TPR/M/178/Add.1 
 Page 25 
 
 
  farmers who have been severely affected by  deregulation also allocated to producers who 
apply for assistance under the SDA? 
 - What are the criteria for dairy producers w ith DSAP/SDA entitlement to apply for assistance 
under the exit programme (DEP) and farm  help re-establishment grant (FHRG)? 
 
- Does the Australian government have any mon itoring and assessment mechanisms in place to 
evaluate the Australian dairy industry afte r producers exit the industry? Please elaborate. 
 - Have Australian dairy farmers become more competitive as a result of the assistance 
programmes?  How so? 
 
 Additional Questions
 
 
Sanitary and Phytosanitary Measures (SPS) 
 
1. Measures on the importation of  prawns and prawn products 
 Australia’s Revised Draft Generic Import Risk Anal ysis (IRA) Report for Prawns and Prawn Products 
has been circulated to all inter ested parties for comments since November 2006.  Thailand is of the 
view that the newly proposed quarantine and c ontrol measures on the importation of Prawns and 
Prawn Products into Australia under the above Re vised Draft Report will create unnecessary burdens 
on foreign trade.  We hope that the Australian G overnment will carefully review the newly proposed 
IRA measures to avoid the creation of such burdens.  
 
2. Import Risk Analyses on Thai products 
 
Could Australia please provide the latest progress of the pest risk analyses on chicken meat and other 
poultries, citrus (pomelo-pilled), pine apple (pilled) and mango conducted by the Australian 
Quarantine Inspection Service (AQIS)? 
QUESTIONS BY JAPAN
 
 
Report by the Secretariat (WT/TPR/S/178) 
 
I. ECONOMIC ENVIRONMENT (4) Main structural reform issues 
(ii) Labour-market reforms 
 Question 1 (paragraph 19, page 8)  
 
According to the Secretariat report, the Work  Choices Act was implemented in March 2006 to 
increase labour market flexibility. 
 
Please explain impact of the Act on la bour-management relations hereafter. 
 WT/TPR/M/178/Add.1 
Page 26  
 
  (5) Development in trade and foreign direct investment 
(iii) Foreign direct investment  
Question 2 (paragraph 28, page 12)  
 
The Secretariat report analyzes that Australia’s recent regional trade agreements, which include 
investment-specific provisions, have not incr eased investment from its partner countries. 
 Please indicate Australia’s views on the analysis me ntioned above, concretely the impact of such 
regional trade agreements on investment.   
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
(6) Trade agreements and arrangements 
(ii) Preferential and regional agreements 
(b) Regional trade agreements (RTAs) 
 Question 3 (paragraph 20, page 20)  
 
According to the document “Submission on Regiona l Trade Agreements”(13 May 2005) presented by 
Australia to the WTO, Australia proposed a definition of ‘substantially all trade’ to mean eliminating 
all duties on a minimum of 95 percent of tariff lines at  six digit level of the Harmonized System(HS).  
 Could Australia explain why this benchmark has been made, and how it will be carried out in 
Australia’s future FTA negotiations? 
 
Question 4 (paragraph 31, page 23)  
 (1) To what extent (percentage) will the duties be  eliminated on a tariff line / trade value basis 
within ten years after the entry into force of  the Australia-United States Free Trade Agreement 
(AUSFTA)? Could Australia provide the percentage  two ways (export from Australia and import to 
Australia)? For which tariff lines will duties remain within ten years after its  entry into force?  
 
(2) Please indicate why sugar was the only item exempted from tariff elimination in AUSFTA. 
 
Question 5 (paragraph 33, page 24)  
 
What are Australia’s basic positions for negotiating the investment chapter in the bilateral trade 
agreement with China, and what progress has been made  so far, especially with regard to investment 
liberalization?  (7) Foreign investment regime (i) Overview  
Question 6 (paragraph 35-36, page 24-25)  
 
(1) In Australia, a foreign investment proposal of  more than $A 50 million needs to be approved 
in advance by the Foreign Investment Review Boar d (FIRB). Japan would like to request Australia to 
raise such threshold value. 
 (2) Japan understands that if FIRB considers a foreign investment proposal is contrary to the national interest, the proposal may be rejected. Ho wever, the criteria of whether the proposal is 
contrary to the national interest are not necessarily  self-explanatory. Japan would like to ask Australia 
for clarification and details on criteria.  WT/TPR/M/178/Add.1 
 Page 27 
 
 
  III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) Measures directly affecting Imports (ii) Tariffs 
(a) Tariff structure 
 
Question 7 (paragraph 13, page 31)  
 
Despite the result of unilateral reductions in 2005 in tariffs including passenger motor vehicles  
(PMVs), their rates are still considerably higher than  the average applied MFN rate which is 3.8% in 
2006. Current applied tariffs for PMVs, component s and replacement parts are scheduled to be 
reduced from 10% to 5% only in 2010.  
 
(1) Could Australia provide in formation about the staging of  tariff reduction until 2010?  
 
(2) Japan would like to know Australia's persp ective of further reduction after 2010. Japan also 
would like to know whether the authorities will co ntinue to make efforts until these tariffs reach 
approximate to the average applied tariffs. 
 
Question 8 (paragraph 16, page 32) 
 The compound rate of 10% (15% in 2002) plus AUD 12, 000 per unit, which are applied to eight items 
of used or second-hand vehicles. The average AV E for these items was 206.8% in 2006. Nonetheless, 
the authorities state that the tariff has not been applied since the commencement of a registered 
automotive workshop scheme (RAWS) in 2002. 
 (1) Could Australia explain the objective of  implementing the RAWS and how the scheme 
operates in practice?  
 (2) How long will the RAWS be in force? Does it continue after tariff reduction of these items? 
 
(iii) Other charges affecting imports 
(a) Indirect taxes 
 Question 9 (paragraph 25, page 37) 
 
The luxury car tax (LCT) is levied on motor vehicles (except motor cycles or similar vehicles) at the rate of 25% on the goods and services tax (GST )-exclusive value that exceeds the threshold 
determined annually by the Commissioner of Taxati on. In 2004/2005, 97% of the LCT was collected 
on imported vehicles.  
Does Australia have a plan to adjust the LCT sy stem so that imported vehicles are treated less 
discriminatively?  (vii) Standards and other technical requirements 
(a) Standards, testing and certification 
 
Question 10 (paragraph 47, page 46)  
 
Paragraph 47 refers to Government al MRAs between Australia and ot her countries. Regarding this, it 
is written “The Committee notes that the mutual introduction of cross-border designation systems in 
equivalent fields by governments can be a cost -effective agreement.” in paragraph 39 of the WTO 
document (G/TBT/19) “FOURTH TRIENNIAL REVIEW OF THE OPERATION AND WT/TPR/M/178/Add.1 
Page 28  
 
  IMPLEMENTATION OF THE AGREEMENT ON TECHNICAL BARRIERS TO TRADE UNDER 
ARTICLE 15.4,” completed in Nov. 2006.  
Article 6.4 of the WTO TBT Agreement stipulates that “Members are encouraged to permit 
participation of conformity assessment bodies located  in the territories of other Members in their 
conformity assessment procedures under conditions no less favourable than those accorded to bodies 
located within their territory or the territory of any other country.” 
 
And it is also written, “The Committee renews its encouragement of Members to allow the 
participation of conformity assessment bodies located  in the territory of other Members in their 
conformity assessment procedures, on a non-discriminatory basis, as stated in Article 6.4.” in 
paragraph 36 of the WTO document “FOURTH TRIENNIAL REVIEW OF THE OPERATION AND 
IMPLEMENTATION OF THE AGREEMENT ON TECHNICAL BARRIERS TO TRADE UNDER ARTICLE 15.4.” 
 
If Australia adopts the cross-border designation system, the adoption will contribute to trade 
facilitation for foreign manufacturers willing to export to Australia. At the same time, this will enable 
Australian companies investing in countries outside Au stralia to acquire certifications of products by 
CABs designated under Australian laws in the co untries outside Australia, where the production cost 
is low, and quickly forward them to the Australian  market with lower cost for certifications. It is 
beneficial for Australian companie s because investment in such co untries where the production cost is 
low can be promoted. In this way, it is beneficial not only for trade partners of Australia but also for 
Australia itself. 
 
Are there cross-border designation systems where Australian regulatory authorities can directly 
designate Conformity Assessment Bodies (CABs) in foreign countries based on Australian law? If 
there are such cross-border designation systems, Japan  requests Australia to inform Japan of the name 
of the law. If there is no such cross-border d esignation system, Japan would like to know whether 
Australia has legal provisions that make it im possible to designate CABs outside Australia. 
Furthermore, what is the logic or background behind those provisions?  (2) Measures directly affecting Imports (viii) Government procurement  
Question 11 (paragraph 61, page 50)  
 
Could Australia explain why it does not participate in the GPA? What is the difference between the 
GPA and the Australian regime on government procurement? 
 
(ix) Local-content requirements 
 
Question 12 (paragraph 71, page 52)   
According to the notes of paragraph 71, page 52, of the Secretariat report, Australia keeps local-
content requirements in several sectors.  
 Please indicate how these measures are consistent with the WTO Treaties such as Article II of TRIMs, 
Article III of GATT and Article XVII of GATS. 
  WT/TPR/M/178/Add.1 
 Page 29 
 
 
  (3) Measures directly affecting Exports 
(iii) State trading  
Question 13 (paragraph 76, page 54 & par agraph 24, page 79 of Section IV)  
 
(1) AWB (Australia Wheat Board) is granted exclusive rights to purchase and sell wheat. From 
the buyers’ side, the process of price-setting and di scretionary appears opaque. Japan is of the view 
that such state trading is problematic in light of avoiding market distortion. Please explain current discussions and future prospects on single-desk arra ngement which, Japan understands is now under 
review in Australia.  (2) When a foreign agricultural investor cultivat es and harvests wheat in Australia and tries to 
export it to its home country what restrictions could apply? 
 
(4) Measures affecting production and trade 
(iii) Competition and consumer policy 
 Question 14 (paragraph 109-114, page 64-65)  
 
We understand that Australia is currently preparing th e next review of the Trade Practices Act (TPA), 
such as introduction of criminal sanctions for cartel activity. Could Australia explain the contents of 
the next review, the progress of the deliber ation and the prospects for its adoption? 
 
Question 15 (paragraph 111, page 65, paragraph 116-118, page 66 & paragraph 37, page81 and 
paragraph 41, page82 of Section IV)  
 
Could Australia explain how the third party access to essential infrastructure facilities, i.e. electricity 
networks, telecommunication networks and facilities,  natural gas pipelines, and water resources, is 
secured and allocated? 
 
Question 16 (paragraph 119, page 66)  
 Concerning the report on cooperation arrangements between the ACCC (Australian Competition and 
Consumer Commission) and other foreign agencies  in paragraph 119, Japan understands that the 
ACCC has cooperation agreements on anticompet itive activities with corre sponding agencies of 
several countries such as United States and New Zealand. 
 
Could Australia explain the contents of such c ooperation agreements and how they are working now? 
 
(v) Intellectual property rights 
 
Question 17 (paragraph 144, page 72)  
 (1) The Secretariat report states that for copyright offences, the maximum penalty is a fine of not 
more than AUD 93,500 together with imprisonment of  not more than five years. The report also 
indicates that for trade mark offences, penalties may take the form of fines of up to AUD 55,000, 
and/or imprisonment for up to two years for individuals; monetary penalties for a company can be up to five times the penalty for individuals.  
In case Australia has penalties for the offence of inte llectual property rights other than copyright and 
trademark, particularly patent and design, Japan would like to know further on maximum fines and 
imprisonment and whether fines and im prisonment can be imposed together. 
 WT/TPR/M/178/Add.1 
Page 30  
 
  (2) Japan understands that upon acceptance of a no tice of objection lodged by the IPR owner, 
customs may take measures to seize and hold impor ted goods infringing copyright and trademark at 
the border. Japan would like to know whether cust oms may take measures to seize and hold imported 
goods infringing intellectual property rights other than copyright and trademark.  IV. TRADE POLICIES BY SECTOR (2) Agriculture, livestock, forestry and fisheries 
(i) Overview 
 Question 18 (paragraph 6-8, page 74)  
 
(1) Water shortage caused by drought is a seri ous problem, which is also a menace for the 
agriculture industry. How does the Australian government  tackle it in both short term and long term? 
Please show specific evaluation by Australia of the impact of the drought on the Australian economy, in particular on the export of farm  products, including dairy products. 
 
(2) In particular, does Australia consider current  practice in agricultural production to be a cause 
of this issue? What are the measures which Au stralia is taking to promote sustainable and 
environmentally-friendly agriculture?  (3) Australia bans beef import from countries that have had past cases of BSE. When will 
Australia remove this ban? 
 
(3) Mining, electricity and water 
(i) Mining 
 Question 19 (paragraph 34-35, page 81)  
 
(1) Could Australia explain rules and regulations  concerning approval and control of foreign 
investments in resources and energy sectors? Are there local contents and other performance 
requirements imposed on foreign investors by local governments?  (2) Is there a legal framework which allows the central government to intervene in the activities 
of local governments concerning mineral and energy development? When doubts or problems arise, 
concerning the rights of mining and development of projects, is it the state government to which the 
Japanese government or Japanese companies should appeal?   (3) Can foreign investors, engaging in developmen t, sales, exportation a nd other related activities 
concerning mineral resources and energy, enjoy National Treatments? If National Treatments are not 
fully accorded to foreign investors, could Australia  explain to what extent and in what activities 
National Treatments are given to foreign investors, and clarify the areas in which Australian companies are given better treatment than foreign investors?  
(4) When the Australian authorities make a judg ment on compatibility of a foreign investment 
with the national interest, do they guarantee an  opportunity of hearing for foreign investors 
beforehand?   (5) In recent years, the demand for mineral r esources in Asian countries such as China has grown 
rapidly. What are Australia’s policies on explo itation and supply energy resources to meet the 
growing demand in the ASEAN region? 
 (6) Australia and China signed a Nuclear Tr ansfer Agreement and a Nuclear Cooperation 
Agreement in 2006. How does the Australian govern ment secure peaceful uses of uranium for the  WT/TPR/M/178/Add.1 
 Page 31 
 
 
  sake of the securities of the Asia Pacific re gion? Some state governments prohibit uranium 
exploitation now. How are the policies on uranium (exploitation and export) reviewed?     
(ii) Electricity 
 
Question 20 (paragraph 40, page 82) 
 (1) To what extent does the central governme nt engage in the establishment and current 
management of NEMMCO?   (2) According to paragraph 40, page 82 of the S ecretariat report, the AER is required to monitor 
and enforce compliance by NEMMCO with its oblig ations under the National Electricity Law and 
Rules, and the NEMMCO functions as the operator and administrator of the wholesale electricity 
market. What is the relationship between the AER and the central government, regarding the 
regulations against NEMMCO? 
 
(4) Manufacturing 
(ii) Automotive 
 Question 21 (paragraph 55, page 86)  
 
Could Australia explain the prospect for tariff re duction on automobiles, including components and 
parts?   
(5) Services 
(i) Overview 
 Question 22 (paragraph 69-71, page 89)  
 
(1) Construction company licenses  
Construction companies must obtain different busin ess licenses in each state to undertake contracts. 
The coverage of such licenses and their requirements fo r approval vary from state to state. Most states 
further require construction companies to submit fina ncial statements to be audited by an Australian 
accounting firm. These procedures are costly, cumbersome and time-consuming for companies. Could 
Australia explain the rationale for maintaining this system? 
 
(2) Movement of natural persons  Regarding the description “Australia submitted a revised services offer in May 2005, which proposes 
improvements to its existing schedule of commitmen ts in areas such as mode 4”, Japan would like 
Australia to explain further the improvement of m easures relating to the movement of natural persons 
from the aspect of domestic regulations.  (3) Legal advisory services 
 
With regard to Patent Attorney Services, what is the precise definition of “ordinarily resident”? Why 
is this requirement not scheduled in the Australian WTO services offer? By the same token, why is 
the citizenship requirement for a migration agent no t scheduled in the offer? Or is the migration 
advice services not included in legal services? Wh at is the rationale fo r the ban on partnership 
between foreign and local lawyers in SA? Is th e harmonization process among states evolving? More 
specifically, is a qualification acquired in one state recognized in other states? 
 WT/TPR/M/178/Add.1 
Page 32  
 
  (4) Accounting, auditing and book-keeping services 
 Why are auditors and liquidators limited to natural persons? What is the rationale for the requirement 
that at least one equity partner in a firm must be a permanent resident?  
 (5) Research and development services 
 
Australia makes commitment in R&D services only on social science and humanities. What is the 
rationale for the limitation?  
 (6) Packaging services 
 
Japan regards packaging services as crucial to manuf acturing sectors. In this regard, Japan would be 
grateful if Australia would provide informa tion on possible limitations in this sub-sector. 
 
(7) Media  
In this sector, all investment proposals by forei gn persons require prior approval. Please provide the 
rationale for sustaining the regulation and rationale.  
(8) Distribution Services 
 (i) There is a restriction on commission agents’ services on the sales of food products and wholesale trade services of agricultural products. C ould Australia explain the rationales for such 
restrictions? 
 (ii) Is there any restriction for foreign di stributors of automobiles to provide services? 
 
(9) Education services 
 Japan notes further, that the ESOS Act serves to impose residency requirement on the providers of 
education and training services to overseas students. Please explain whether Australia is prepared to 
relax these limitations.   
 
(10) Insurance and insurance-related services 
 
With regard to the life insurance services, why is approval of non-resident life insurers restricted 
to subsidiaries? Please provide details on the cont ract of compulsory insurance for third party 
motor vehicle accident? Is there any plan to pe rmit foreign private insurance companies to offer 
the following areas of insurance? 
 
- compulsory third party motor vehicle accident  
- workers compensation insurance 
 (11) Recreational, cultural and sporting services 
 
Australia has reserved the right to adopt or mainta in any measure with respect to the creative arts, 
cultural heritage and other cultural industries including, inter alia,  entertainment services, libraries 
and archives. Japan would like to have a more detailed explanation and/ or clarification on the 
reserved rights.     WT/TPR/M/178/Add.1 
 Page 33 
 
 
  (v) Communications 
(a) Telecommunications  
Question 23 (paragraph 92, page 94)  
 
Please indicate the number of telecommunications carriers and service providers, and the number of 
foreign telecommunications carriers and service pr oviders?  Also, Japan would like to know the 
results of Australia’s analysis of the openness of its  telecommunications markets compared to that of 
other major markets. 
 
Question 24 (paragraph 92-97, page 94-96)  
 
(1) Could Australia elaborate on the conditions  of a license to foreign telecommunications 
service providers? Are the conditions different between domestic and fo reign providers? In what areas 
is national treatment not accorded to foreign providers?  
(2) Regarding Mode 3, Japan notes that there are restrictions on: (i) the foreign ownership of 
Telstra, more specifically, the limitation of the ma ximum aggregate foreign ownership to 17.5 percent 
of all shares (35 per cent of the privately held shares, i.e. those not owned by the Australian 
Government) and to 5 per cent for individual or associated groups of foreign investors; and (ii) the 
form of the legal entity permitted to hold a new carrier license. Japan would be grateful if Australia could provide Japan with rationale for these limi tations on foreign ownership and governmental 
involvement and the future prospect of po tential elimination or relaxation thereof. 
 
(3) Services covered by the Broadcasting Serv ices Act 1992 are excluded from Australia’s GATS 
commitments for telecommunications. Please clarify the exact scope of cove rage under the Act so 
Japan can better understand the regulation concerning the participation of foreign persons or entities. 
 
(4) In the audio-visual services sector, measures for which foreign provide rs do not enjoy equal 
treatment include: 
 
- local content quotas for television; - subsidies for Australian firms; and 
- preferential film co-production arrangements fo r film and television pr oducts with selected 
countries. 
 
Is there a plan to relax the regulation? If not, could Australia explain the reasons? 
 (5) If there was a pay-cable TV channel speciali zed for transmitting animation, would Australia 
impose the same local content quotas?  
 
Question 25 (paragraph 94, page 95)  
 (1) In Australia, digital services are included in  the universal service as DDS. Could Australia 
provide the rationale for and the details of this system?  
(2) Suppliers are required to provide “Special DDSO” as DDSO  in rural areas, and if a supplier 
cannot fulfill this obligation, alternative measures can be taken. Japan would like to know further 
information on what alternative measures actually  are, and if such measures include wireless 
communications technologies.  
 WT/TPR/M/178/Add.1 
Page 34  
 
  Question 26 (paragraph 95, page 95)  
 
(1) Japan welcomes Australia’s ongoing effort to reduce the Government shareholdings of 
Telstra; Japan would however like to know what pl ans are in the works to  sell off the remaining 
shares. Japan also wishes to k now whether Australia recognizes the fact that foreign investment 
restrictions on Telstra are still in place. Japan would like to know what plan has been put in place and 
what progress has been made concerning rela xation and removal of such restrictions. 
 (2) Please provide the reasons why foreign investment  restriction in Telstra is limited to up to 
35% in aggregate and up to 5% individually. 
 (3) Please explain the reasons and provide furthe r information on which Ministry owns Telstra 
stock and which Ministry is in charge of such stock holdings.  (4) Japan understands that there are nationality re quirements for the chairperson and the majority 
of the board directors under section 8BT, section 8B U, and section 36 of the Telstra Corporation Act 
1991. Are such laws and regulations  still relevant? If so, what reservations are correspondent to such 
restrictions on Australia’s GATS revise d offer and schedule of commitment 
 
Question 27 (paragraph 96, page 95 & paragraph 117, page 66 of Section III)  
 
It is indicated in the Secretariat Report that ope rational separation of Tels tra’s retail and wholesale 
and network business areas has been in full effect since 1 December 2006 under the 
Telecommunications Legislation Amendment (Compe tition and Consumer Issues) Act 2005, and that 
appropriate measures which prevent Telstra from using its dominant position in an anti-competitive 
manner have been taken.  (1) Please provide further detailed information on domestic laws and regulations that prevent 
Telstra’s anti-competitive actions from the viewpoint  of consistency with the Competitive Safeguards 
stipulated in GATS Reference Paper. 
 
(2) What is the legal base of OSP (Operati on Separation Plan) which ensures operational 
separation of Telstra? Is it correct to assure ther e are no penalties imposed on Telstra when Telstra’s 
action run counter to OSP?  
(3) Please explain the reasons why OSP has b een approved by the DCITA which is not the 
regulating and licensing authority.  (4) It is said that OSP will be reviewed by  July 2009. Who will make a decision on the 
competition status and Telstra’s market domination?  
(5) Japan understands that an equal balance between wholesale business areas and retail business 
areas is the aim of the “notional contract”. Please provide further information on how its 
appropriateness of the “notional contract” itself is ensured. Also, are improvements orders issued by 
the regulatory body applied to the “notional contract”?  
(6) Is there a dominant supplier or suppliers  in the mobile market? If so, please provide 
information on rules for interconnec tions and on dominant regulations. 
 
Question 28 (paragraph 96, page 95)  
 Japan is of the opinion that sufficiently unbundled Te lstra’s local loops ensure further development of 
the broadband market in Australia.   WT/TPR/M/178/Add.1 
 Page 35 
 
 
   
(1) In August 2006, ACCC issued the final d ecision on Telstra’s ULLS (Unconditioned Local 
Loop Services) charges undertaking submitted by Tels tra which proposed uniform charges throughout 
the country. With respect to charges for unbund led local loops, please provide further detailed 
information on domestic laws and regulations to en sure “cot-oriented rates” stipulated in the GATS 
Reference Paper. In addition, Japan would like to  know what measures the Australian Government 
will take to ensure “cot-oriented rates” through future decisions.  (2) It is indicated in the Secretariat Report that Australia has introduced a price control 
arrangement and that this price control arrangement  covers not only local but also long-distance and 
international services. Does this mean that the long-distance and international service sectors are not 
sufficiently competitive?  (3) Japan understands that Telstra announced “Tel stra’s strategy for growth” in November 2005 
and that a plan for installation of FTTN is set out in  this strategy. Japan would like to know what plan 
has been put in place and what progress has been made concerning installation of FTTN. Please 
provide further information on whether the FTTN netw orks installed by Telstra will be opened to 
other operators or not. In addition, are the FTTN networks included in the scope of access 
obligations? If so, please explain the reasons for this.      (4) Please provide further detailed informati on on the “Speed Reach” which is the entity 
established for co-operative approach to build FTTN ne tworks proposed by Telstra competitors. Also 
please let Japan know whether Telstra will join “Sp eed Reach” or not and whether “Speed Reach” 
will be obliged to install FTTN networks or not.  (5) The Secretariat Report states that the mark et share of broadband in Australia is 44%. 
However, considering that there are many case DSL subscribers to Telstra which provide services to 
other operators as wholesale services, we consider Telstra’s total DSL market share would be higher 
than 44%. If any survey has been conducted on  the share including wholesale services, could 
Australia provide Japan appropriate data? Japan would also like to know what is the common way 
when competitors provide DSL services in Austra lia, and whether co-location services of DSLAM in 
Telstra’s building are provided or not.  
 
(6) Japan anticipates progress in Australia’s competition policy, it is however reported in ITU 
reports that Australia is ranked 48th among all 75 countries under review with respect to broadband 
prices per 100kbit/s. Japan therefore considers that prices are still high. Japan would like information 
on what measures are being taken to lower the price of broadband services, if any. 
 
(7) Please provide information on the penetrati on rate of FTTH. Are the FTTH services provided 
commercially? And are there any other competitors in the market?  
(vi) Transport 
(a) Maritime services 
 Question 29 (paragraph 103, page 97)  
 
What is the rationale for the regulation requiring international liner cargo shipping operators to and 
from Australia to be represented by an Australian resi dent? Is there a plan to review the requirement? 
 
Question 30 (paragraph 105, page 97)  
 
In recent years, the demand for coal in Asian co untries has grown rapidly. Australian processing 
facilities, however, are not sufficient to respond to increasing demand. Demurrage has consequently WT/TPR/M/178/Add.1 
Page 36  
 
  become a serious problem, particularly in Newcastle, New South Wales – Australia’s largest coal 
shipping port. For suppliers, the increase of demurr age affects revenue, while delays in shipping 
schedules prove a burden for recipients. Overall, this  problem serves as an impediment to trade. What 
measures will the Australian Government take to solve this problem?  
QUESTIONS BY BRAZIL
 
 
I) The Australian Wheat Board (AWB) is one of the major “single desks” in the world, 
maintaining the monopoly of wheat exports. Brazil acknowledges the creation of the “Wheat Export 
Marketing Consultation Committee” as an important st ep towards a liberal mark et structure for wheat 
export. What is the focus of these consultations? Could the Australian dele gation provide additional 
information regarding the timeframe and e nvisaged scope of changes to the AWB?  
 II) Australia recognizes that it has “a conserva tive approach to quarantine”, although adopting 
scientific criteria for import risk analysis (IRA) . However, there are occasions in which Australian 
authorities seem to be more restrictive than woul d be required by strictly scientific criteria. In 
particular, there have been instances of shipments retained until “additional information”, unspecified 
in the Australian law and sanitary agreements. Does  the Australian government expect the revised 
IRA process referred in paragraph 53 of the Secretariat report to ensure transparency and predictability of import operations?    
QUESTIONS BY CANADA
 
 
Report by the Secretariat (WT/TPR/S/178)  
 Summary Observations. Section 2: Trade Policy Re gime: Framework and Objectives, page vii, 
paragraph 12. 
 The Secretariat report states that with respect to sanitary and phytosanitary (SPS) measures 
“according to the authorities, as international sta ndards do not exist in some areas, the share of 
national standards that are equivalent to in ternational standards remains at around 40%.” 
 1. In cases where international standards do exis t, could Australia please specify the percentage 
of its SPS related national standards that are not equivalent to international standards? 
 Part I. Economic Environment, Section 5: Developments in Trade and Foreign Direct Investment, (iii) Foreign Direct Investment, page 12, par agraph 28, and Part II. Trade Policy Regime: 
Framework and Objectives, Section 7: Foreign Investment Regime, (ii) Changes in the Policy Framework, page 25, paragraph 37.  
 
The Secretariat Report notes that “It seems that Au stralia's recent regional trade agreements (with 
Singapore, Thailand, and the United States), which in clude investment-specific provisions, have not 
increased investment from its partner countries.”  Th e Secretariat Report also notes that as a result of 
the Australia-U.S. Free Trade Agreement, Australia  continues to screen investment from the United 
States above certain thresholds, which are signi ficantly higher than for investment from other 
countries.  
 2. Could Australia please explain what is th e policy rationale for providing preferential 
treatment to US investors (or discriminating agai nst foreign investors from non-free trade agreement 
countries) with respect to the investment screening re gime in Australia, partic ularly when investment 
flows have not increased from FTA partner countries?  WT/TPR/M/178/Add.1 
 Page 37 
 
 
  3. Could Australia indicate when the Australian authorities intend to extend the higher  
investment screening thresholds to all WTO Members?  
 
Part III. Trade Policies and Practices by Measure, Section 2:  Measures Directly Affecting Imports, 
(vii) Standards and other technical requirements, (b) Sanitary and phytosanitary regulations, page 
48, paragraph 53. 
 
The Secretariat report describes recent policy chan ges to the import risk assessment process (IRA) 
designed to make IRAs more transparent, effi cient, timely and predictable. Canada commends 
Australia on these policy changes. 
 
4. Could Australia elaborate on whether or not it has in place, or plans to implement, a review 
mechanism to evaluate the effectiveness of the rece nt changes to the IRA process and determine their 
impacts on its transparency, efficien cy, timeliness and predictability? 
 Part III. Trade Policies and Practices by Measure, Section 2: Measures Directly Affecting Imports, 
(vii) Standards and other technical requirements, (b) Sanitary and phytosanitary regulations, page 48, paragraph 53. 
 
The Secretariat report states that under the new IRA process “a standard IRA will be completed 
within 24 months, and an expanded IRA (if there ar e significant differences in scientific opinion or 
significant biosecurity risk) within 30 months, of  an announced commencement date of the process.” 
 5. Given Australia’s strict appropriate level of protection (ALOP) (which is described on page 
46, paragraph 48 as “providing a high level of san itary and phytosanitary protections aimed at 
reducing risk to a very low level, but not zero”),  could Australia explain how it will determine what 
constitutes a significant biosecurity risk? 
 6. What situation, if any, could lead Austra lia to delay the announcement of a commencement 
date for a given IRA process? 
 
Additional Question 
 
On September 7, 2005, the Canadian Food Inspection Agency (CFIA) wrote to the Australian Government Department of Agriculture, Fisheries an d Forestry to request that Australia reassess and 
reconsider the risk and associated interim restricti ons imposed by Australia related to the detection of 
BSE in Canada which prohibit the importation of Ca nadian live cattle, beef and beef products.  In 
reassessing the risk, CFIA requested that full cons ideration be given to the amended BSE guidelines 
provided for in the International Terrestrial Animal Health Code of the Worl d Organization of Animal 
Health (OIE) which were supported by  Australia at the time of the adoption in May 2005.  CFIA has 
so far not received a response to its Septem ber 2005 letter.  Our High Commission has on several 
occasions been advised that consideration of our re quest is pending the outcome of Australia's review 
of its BSE import policy.  Our understanding is  that Australia's BSE import policy review's 
recommendations were considered by the Aust ralian Government in September 2005.   
  7. Canada would like to request an update  on the status of the BSE import policy 
recommendations which we understand were considered by the Austra lian Government in September 
2005 and an update on the status of Australia's re ply to CFIA's September 5, 2005 letter.  In 
particular, Canada would welcome a response as to wh en Australia would be prepared to remove its 
interim restrictions on Canadian live cattle, beef a nd beef products, in accordance with OIE standards. 
  WT/TPR/M/178/Add.1 
Page 38  
 
  Part III. Trade Policies and Practices by Measure, Section 2: Measures Directly Affecting Imports, 
(viii) Government Procurement, page 50, paragraph 62.  
 
8. Australia has implemented a high standard government procurement chapter in its free trade 
agreement with the United States that  includes procedural requirements that are of a similar standard 
to the revised WTO Agreement on Government Pr ocurement (GPA) text that has recently been 
negotiated (GPA/W/297, December 11,  2006).  Given its existing obliga tions under the U.S.-Australia 
Free Trade Agreement and the development of a ne w GPA text, has Australia considered moving 
forward with its accession to the GPA? 
 
Part III. Trade Policies and Practices by Measure, Section 4: Measures  Affecting Production and 
Trade, (v) Intellectual property rights, page 70, paragraph 132. 
 
Canada notes that according to the Secretariat Re port “[t]he IP Laws Amendment Act 2006, passed on 
27 September 2006, includes various amendments to  the Patent Act 1990, the Designs Act 2003, the 
Olympic Insignia Protection Act 1987, the Plant Breeder's Rights Act 1994, and the Trade Marks Act 
1995.”     9. Canada would be grateful if Australia c ould provide additional in formation regarding the 
amendments introduced as a result of the IP Laws Amendment Act of 2006.     Part IV. Trade Policies by Sector, Section 5: S ervices, (vi) Transport, (a) Maritime Services, page 
96, paragraph 103.  
 
The Secretariat Report mentions the Trade Practices Act 1974 in regards to Maritime transport. Australia announced in August 2006 that they woul d amend Part X of the Trade Practices Act 1974 
(dealing with anti-trust immunity for liner shipping conferences) to:  
 
- clarify its objectives; 
- remove discussion agreements from its scope;  - protect individual confidential service contracts between carriers and shippers; and  - introduce a range of penalties for breach es of its procedural provisions.  
However, no time-table was given in this announcement.  
 10. Does Australia have a time-table for the in troduction of amendments to remove Discussion 
Agreements from Part X of the Trade Practices Ac t 1974 and to protect individual confidential service 
contracts between carriers and shippers?  Report by the Government of Australia (WT/TPR/G/178)
 
 Part III. Trade Policy, Section (i):  Australia  and the WTO, Intellectual Property, page 7, 
paragraph 15  
11. Canada notes that according to the Trade Policy Review Report by the Government of 
Australia, that Australia submits that it played a constructive role on the issue of TRIPS and Public 
Health. Canada notes with interest the role played  by Australia and would be grateful if it could 
provide additional information with regards to its intention to implement the WTO Decision on 
Access to Medicines and if any concrete step s have been contemplated to that end. 
  WT/TPR/M/178/Add.1 
 Page 39 
 
 
  PREGUNTAS DE MÉXICO  
 
I. ENTORNO ECONÓMICO 
3. Políticas macroeconómicas 
ii) Política fiscal 
 
Párrafo 14 (p. 7)  
Señala que se redujeron los aranceles sobre cierta s importaciones y se suprimió el arancel aplicado a 
los insumos que importan las empresas en el marco del sistema de concesiones arancelarias  
¿Cuáles sectores son los productos que reportan mayores importaciones bajo el sistema de 
concesiones arancelarias? ¿Qué requisitos específicos deben cumplir las empresas importadoras?   
II. RÉGIMEN DE POLÍTICA COMERCIAL 
6. Arreglos y acuerdos comerciales 
ii) Acuerdos preferenciales y regionales 
 
Párrafo 24 (p. 25)
 
ANZCERTA. Las nuevas normas de origen que se adoptarán a partir del 1 de enero de 2007 se basarán en un cambio en la clasificación arancelaria al nivel de 6 dígitos del SA.  
¿Estos cambios a nivel de 6 dígitos serán para t oda la tarifa arancelaria o solo algunos sectores 
específicos?  
III. POLÍTICAS Y PRÁCTICAS COMERCIALES POR MEDIDAS 
2. Medias que afectan directamente las importaciones 
i) Prescripciones en materia de registro y documentación 
 Párrafo 9 (p. 36)
 
Australia no aplica prescripciones en materia de in spección previa a la expedición las importaciones o 
las exportaciones.  Cuando procede tales prescrip ciones se determinan en función de cada caso.  
 
¿En que casos sí proceden las prescripciones en materia de inspección previa a la expedición? y 
¿cómo se determinan?  viii) Contratación pública  
¿Cuáles son las condiciones de acceso o trato preferen cial en las compras de bienes y servicios de un 
país socio, y que por lo tanto gozan de los co mpromisos específicos sobre contratación pública, en 
comparación con las que tienen los bienes y servicios originarios de países no socios?  
3. Medias que afectan directamente a las exportaciones 
iv) Asistencia a la exportación  
Párrafo 88 (p. 69)
 
Menciona que la Corporación de Financiación y Seguros de las Exportaciones proporciona asistencia 
mediante una cuenta comercial y una cuenta de inte rés nacional.  En el píe de página 127 se establece 
que las cuentas nacionales tienen lugar cuando el tamaño o el riesgo de la transacción comercial 
exceden los parámetros comerciales de la Cor poración y cuando el Ministro de Comercio las 
considera de interés nacional.  ¿Cuáles son los parámetros comerciales de la Corporación? y ¿Cuáles son los criterios que el Ministerio de Comercio utiliza para considerar o no de interés nacional? WT/TPR/M/178/Add.1 
Page 40  
 
  IV. POLÍTICAS COMERCIALES POR SECTORES 
4. Sector Manufacturero 
ii) Sector Automóvil 
 Párrafos 60 (p. 107)
 
A fin de complementar la reducción de los arancel es promoviendo la competitividad de las empresas, 
los participantes del Plan de Competitividad e Inve rsiones del Sector Automóvil reciben créditos en 
concepto de derechos trimes trales que pueden usar para pa gar los derechos de aduana. 
 ¿En que consisten estos créditos?  ¿Cómo operan dichos créditos? 
 
Párrafo 62 (p. 108)
 
Las compras gubernamentales de vehículos auto móviles deben ser fabricados en Australia. 
 ¿Esta contemplada la eliminación de este requisito?, de ser el caso ¿cuál es el calendario para su 
eliminación? 
 
5. Servicios
2 
iii) Acuerdos regionales sobre servicios. 
 Párrafo 76 (p. 111)
 
En acuerdo de libre comercio entre Tailandia y Aust ralia se adoptó un enfoque de  lista positiva para la 
consignación de compromisos sobre servicios, mientras que los acuerdos suscritos con Singapur y 
EE.UU. utilizan el enfoque negativo.  ¿Cuáles son las razones o criterios que Australia evalúa al momento de  decidir qué tipo de enfoque de 
negociación utiliza (positivo o negativ o) en materia de servicios? 
 iv) Servicios financieros / b) Banca.  Párrafo 82 (p. 114)
 
Ningún banco extranjero puede recibir depósitos ni  efectuar operaciones en Australia a menos que 
haya sido autorizado por la Autoridad de  Australia de Reglamentación Cautelar. 
 ¿Cuáles son los requisitos que necesita cumplir un banc o extranjero para que se le permita realizar 
operaciones financieras en Australia?  
v) Comunicaciones / a) Telecomunicaciones. 
 Párrafo 96 (p. 118)
 
 En abril de 2004, el Ministro de Comunicaciones, Tecnología de la Información y Artes decidió que 
la ACCC examinara el funcionamiento de los contro les de precios al por menor de Telstra, lo que 
resultó en la imposición de nuevos  controles de precios a Telstra a partir del 1 de enero de 2006 y 
vigentes hasta el 30 de junio de 2009. 
                                                     
 
 2 De acuerdo a información proporcionada por la Se cretaría de la OMC, la Lista de compromisos 
específicos de Australia en el marco del AGCS no ha experimentado cambios desde 2002.  Sus actuales compromisos en el marco del AGCS abarcan la mayoría de los sectores de servicios, excepto los audiovisuales, 
postales/de mensajeros y de transporte por ferrocarril.  Australia presentó una ofer ta revisada relativa a los 
servicios en mayo de 2005, en la que se proponen mejoras a su lista actual de compromisos en esferas como el modo 4, los servicios profesionales, de telecomunicaciones, rel acionados con el medio ambi ente, de transporte y 
de logística.  WT/TPR/M/178/Add.1 
 Page 41 
 
 
   
¿Cuales son los nuevos controles de precios aplicad os a Telstra? y ¿cuáles son en el caso de otros 
operadores?  v) Comunicaciones / b) Medios de información. 
 
Párrafo 98 (p. 118)
 
El 18 de octubre pasado, el Parlamento australiano aprobó un conjunto de medidas de reforma de los 
medios de información según las cuales, a partir de 2007, se eliminarán las actuales restricciones a la 
propiedad extranjera aplicables a medios de difusión específicos y periódicos específicos. 
 
México quisiera una explicación más detallada s obre el objetivo y alcance de dichas reformas. 
 vi) Transporte / b) Servicios Aéreos.  
Párrafo 110 (p. 121)
 
Australia permite que se establezcan líneas aérea s nacionales que sean totalmente de propiedad 
extranjera, excepto en el caso de la aer olínea australiana conoc ida como “Qantas”.  
 ¿Cuáles son las razones por las que no se permite una  participación mayor del capital extranjero en 
esta aerolínea? ¿Existe algún tipo de proyecto o plan por parte del gobierno que modifique esta 
situación? 
 Solamente las aerolíneas de Nueva Zelanda pueden h acer servicios de cabotaje en Australia, debido a 
que hay un acuerdo en la materia con ese país.   
¿Existe algún plan por parte del gobierno australiano para permitir que otras aerolíneas extranjeras 
puedan prestar estos servicios de cabotaje? 
PREGUNTAS DEL PERÚ
 
 
1) En el Informe de la Secretaría (página 39) se indica que los productos agrícolas tienen un 
arancel promedio bajo (1.3%). También se señal a que Australia aplica aranceles específicos y 
compuestos para un grupo de productos, y para los jugos de frutas los denominados aranceles 
“alternativos”. Al respecto, se agradecerá que Aust ralia precise como se definen y calculan dichos 
aranceles alternativos.   
2) Podría explicar Australia en qué consiste la asistencia a la comercialización que se otorga a 
los productos agrícolas como el arroz? 
  
3) En el informe de la Secretaría se indica:  
 
 “(…) las restricciones a los cárteles procedent es del extranjero son más estrictas que las que se 
aplican a los cárteles formados por exportadores nacionales.”  
 
(a) En el entorno del comercio internaciona l se presenta el peligro de conductas 
empresariales adoptadas en un determ inado estado pero cuyos efectos 
anticompetitivos se materializan en el merc ado de otro país –como los cárteles de 
exportación-, perjudicando a consumidores y em presarios de éste ú ltimo (las llamadas 
prácticas transfronterizas). En todos los casos, los cárteles implican una distorsión en 
la libre formación de los precios, por lo que la severidad de los mecanismos de WT/TPR/M/178/Add.1 
Page 42  
 
  represión de estas conductas por parte de la  autoridad de competencia debería ser 
igual en todos los casos.  
(b) Podría explicar Australia ¿cuáles son las restricciones a los cárteles procedentes del 
extranjero y qué medidas se han adoptado a fin de evitar que los cárteles eviten una 
distorsión en la libre formación de los precios? 
1. En la legislación de Australia, existen dos meca nismos de control de precios: la vigilancia 
informal y la vigilancia formal. Si bien la primer a se realiza principalmente con carácter informativo 
(e.g., encuestas sobre precios, notificación de precios y seguimiento de precios) y no tiene carácter normativo, la segunda implicaría un control de precios  en estricto y puede derivar en sanciones por el 
incumplimiento.  
 
Considerando la tendencia a la de sregulación, podría indicar Australia ¿por qué se ejerce un control 
de precios cuando lo recomendable sería que ello sea la excepción, como es el caso de los servicios 
con características de monopolio natural y donde no ex istan reales condiciones para la competencia? 
 
5) En el informe se indica que en materia de protección al Consumidor, la ACCC ( Australian 
Competittion and Consumer Commission ) ha adoptado entre sus principales medidas la regulación 
sobre los siguientes temas:  - Prácticas engañosas y dolosas.  - Venta piramidal. 
- Incumplimientos de las disposiciones de la Le y de Prácticas Comercia les sobre seguridad del 
producto y responsabilidad del producto. - Hostigamiento y coerción. - Oferta no solicitada de productos. - Abuso de precios.  
 
5.1) Al respecto, es relevante destacar la re gulación que en el tema de venta piramidal ha 
introducido Australia. El Perú agradecería conoc er los resultados que se ha obtenido con la 
mencionada regulación.   5.2) En cuanto a las llamadas prácticas de “hos tigamiento y coerción”, podría indicar Australia 
cómo se ha regulado dichas prácticas? Cuál sería la  diferencia entre esas prácticas de hostigamiento y 
coerción y las denominadas “ofertas no solicitadas de productos”, teniendo en  consideración que de 
acuerdo a otros modelos normativos, como el del Perú, las ofertas no solicitadas pueden enmarcarse 
como una forma de práctica comercial coercitiva.   
5.3) De acuerdo al documento bajo comentario, la legislación australiana  habría introducido una 
regulación contra el “abuso de precios” como part e de su política de protección al consumidor. Al 
respecto, resultaría importante, por lo tanto, estab lecer ¿cuál es la regulaci ón que se ha introducido 
para el tema de precios abusivos y cómo  se estaría evitando que dicha regulación imponga 
limitaciones al mercado y a la libre determinación de  las partes en medio de una relación comercial?  WT/TPR/M/178/Add.1 
 Page 43 
 
 
  QUESTIONS FROM THE REPUBLIC OF KOREA  
 I. Trade Polices and Practices by measure 
 
1. Automotive Competitiven ess and Investment Scheme  (WT/TPR/S/178 p. 29, 37, 
para. 5, 24) 
 
- Australia temporarily conducts the Automo tive Competitiveness and Investment Scheme 
(ACIS) during the term, lowering its customs rate in order to protect the domestic vehicle 
industry. However, as an industry-specific a ssistance program, Korea believes that ACIS 
violates the WTO regulations in that it substa ntially harms importers. Accordingly, ACIS 
must be modified or abolished. Korea hopes that ACIS is improved to encourage fair 
competition. What is Australia's view on this ? Does Australia have plans to abolish the 
scheme? 
 2. Contingency Measures: Anti-dumping Measur es (WT/TPR/S/178 p. 41~43, para. 5, 24) 
- As pointed out in paragraph 35 of the S ecretariat's Report, the number of anti-dumping 
investigations initiated has declined greatly since the year 2003. However, Australia has initiated a 
total of 188 anti-dumping investigations on produc ts imported from foreign countries since 1995 (as 
of June 30, 2006), which puts Australia sixth place in the list of countries that frequently resort to 
such measures.  
- Even an initiation of an investigation consid erably burdens the comp any under investigation 
as the company must pay additional fees in order to respond the investigation. Such burden 
leads to a decline in business activities.  
 - Anti-dumping measures should be used in ex ceptional cases to protect domestic industries 
from unfair foreign trade practices. Korea requests Australia to take a more prudent approach 
in initiating anti-dumping investigations  by stri ctly applying investigation conditions in order 
to avoid such measures from being abused as tools to protect domestic industries. Korea also 
requests that Australia enhance fairness and tr ansparency in investigation procedures. Does 
Australia have plans to review and improve the system?   
QUESTIONS BY TURKEY
 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE (2) Measures Directly Affecting Imports (ii) Tariffs, Para 15  
As the Secretariat Report reflects,  tariff escalation particularly in textiles, clothing and leather as well 
as food, beverages and tobacco remains  obstacle for developing countries’ exports to Australian 
market. 
 
How does Australia consider to deal with  tar iff escalation which may   in result impede the  
industrialization of developing countries  within the DDA  ? 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE (2) Measures Directly Affecting Imports (vii) Standards and Other Technical Requirements  
As underlined  by the   Secretariat Report, sanitary and phytosanitary regime of Australia is a strict 
one especially   with stringent rules under quarantine policy. In that regard, we have taken note of the WT/TPR/M/178/Add.1 
Page 44  
 
  official position maintained by the authorities th at decisions on imports and measures applied are 
science-based and not more trade restrictive than required .  
 
However, on the ground  that if unduly strict, me asures introduced for s anitary and phytosanitary 
purposes may become an import restriction or even prohi bition,  and that cons umer welfare might be 
reduced through higher prices, we would like to learn how does Australia strike a right balance 
between  her legitimate  SPS related concerns and th e trade restrictive dimensions of those measures? 
 IV. TRADE POLICIES BY SECTOR (2) Agriculture, Livestock, Forestry and Fisheries  
(iv) Border Measures  
 
It is noted that whilst the simple  average MFN Tariff for agricultural products remains low, at 1.4% 
and that most agricultural products are imported duty-free,  various levies and charges as well as 
export restrictions and licensing requirements are in e ffect in Australia, some of them which is applied 
in a discriminatory  manner such as the expor t  prohibition of merino genetic materials. 
 
We would like to ask the esteemed Australian  Delega tion,  their  further elaboration of those  wide -
spread non –tariff measures applied in  the agricultural sector of  such a country well known with her 
competitiveness of her agr icultural exports.   
 
IV. TRADE POLICIES BY SECTOR 
(4) Manufacturing (i) Textiles, clothing and footwear  
According to the Secretariat Report,  budgetary assistance is provided to textiles, clothing and 
footwear industry in Australia. It is further noted th at the assistance to the TCF industry is transitional 
and aimed at facilitating the industry to adjust to the reduced tariffs.  
Could the Delegation of Australia  further inform us on the consisten cy of this sector-based assistance 
with the rules set forth within the  WTO Ag reement  of Subsidies and Countervailing Measures? 
 
We would also like to learn if the notificatio n is made to the Committee on Subsidies and 
Countervailing Measures. 
QUESTIONS FROM CHINA
 
 
Report by the Secretariat (WT/TPR/S/178) 
 
Economic Environment 
Developments in Trade and Foreign Direct Investment  
Foreign direct investment 
 
1. (Page 12, Para.29) According to the Secretaria t Report, the share of FDI Australia received in 
the manufacturing sector declined from 38.9% in 2004 to 19.3% in 2005.  
 
In Australia’s view what are the caus es leading to this sharp decline?  
  WT/TPR/M/178/Add.1 
 Page 45 
 
 
  Trade Policy Regime: Framework and Objectives 
Foreign Investment Regime  
Overview 
 
2. (Page 24-25, Para.35) Australia practices a screening process on foreign investment to ensure 
its compliance with Australia’s “national interest”.  It is indicated in the Secretariat Report that such 
“national interest” considerations may include e nvironmental regulations, competition policy, national 
security interests and economic development. In th e last Trade Policy Review on Australia in 2002, 
Members raised a number of questions in this r espect, but the replies from Australia need further 
elaborations.  
 
In order to increase transparency in its approval  system, could Australia put all its “national 
interest” considerations in the form of a list? 
 
3. (Page 24-25, Para.35) Australia has foreign equi ty restrictions in certain “sensitive” sectors.  
 
Which laws and regulations define “sensitive”  sectors? Is there a list of “sensitive” sectors 
available? Apart from FTA factors, has Australia  modified the scope of “sensitive” sectors in 
recent years? Is it likely to narrow down this scope in the future? 
 
Trade Policies and Practices by Measure 
Measures Directly Affecting Imports  
Tariffs (Page 31, Para.13-14) 
 4. China notes the efforts taken by Australia regarding tariffs of textiles, clothing, footwear and motor vehicle components and spare parts, . However,  tariffs of these products remain relatively high, 
up to 17.5%.  
 
Could Australia provide information regarding situ ations of these industrial sectors such as the 
changes and adjustments that they have undergone in the past few years? 
 
5. It is mentioned in the Secretariat Report that more than 40% of Australia's bound rates 
currently exceed applied MFN rates by at least five pe rcentage points, and that since last review there 
has not been any increase in its applied tariff rates.  
 
How does Australia envisage to contribute to the multilateral trade liberalization process 
irrespective of any progress in the DDA negotiations? 
 
Import prohibitions, restrictions, and  licensing (Page 39, Para.32) 
 
6. Australia started import and export prohibitions on asbestos in 2003, but it did not specify if 
chrysotile asbestos were included. In 2006, Aust ralia amended its Customs regulations concerning 
prohibited products, which added pr oducts containing chrysotile asbes tos onto the list of prohibited 
imports. To our knowledge, there is still no conclu sive scientific proof internationally as to whether 
chrysotile asbestos products are harmful to human health or not.  
 
Could Australia please explain the scientific gr ounds on which the above-mentioned measures are 
taken?  
 
Standards and other technical requirements  7. (Page 43, Para.38) Legislation and administ ration regimes relating to technical regulations 
and standards of the Australian Commonwealth are different from those of the State and Territory WT/TPR/M/178/Add.1 
Page 46  
 
  governments. This may constitute unnecessary barriers to  international trade of relevant products, and 
increase the difficulty of market access for pr oducts from other Members including China. 
  (Page 46, Para.48-49) In terms of sanitary and phytosanitary measures, risk analysis of 
imported flora and fauna products ar e time-consuming and to the rele vant technical regulations are 
ambiguous. This creates difficulties to agricultural impor ts from its trading partners. China is affected 
on fruits, vegetables and some econom ic crops. The rigorous sanitary and phytosanitary measures on 
agricultural imports have created unnecessary ba rriers to the normal trade between China and 
Australia.  How does Australia envisage to do to correct this situation? 
 
8. We understand that Australia currently subj ects 63 types of electro-mechanic products to 
safety certification ,which takes at least 2 to 3 months to proceed.  
 
Does Australia have any plan to simplify the cert ification procedures ? Is Australia willing to 
negotiate an agreement with China on the mutu al recognition of safety certification of these 
products in order to facilitate bilateral trade? 
 
9. In December 2006, Australia published its risk assessment report on imported prawn and 
prawn products and announced its in tention to take stricter risk control measures on these products. 
The new measure adopted by Australia in this regard will prolong the process of quarantine and 
inspection, further increase the co sts for foreign exporters, hence virtually close the door for any 
prawn import, which would also impair the inte rests of Australian importers and consumers.  
Could Australia elaborate on the legal and scientific basis for such stringent measures? 
 
10. On 28 August 2006, Food Standards Aust ralia New Zealand (FSANZ) announced its 
intention to revise the Australia and New Zeala nd Food Standards Code to amend maximum residue 
allowances for pesticide and veterinary drugs.  
 
We would be interested in knowing when Australia plans to make public the revised Code. In the process of revision, will Australia notify it to the WTO and provide opportunities for other Members 
to comment?  
Government Procurement  11. (Page 50, Para.61) It is mentioned in the S ecretariat Report that Australia still has industry 
development initiatives for procurement arrangements for motor vehicles.   
 
Could Australia please indicate how these indu stry development initiatives are implemented in 
procurement process? 
 
12. (Page 50, Para.62) The Secretariat Report indi cated that Australia has no intention to become 
a party to the Government Procurement Agreement.  
 
Could Australia indicate its considerations behind this position? 
 
13. (Page 51, Para.66) According to para.66 of the Secretariat Report, the Australian Government 
has a target of sourcing at least 10% of purchases by value from small and medium-sized enterprises.   
 
Could Australia elaborate on its policies and proced ures in this regard? How is this implemented in 
practice? 
  WT/TPR/M/178/Add.1 
 Page 47 
 
 
  14. (Page 51-52, Para.67) The Secretariat Report said in para.67 that the industry development 
requirement was removed from the Endorsed Supp lier Arrangement (ESA) as from 1 January 2005.  
What specifically were the industry development requ irements in the ESA? And how had they been 
implemented? 
 
Local-content requirements (Page 52, Para.71-72) 
 
15. It is indicated in para.72 of the Secretariat Report that, since its last trade policy review, Australia has not made any notification under the WTO Agreement on Trade-Related Investment 
Measures.   Does this mean that the local-content requirement s as mentioned in para.71 have all been phased 
out? Could Australia confirm that it no lo nger has any TRIMs including local-content 
requirement? 
 Measures Affecting Production and Trade
 
Intellectual property rights  
 
16. (Page 69, Para.127) It is indicated in the Secretariat Report that Australia has committed to 
acceding to both the 1996 WIPO Copyright Treaty and the 1996 WIPO Performances and Phonograms Treaty (WPPT).   Is there a specific timetable for these  accessions?  17. Does Australia impose criminal penalties on  infringement and piracy over the Internet? 
What are the liabilities for ISPs in such cases? Do they include criminal liabilities? 
 
Trade Policies by Sector 
Mining, Electricity and Water
 
Mining 
 
18. (Page 81, Para.35) It is mentioned in the Secr etariat Report that the effective rate of assistance 
(ERA) for mining was virtually zero in 2003/04. It is also indicated that in 2004/05 mining received 
5% of total budgetary assistance.  
 
Does it imply that the assistance from the government  to the mining sector is increasing? Is such 
assistance available only to local enterprises?  
 19. Australia requires that exploration reports of mines shall follow the 2004 Australian Code for 
Reporting Exploration Results, Mi neral Resources and Ore Reserves, which means that reports 
produced by foreign services providers are not acce pted. In this case mining projects with Chinese 
investment can only turn to Australian laboratories for exploration services.  
China would like to know how the Chinese explora tion services providers can contribute to those 
projects with investment from Chinese enterprises. 
 Services
 
Overview 
 20. Visa procedures of Australia are cumbersome and time-consuming and create barriers to the 
movement of natural persons which is an importa nt mode of trade in services. Chinese companies 
operating in Australia have long been frustrated in  obtaining visas for their employees. Complaints 
from them include that it takes at least 2 to 3 months  to obtain a visa for an employee. In some cases it 
took even up to 10 months.  WT/TPR/M/178/Add.1 
Page 48  
 
   
China attaches great attention to this issue and hop es that Australia could, from the perspective of 
promoting and facilitating bilateral trade, place a priority on finding a solution.  
 
21. In respect of the Vocational List of Aust ralia concerning foreign labor, what are the 
specific provisions?  
 
Financial services 
 
22. Australia allows for mixed financial services.   Could Australia please share with  Members its experience in how financial institutions engaged in 
mixed services are administered and supervised? 
 
23. Australia has been supporting and encouraging financial innovations.  
Could Australia please introduce how the new financ ial services emerged in the domestic markets are 
licensed and supervised? 
 
24. It has always been difficult for regulatory authority to monitor and supervise cross-border 
delivery of financial services .  Could Australia please introduce its regulatory framework and experiences in this respect? 
 
25. Industrial and Commercial Bank of China (ICBC) established its representative office in 
Sydney in June 1999, and applied for changing the office in to a branch in February 2000. Since 2005 major reform steps have been taken by ICBC, whic h have transformed it into a joint stock limited 
company listed now both in Shanghai and Hong Kong, China. This has enabled ICBC to meet the 
regulatory criteria and standards in Australia.  
 
What specific steps will Australia take to respond positively to the ICBC branch application? 
 
Communications 
 The Australian Government used to have 51.8% owne rship of Telstra, which in 2006 was reduced to 
17%. However, foreign ownership of Telstra is s till limited to 35% in aggregate, and up to 5% 
individually. 
 
26. Did the reduction of the government ow nership in 2006 imply launch the further 
privatization process of Telstra? If the foreign participation is still capped, is there a national 
treatment problem in the privatization process?  27. What is the shareholding structure of Telstra now (by the end of January 2007)? What is the individual ownership respectively?  
28. Does Australia have any plan of relaxing the foreign ownership limitation in Telstra? 
 
Transport 
 
29. China would be grateful if Australia could sh are detailed information on its vessel registration 
system.  
 
Are there laws and regulations that would allow different treatment to be accorded to vessels 
registered in Australia and foreign-flagged vessels? If yes, what are they?   WT/TPR/M/178/Add.1 
 Page 49 
 
 
  30. Foreign participation of airpor ts in Australia is subject to case-by-case approval. It shall not 
go beyond 49% for foreign ownership and, with on ly 5% permitted for foreign airlines and cross-
ownership between Sydney, Melbourne , Brisbane, and Perth airports.  
 
Could Australia please explain reasons for these lim its? Is there any plan of relaxing these limits?  
QUESTIONS BY SOUTH AFRICA  
 1. (vii) Standards and other technical requi rements; (b) Sanitary and phytosanitary 
regulations.  
 
According to WT/TPR/S/178, Page 46, Paragraph 48:  
“Australia has a strict sanitary and phytosanitary re gime. The authorities justify this by maintaining 
that Australia has unique and diverse flora and fauna , is a major exporter of agricultural products, and 
is relatively free from serious pests and diseases.  Under quarantine policy, commodities may not be 
imported unless the quarantine risks are reduced to a le vel consistent with Aust ralia's appropriate level 
of protection (ALOP), which is described as "provi ding a high level of sanitary and phytosanitary 
protection aimed at reducing risk to a very low level, but not zero".
3  However, if the SPS regime is 
unduly strict, it may constitute an import restriction or prohibition.  Some WTO Members have raised 
concerns about the strictness of the Australian regi me in the Committee on Sanitary and Phytosanitary 
Measures, covering, inter alia,  cosmetics, fresh fruits and vegetables, live fish, prawn and prawn 
products, chicken meat, pigmeat, sauces, and cheese”.  
 
Question:  South Africa notes the very strict SPS measures applied by Australia. South Africa is especially concerned about the long time it takes to c onclude some pest risk analysis. Does Australia 
foresee any changes to the p est risk analysis procedures to speed up the process? 
QUESTIONS FROM MALAYSIA
 
 
A. Australia-Thailand FTA (TAFTA)  
- Can Australia provide information on the per centage of tariff lines on which tariffs will be 
eliminated (overall and by sector).  Please also provide information on the volume of trade for 
sensitive sectors for which tariff have been eliminated ? Please confirm if all tariffs for textiles will be 
eliminated by 2015 in TAFTA? 
 
- Could Australia provide more details on the pr ovisions in the Australia-Thailand FTA which 
deal with Sanitary and Phytosanitary chapter. Ho w does the FTA facilitate importation of goods into 
Australia? 
 
B. RTAs in general 
 
- Australia considers that ‘high quality’, amb itious and comprehensive RTAs can complement 
and provide momentum to its multilateral trade obj ectives.  To what extent will the Australian 
Government open its domestic market to FTA  partners for its agricultural products? 
 
                                                     
 
 3 DAFF (2003). WT/TPR/M/178/Add.1 
Page 50  
 
  C. Safeguards  
 
- Could Australia confirm that the procedures for safeguard investigations (as published in 
Gazzette No.S297 of June 1998 and amended in  2005), the Productivity Commission Act 1998 and 
the Custom Act 1901 the only procedures and laws re lating to safeguard measu res? Does Australia 
intend to have a dedicated safeguard legislation? 
 
QUESTIONS ON COMPETION AND CONSUMER POLICY (TRADE POLICY REVIEW 
REPORT BY THE SECRETARIAT – AUSTRALIA WT/TPR/S/178) 
 
Question 
 
1. How does ‘annual competition payments’ facilitate reform?  
Related sections: 
 
Page 50
 
 
Excerpt: 
 (i) Competition and consumer policy 
(a) Competition policy 
General framework 
 
105. Australia's National Competition Policy (NCP) framework explicitly recognizes that 
competitive markets generally serve the interests of consumers and the co mmunity, by providing 
strong incentives for suppliers to ope rate efficiently, be price competitive, and be innovative.  The 
NCP was formulated in 1995 when the Commonwealth together with state and territory governments 
committed to consolidate their implementation of competition policies.  One innovation of the NCP 
was the annual competition payments, which were allocated between 1997/98 and 2005/06 by the 
Commonwealth to state and territory governments fo r their implementation of the reform;  where 
there was lack of progress on NCP-related reform , the Government, upon recommendations from the 
National Competition Council (N CC), could reduce payments. 
 
Page 64
 
 Excerpt: 
 
Legislative review and reform  109. As part of the NCP, under the Compe tition Principles Agreement (CPA), governments 
(Commonwealth, states and territories) undertake to review and reform legislation that restricts competition.  The governments agreed that legislation should not restrict competition unless it can be 
demonstrated that the benefits of the restriction to the community as a whole outweigh the costs, and 
the objectives of the legislation can only be achieve d by restricting competition.  The CPA provides 
guidance on issues that should be considered in a re view;  these include, objectives of the legislation, 
nature, cost, and benefits of the restriction an d the likely effect on competition and on the economy 
generally, and alternative measures for achie ving the same result including non-legislative 
approaches.  Since 1996, when all Australian govern ments published a legislation review schedule, 
approximately 1,800 pieces of legisla tion have been identified for review. 
 110. Reforms to the TPA commenced in Octobe r 2006, based on recommendations made in the 
2003 Review of the Competition Provisions of th e Trade Practices Act (Dawson Review).  The  WT/TPR/M/178/Add.1 
 Page 51 
 
 
  Dawson Review emphasized that the TPA should remain focused on protecting the competition 
process and not be used for industry policy, nor to preserve uncompetitive companies.  It recommended that the TPA be ame nded to improve its operation by, inter alia,  providing for greater 
accountability, transparency, and tim eliness in decision-making by the ACCC, and reducing the 
regulatory burden on business.  Reform measures to be adopted include strengthening functions of the 
ACCC, increasing penalties for contraventions of the TPA, improving transparency for mergers, and 
setting up a simpler and less costly process for collective bargaining by small businesses.   
 111. The National Access Regime (Part IIIA of the TPA) provides a legislative framework for 
third party access to certain services provided by essen tial infrastructure facilities, such as electricity 
networks, rail tracks, and natura l gas pipelines.  By giving economic entities the legal right to 
negotiate the use of these services, the regime inte nds to ensure that businesses are offered reasonable 
terms and conditions of access.  In the event th at the parties are unable to reach a commercial 
agreement, it provides recourse to binding arbitr ation.  In response to a Productivity Commission 
review, the Australian Government agreed to a range of measures designed to clarify the Regime's 
objectives and scope, encourage efficient investme nt in infrastructure, strengthen incentives for 
commercial negotiation, and improve the transparency of regulatory processes.  Legislation to address 
these issues also took effect on 1 October 2006.  112. On 2 February 2005, the Government announced  its intention to introduce criminal penalties 
for serious cartel conduct.  The proposal would prohibit any agreement between competitors that 
contains provisions to fix prices, restrict output, divi de markets or rig bids.  Legislation in this regard 
is currently being prepared.  113. The Productivity Commission conducted a re view of the NCP and concluded that the 
legislative review programme should continue, but concentrate more on "significant" anti-competitive 
legislation and be more transpar ent and independent.  Recommended priorities include anti-dumping, 
cabotage restrictions, single-desk marketing for wheat exports, pharmaceutical goods, and workers' 
compensation insurance.  In 2005, the COAG reviewed the NCP, taking into account recommendations from the Productivity Commission.  Following the review, on 10 February 2006 the 
COAG endorsed a new National Reform Agenda, wh ich included competition and regulation reforms 
aimed at facilitating investment in  energy, transport, and other export-oriented infrastructure, and 
achieving efficient use of infrastructure by improvi ng pricing and investment signals and establishing 
competitive markets.  The COAG is expected to consider specific re form proposals in these areas in 
2007.  In addition, reform to reduce regulatory bu rden has been pursued in response to the Banks' 
Taskforce Report (Chapter II(4)).  Questions 
 
2.  What is the basis for allowing exemption to  the tpa on international liner cargo shipping and 
export contracts?  3.  Anti-competitive behaviour is allowed on case-by-case basis: can australia provide example 
of the cases? 
 
Related sections: 
 Page 63-64
 
 
Excerpt: 
 
107. Competition legislation is c ontained in the Trade Practices Ac t 1974 (TPA), which covers all 
business activities, including government business. The TPA prohibits arrangements that substantially WT/TPR/M/178/Add.1 
Page 52  
 
  reduce competition, and that contain an exclusiona ry or price-fixing provision, as well as secondary 
boycotts, misuse of substantial market power, carte l conduct, resale price ma intenance, and mergers 
or acquisitions that may substantially lessen competiti on.  However, exemptions to theTPA remain for 
international liner cargo shipping (Chapter IV(5)(v i)(a)), and export contract s;  although details of 
export contracts have to be filed with the ACCC, restrictions on cartels originating from abroad are 
stricter than on cartels formed by domestic e xporters.  Anti-competitive behaviour may thus be 
allowed on a case-by-case basis through an admi nistrative process managed by the Australian 
Competition and Consumer Commission (ACCC), and on condition that they are in the public interest. 
 
Questions 
 
4. To what extent does australia manage the pr oblem of assymetric information in the market? 
 5. The efficiency of supply of consumer produc t depends on the efficacy of logistic support;  
how does australia ensure this? 
 6. Price surveillance act 1983:  - Does this act provide power in controlling excessive profiteering? - How does australia overcome the issues of “pri ce controls tend to distort market outcomes” 
and “relaxing price controls could lead to inefficiently high prices”? 
- How does australia undertake formal price surveillance? 
- How australia undertakes informal surveillance in the insurance, petrol, and bank fees and 
charges and what kind of actions can be  taken against non-compliance activities? 
 Related Sections:  Page 65-66
 
 Excerpt: 
 
Price surveillance  
114. Price controls tend to distort market outcomes.  Furthermore, for non-renewable resources, if 
prices are suppressed, sustainable supply of these resources in the long run could be compromized.  On the other hand, according to the Productivity Co mmission, without effective competition in these 
markets, relaxing price controls coul d lead to inefficiently high prices 
 115. Price restrictions applied under the Pr ice Surveillance Act 1983 (PS Act) are now 
incorporated into the TPA (Part VIIA).  Currently, there are three forms of price surveillance:  price 
inquiries, where the ACCC is guided by portfolio Ministers to undertake a public inquiry;  price notification, where the portfolio Minister requi res specific companies to notify the ACCC of a 
proposed price increase;  and price monitoring, wh ere the portfolio Minister directs the ACCC to 
monitor the prices, costs, and profits of compan ies and government agencies relating to specific goods 
and services.  Price surveillance may be conducted in formally or formally.  There is no legislative 
process for informal surveillance, which has been used to respond  to consumers' concerns in, 
inter alia,  insurance, petrol, and bank fees and charges.  Under the formal price surveillance system, 
penalties may be applied for non-compliance actions .  The ACCC conducts formal price surveillance 
on aviation and airports, electricity, telecommunications, and container stevedoring.      WT/TPR/M/178/Add.1 
 Page 53 
 
 
   
PREGUNTAS E INQUIETUDES PLANTEADAS POR LA REPUBLICA DE COLOMBIA  
 Reporte de la Secretaría WT/TPR/S/178  
Parte III.  POLITICAS Y PRÁCTICAS COMERCIALES POR MEDIDAS  
 
Numeral 2) Medidas que afectan directamen te a las importaciones. Párrafo 25.  Aparte de los 
derechos de aduana, las importaciones están sujetas a un impuesto sobre bienes y servicios (GST), que se aplica a la mayor parte de las mercancías importad as.  Entre las excepciones al GST figuran ciertos 
productos alimenticios, algunos dispositivos médi cos y las importaciones que reúnan las condiciones 
para beneficiarse de determinadas conc esiones en materia de derechos.   
 
1. ¿Cuáles son las condiciones que debe cumplir  una importación para beneficiarse de la 
exención del impuesto sobre bienes y servicios (GST)?.   
 
2.  ¿Cuáles derechos o impuestos se exceptúan de  ser cancelados si se cumplen las condiciones a 
que hace referencia la pregunta anterior?  
Numeral 2) Medidas que afectan directamente a las importaciones.  Vii) Normas y otras 
prescripciones técnicas. Párrafo 39.  Normas, pruebas y certificación.    La política australiana tiene 
como objetivo que las normas nacionales sean compatibles con las correspondientes normas o 
prácticas internacionales o internacionalmente aceptadas,  a fin de reducir al mínimo los obstáculos al 
comercio.  En particular, las normas obligatorias deben ser compatibles con las obligaciones internacionales de Australia.  Sin embargo, a falta  de una norma internacional adecuada, se elaboran 
normas nacionales sobre la base de los dos requisito s fundamentales de transparencia y consenso.   
 
3.  ¿Cómo es el procedimiento aplicado para cu mplir los requisitos de transparencia y consenso 
en la elaboración de este tipo de normas?   4.  ¿Cuáles entidades públicas y privadas interv ienen en la búsqueda del consenso? Si no se 
alcanza a lograr el consenso, y la norma es urgente, cómo se tramita?  
 
5.  ¿Participan los estados en el proceso de tr ansparencia y consenso en la elaboración de estas 
normas?  
Numeral 3) Medidas que afectan directamente a las Exportaciones.  iv)  Asistencia a la 
exportación.  Párrafo 78-80 
 
La Secretaría reporta en esta sección los program as de promoción de las exportaciones que utiliza 
Australia: El Plan de Subvenciones para el Desa rrollo de los Mercados de Exportación (EMDG), los 
programas de concesiones en materia de derechos (TRADEX), el régimen de devolución de derechos, 
entre otros.  
 
6.  ¿Los programas de subvenciones para las e xportaciones y de  concesiones  en materia de 
derechos, han sido notificados al Comité de Subvenciones y Medidas Compensatorias de la OMC?   
 7.  Se menciona que el EMDG se dirige en un alto porcentaje a las pequeñas y medianas 
empresas. ¿Cómo se garantiza la compatibilidad de este Plan de Subvenciones con las disposiciones 
derivadas de la OMC?   8.  ¿Cuáles son las Directrices que se aplican a los bienes “no fabricados en Australia”? ¿En qué consisten las subvenciones otorgadas a las empresas que los fabrican? ¿Qué porcentaje del beneficio WT/TPR/M/178/Add.1 
Page 54  
 
  se concede a ellas? El Informe de la Secretaría (párrafo 88) menciona que se aplica sobre beneficios 
netos significativos. ¿Podría Australia ampliar que es “significativo”?  9.  ¿El Plan de Concesiones al Comercio y a la  Exportación (TRADEX) cubre a bienes de capital 
o repuestos, importados por las em presas para elaborar bienes destinados a la exportación? 
 
Numeral 4) Medidas que afectan la Producción y el Comercio.  i)  Fiscalidad.  Párrafo 91.  Los 
impuestos que gravan el comercio internacional c ontribuyeron únicamente con un dos por ciento a los 
ingresos fiscales totales.  Cuadro III.6.    
10.  ¿El rubro “impuestos sobre el comercio internacional” del cuadro III.6, hace referencia 
únicamente a los gravámenes arancelarios? o ¿incluye  otros impuestos o cargas adicionales, como el 
GST del 10% que se cobra a casi todas las importaciones? 
 
PARTE IV.  POLITICAS COMERCIALES POR SECTORES  
 
Numeral 5),  Servicios.  iv) S ervicios financieros. Párrafo 77 .  La contribución de los servicios 
financieros al PIB aumentó del 7,5 por ciento en 2001/2002 al 7,8 por ciento en 2005/2006 (cuadro I.2).  El sector de los servicios financieros de Australia se basa en tres grupos principales de 
instituciones:  las instituciones autorizadas a aceptar depósitos, que incluyen los bancos, las 
sociedades de préstamos para la vivienda y las coope rativas de crédito;  los intermediarios financieros 
no autorizados a aceptar depósitos, que incluyen l as empresas del mercado monetario, las compañías 
financieras y las instituciones de titulización;  y lo s gestores de fondos y aseguradores, que incluyen 
las compañías de seguros de vida y generales, los fondos de jubilación y los fondos de depósito 
autorizados (cuadro IV.3).  
11. ¿Cuáles son las razones que explican el incr emento en la contribución que hace el sector 
financiero al PIB?  Numeral 5),  Servicios.  iv) Serv icios financieros. Párrafo 87.   Las compañías de seguros de vida 
son supervisadas por la APRA en virtud de la Ley de Seguros de Vida de 1995.  En Australia no hay 
aseguradoras de vida de propiedad pública.  Los f ondos de jubilaciones representan la mayor parte de 
los activos de las compañías de seguros de vida   el 89 por ciento al 30 de junio de 2006- y 
aproximadamente el 90 por ciento de las primas en  2005/2006.  Al 30 de junio de 2006 alrededor del 
22 por ciento de todos los activos de jubilación están colocados en pólizas de seguros de vida.  12. ¿Podría informar Australia si en el pasa do existieron aseguradoras de vida de propiedad 
pública? De ser así, indicar los motivos que condujeron a la situación actual, es decir, la no existencia 
de aseguradoras de vida de propiedad pública.  Numeral 5),  Servicios.  iv) Serv icios financieros. Párrafo 88.   En diciembre de 2005 había 
133 compañías privadas de seguros generales en Au stralia, de las que 112 son aseguradoras directas y 
21 reaseguradoras.  Son supervisadas a título cautelar por  la APRA en virtud de la Ley de Seguros de 
1973.  El sector de los seguros generales también está muy concentrado, ya que los tres grupos 
principales tienen el 45 por ciento de los activos totales del sector y los 10 primeros representan el 
61 por ciento de los mismos.   En Australia hay también 14 compañías públicas de seguros generales;  estas compañías no están sujetas a la Ley de Seguros ni son reguladas por la APRA, sino que se rigen por legislación de nivel estatal. 
 
13. De acuerdo con el párrafo anterior, las compañías públicas de seguros generales no están 
sujetas a la Ley de seguros ni son reguladas por la APRA. ¿Significa ello que los requisitos de 
constitución de este tipo de empres as son diferentes a los exigidos a las compañías de carácter 
privado?  WT/TPR/M/178/Add.1 
 Page 55 
 
 
   
Numeral 5),  Servicios.  v) Comunicaciones. Párrafo 94.  El régimen de servicio universal 
comprende la obligación de servicio universal (USO ) y la obligación de servicio de datos digitales 
(DDSO).  Telstra Corporation Ltd. (Telstra) es  el proveedor del servicio universal, aunque esa 
condición puede otorgarse a cualquier otro proveedor de servicios.   Telstra recibe una subvención por 
las obligaciones USO y DDSO determinada por el Mi nistro de Comunicaciones con el asesoramiento 
de la ACMA.  La subvención se financia median te un gravamen cobrado a todos los portadores, 
incluida Telstra, en proporción al ingreso en concepto de telecomunicaciones que les corresponde. 
 14. ¿En que consiste la obligación de  servicios de datos digitales? 
 
Numeral 5),  Servicios.  v) Comunicaciones. Párrafo 97.  La competencia en el mercado de las 
telecomunicaciones ha sido apoyada por el régime n de acceso nacional (capítulo III 4) iii) a)) de la 
Ley de Prácticas Comerciales de 1974.  El marco competitivo en las telecomunicaciones fue 
perfeccionado por la Ley de Competencia en las Telecomunicaciones adoptada en 2002 para, entre 
otros fines, acelerar el acceso a los servicios de  telecomunicaciones esenciales, facilitar la inversión 
en nueva infraestructura y mejorar la transparen cia del mercado.  En septiembre de 2005, el 
Parlamento aprobó otro conjunto de dis posiciones de regulación del régimen de las 
telecomunicaciones y, en ese contexto, el Gobierno se desprendió de la parte del capital de Telstra que conservaba (párrafo 95).  El paque te de disposiciones incluyó el f uncionamiento totalmente separado 
de los sectores minorista, mayorista y de redes de Telstra a partir del 1º de diciembre de 2006;  la 
separación de las operaciones incluye medidas rel acionadas tanto con los precios como con otros 
aspectos, con el fin de asegurar que Telstra no utili za su posición dominante en los sectores mayorista 
y de redes para dar ventaja a su propio sector minorista en forma anticompetitiva.  15. ¿Cuáles son los mecanismos utilizados pa ra promover la competencia en el sector? 
 
16. ¿Cuáles son las obligaciones de un proveedor mayorista como Telstra? 
 
Servicios Profesionales 
 
En el Informe de la Secretaría,  no se hace ninguna re ferencia a los servicios profesionales.  Por ello, 
Colombia solicita sean resueltas las siguientes preguntas: 
 17. ¿Cómo es la regulación Australiana en este sect or, específicamente en servicios de ingeniería, 
arquitectura, contabilidad, salud, y enseñanza?   
18. ¿Se permite el desplazamiento temporal de personas para prestar servicios profesionales? 
Cuáles son las condiciones?  19. ¿Qué acuerdos en materia de reconocimiento de títulos, programas o licencias tiene Australia 
vigentes? 
HONG KONG, CHINA’S QUESTIONS
 
 
Banking 
(WT/TPR/S/178, P. 92 – 93, Para. 83) 
 1. It is noted that under the Financial Sector  (Shareholdings) Act 1998, financial sector 
companies are subject to a 15% shareholding lim it, although the Treasurer may approve a higher 
percentage on “national interest” grounds.  Could Australia advise on the compatibility of the subject 
limitation with its existing GATS commitments?  What are the factors that the Treasurer will take into WT/TPR/M/178/Add.1 
Page 56  
 
  account in deciding whether to approve a higher per centage and what are those “national interest” 
grounds based on which the Treasure r will make such a decision? 
 
Communication Services 
 Media
 
(WT/TPR/S/178, P. 96, Para. 98)  2. We are pleased to note that the current me dia-specific and newspaper-specific foreign 
ownership restrictions would be re moved from 2007.  Yet, as stated in the Secretariat’s report, certain 
investment proposals by foreign interests are still s ubject to prior approval/examination.  What are the 
factors that the Australian Government will take in to account as to whether to grant approval for those 
proposals?     Audiovisual Services
 
 
3. We note from Australia’s revised offer that it is  currently maintaining an MFN exemption on 
audiovisual services concerning its co-production progra mmes.  We would be grateful to know if the 
measures under the exemptions are applied by national origin of the audiovisual works; and if so, how 
the national origin is applied, whether by the or igin of the funding party, the production crew, the 
place of production, etc.  Would Australia also advise whether it would consider removing the two 
MFN exemptions currently maintained by it in its future offers?   
 
Maritime Transport Services 
(WT/TPR/S/178, P. 97, Para. 102) 
 
4. We note that both domestic and foreign-flagged vessels are required to obtain a licence or a 
permit to operate in Australia’s coastal shipping.  It  is however stated in the Secretariat Report that 
“permits are almost always related to foreign-flagged vessels”.  We would appreciate if Australia could elaborate the rationale behind this phenomenon. Grateful if Aust ralia could also clarify whether 
there are restrictions on commercial presence with respect to foreign equity holdings in domestic 
shipping liner.   
QUESTIONS BY PAKISTAN
 
 
Question 1:  
 Paragraph 26 of the Secretariat report provides that the excise duty on domestic ethanol is rebated for 
the first 12 months. This concession is not allowed to  the imported ethanol. Isn’t this a violation of 
Article III concerning National Treatment on internal taxation and regulation?  Question 2:
 
 According to the Secretariat report (Paragraph 9), Australian tariffs on primary products are 
considerably lower than on semi-processed goods . Thus, tariff escalation constitutes a potential 
obstacle for industrialization of developing countries. Are there any plans to address this issue in the 
near future?   WT/TPR/M/178/Add.1 
 Page 57 
 
 
  Question 3:  
 Although Australian applied MFN tariffs are low, th ere are more than 40% of bound rates currently 
exceeding applied MFN rates by at least 5 percentage points. Is Australia keeping this differential as a 
policy space for future adjustment? 
 
Question 4:
 
  Australia has limited imports of fruits and vegetables from most countries including Pakistan due to 
strict SPS rules and regulations. This restricts market access for Pakistan.  
Pakistan sent draft agreement on cooperation be tween Pakistan and Australia, which is under 
consideration of Australian Department of Agricu lture. Could Australia let us know the procedures 
and time involved in entering into cooperation a nd accreditation agreements for various standards 
related issues? The delay caused in this process may oust some of the small exporting countries 
against the big exporters. 
 
Question 5:
 
  In their services horizontal commitments no equity li mitation is recorded while in national treatment it 
is stipulated that at least two of the directors must  be ordinarily resident in Australia even in case of 
100%  ownership in all sectors across the board. What is the rationale for such a limitation? Is there 
any time-frame for doing away with this? 
 Question 6:
 
 Australia’s revised offer in Mode 4 of Services is appreciated as one in which efforts have been made 
to cover developing countries demands. The coverage states that market access recorded is to the 
extent of the list of gazetted occupations and thei r immigration website gives the lists, which include 
professional services covering most sectors, though not fully, as this is a positive list approach. However, the requirement of sponsorship as well as re quirement of contract in their revised offer, 
made during the period under review, lack clarity. Bo th ensure that a temporary person has legitimate 
means of support and some one is responsible for the stay. In other words, a person in the possession 
of a valid job contract is as good as sponsored or vice versa. Would the Australian delegation explain 
the difference between a valid job contract that  includes terms and conditions, salary package and 
duration of job and a ‘sponsorship’ in the context of a temporary service provider? 
QUESTIONS FROM INDIA
 
SPS Issues 
Q 1. Export of Indian mangoes to Australia.   
 India exported mangoes to Australia until 1996, usin g mandatory on-shore ethylene dibromide (EDB) 
treatment for control of fruit flies.  Import of mangoes from India ceased as a result of the withdrawal of EDB as a post-harvest disinfestations treatment in Australia.    
May we request Australia to inform how to resume export of Indian mangoes to Australia? 
 Q 2. We have also received reports of problems being faced by Indian exporters of cut flowers. 
 May we request Australia to inform  of the steps taken to facilitate export of cut flowers from India to 
the country? WT/TPR/M/178/Add.1 
Page 58  
 
   
Market access issues  
Q 3. We have been informed recently that Au stralia's Quarantine Authority-- Biosecurity 
Australia-- has conducted an Import Risk Analysis  for prawns and Prawn Products with draft 
recommendations for tightening import controls.  These draft recommendations amount to trade 
barriers. 
 We request Australia not to take such steps whic h hinders the exports of these products from India to 
Australia.  Services Issues 
Q 4. Mutual recognition of services (which at present is not recognized in Australia).  For purpose 
of trade in Services between the two countries all Ju ridical Persons registered in Australia or India 
should be allowed practice irrespec tive of ownership or control. 
 
Could Australia please clarify this issue?  
 Q 5. We have been informed that there is a requirement of minimum salary for IT professionals of A$ 57,300/- to be paid to IT professionals from fo reign countries.  This represents a 60% increase in 
the minimum salary requirement in four years.  Further, this is much higher than the minimum salary requirement for professionals in all other categories (A$ 41,850/-).     
 
Could Australia please clarify the issue and lower this minimum salary requirement?  Q 6. There are stringent immigration norms (rest ricting movement of businessmen from India in 
Australia). We have been informed that Austra lian visa norms/immigration rules are very stringent 
and this is hindering the business travel. The visa procedures for Indians traveling to Australia are 
cumbersome and unsatisfactory.  For instance the Australians require production of Income Tax and 
bank statements even in respect of business visitors, whereas if we were to ask for these in respect of 
Australian visitors they would perhaps site Aust ralian privacy laws.  These documents are asked for 
even in respect of repeat visitors.   
May we request Australia to inform the steps it pr oposes to take to facilitate travel by the Indian 
business community to Australia to promote trade and investments between the two the countries.    Q 7. In February 2001, arrangements were made by the Australian Government to allow easier 
travel of IT professionals from overseas countries in cluding India.  On 16 July 2002, the Australian 
Government announced suspension of priority visa processing arrangements for Information and 
Communication Technology (ICT) workers.  It is f eared that the new visa regime would have an 
adverse impact on movement of IT professionals/pers onnel, who may be required to visit Australia at 
short notice in connection with their on-site assignme nts on behalf of their Indian software employer 
firms or on behalf of their Australian IT  employ er firm(s) as services providers/IT professionals.   
 
We request Australia to inform of the situation in  respect of priority visa processing arrangements for 
information and communication technology (ICT)  workers/professionals from overseas including 
India.  Q 8. The horizontal limitation regarding restricti on of foreign investment subject to “national 
interest” considerations as committed by Australia in its the GATS schedule of specific commitment 
is not only restrictive but overtly discretionary.  WT/TPR/M/178/Add.1 
 Page 59 
 
 
  We request Australia to inform what would be cons idered national interest in respect of Australia’s 
Mode 4 commitment?   Q 9. Educational services constitute a growing in ternational business for Australia. Since the 
beginning of the 2000, the number of Indian stude nts studying in Australia has more than doubled, 
meaning that there are currently some 25000 Indi an students enrolled in Australian colleges and 
universities.   Will Australia please the tuition fee payable by Indi an students and how is it calculated? Does the 
tuition fees vary depending on the nationality of the stude nt? Will Australia consider giving merit 
cum-needy scholarships to Indian students, given that  a number of Indian students have to take hefty 
loans?  Q 10. Foreign banks operating as branches in  Australia can only accept deposits exceeding 
A$250,000 and this restriction is intended to pr otect retail depositors, as foreign bank branch 
operations are subject to more liberal regulatory re quirements. Further, such a high limit ensures that 
no bank, at least from a developing country can set up shop because of an almost scenario where deposits would be negligible.  We request Australia to explain the rationale behind the application of different regulatory 
requirements to foreign bank branches from those applied to domestic banks.  Would Australia 
consider doing away this limitation for developing countries?  
 
ADDITIONAL QUESTI ON FROM INDIA
 
Q . We have been informed that Indian IT companies are not allowed to have access to the 
Government contracts on par with Australian companies. 
We request Australia to allow the Indian IT comp anies access to Government contracts on par with 
Australian companies. 
PREGUNTAS DE BOLIVIA  
 Documento del Gobierno WT/TPR/G/178  
II. Entorno Económico, ii) Reformas, parágrafo 8  
Menciona que: “el Gobierno australiano ha implan tado grandes reformas del sistema de relaciones 
laborales concebidas para dar una mayor fl exibilidad al mercado de trabajo”.   
 
Pregunta
:  
 ¿Cómo ha mejorado la situación de los trabajadores en relación con la productividad de las empresas 
en general y de los exportadores en particular? ¿Cóm o es la situación de los trabajadores migrantes y 
cuales son las políticas de seguridad social para este grupo en particular? 
 
II. Entorno Económico, ii) Reformas, parágrafo 9  
Se menciona  que “el Consejo de Gobiernos Australianos,  convino un Programa Nacional de 
Reformas  para aumentar la competitividad de Au stralia y la participación en la vida activa, que 
abarcará reformas de la educación y la capacitación, así como reformas en las esferas de la energía, el 
transporte y la infraestructura”.   
 WT/TPR/M/178/Add.1 
Page 60  
 
  Pregunta
: 
 ¿Cuáles son las metas  que las reformas de edu cación y capacitación pretenden alcanzar y en cuanto 
tiempo?.  
 
Documento de la Secretaría WT/TPR/S/178 
 Capítulo II El Régimen de Política Comercial: Marco General  y Objetivos, 6) Acuerdos y 
arreglos comerciales, ii) Acuerdos preferencial es y regionales, parágrafos de 31 y 32. 
 
En el Marco de la AUSTFA Australia  consolidó una lista negativa para  lograr restricciones sectoriales 
que le permiten supervisar las  inversiones de Estados Unidos que  estén por encima de determinados 
umbrales.  
Pregunta
: 
 
¿Cuáles son esos umbrales y cuál su tiempo de aplicación? ¿Qué potestad  tiene la supervisión ejercida 
por Australia y cuál es el fundamento para la aplicación de esta Lista Negativa?  
 
Capítulo II El Régimen de Política Comercial: Marco General  y Objetivos, 7) Régimen de 
Inversiones Extranjeras, i) Visión General, parágrafo 35.  
 En el documento se menciona que  el régimen de inversiones extranjeras en Australia es en general 
transparente y liberal, si bien incluye restriccione s al capital extranjero en determinados sectores 
"sensibles", así como un procedimiento de supervisi ón para garantizar que la inversión extranjera no 
sea contraria al "interés nacional".   
 
Pregunta
: 
 
¿Cuál es la posición de Australia, respecto a la aper tura a la inversión extranjera directa en sectores 
tales como el de servicios básicos (agua, alcant arillado y otros)¿ Existe algún tipo de limitación o 
condiciones específicas?  Capítulo II El Régimen de Política Comercial: Marco General  y Objetivos, 7) Régimen de 
Inversiones Extranjeras, i) Cambios en el  marco de las polític as, parágrafo 37.  
 
Se menciona que Australia brinda un trato preferenci al, a partir del Tratado de Libre Comercio con los 
Estados Unidos, a los inversores provenientes de este último país  
 
Pregunta 
 
 
¿No se estaría vulnerando otro tipo de acuerdos come rciales regionales o bilaterales y por lo tanto 
produciéndose en la práctica una discrimin ación con otros socios comerciales?  
 Capítulo III Políticas y Prácticas Comercial es por Medidas, 3) Medidas que afectan 
directamente las exportaciones, iv) Asistencia a la  exportación, a) Plan de Subvenciones para el 
Desarrollo de los Mercados de Exportación (EMDG), parágrafo 79. 
 se indica que la EMDG puede otorgar hasta 7 subve nciones de 150.000 Dólares Australianos, lo que 
representa que un productor puede recibir hasta 1. 050.000 Dólares Australianos por año a empresas 
con un nivel máximo de ingresos de  30.000.000 de Dólares Australianos. 
  WT/TPR/M/178/Add.1 
 Page 61 
 
 
  Pregunta : 
 ¿Se podría entender que un productor puede recibir en subvenciones un alto porcentaje del monto de 
sus exportaciones?, ¿o existen mecanismos para de terminar hasta que porcen taje de subvenciones 
pueden ser asignadas al exportador? De ser afirmati va la respuesta, ¿Se puede explicar cuales son 
estos mecanismos que determinan los parámetros qu e definen el porcentaje de subvención que se le 
otorga al exportador?  
Capítulo III Políticas y Prácticas Comercial es por Medidas, 3) Medidas que afectan 
directamente las exportaciones, iv) Asistencia a la exportación, e) Financiación, garantías y 
seguros de exportación, parágrafo 87.  
Señala que la Corporación de Financiación y Se guros de las Exportaciones (EFIC), tiene como 
principal función suministrar diversos servicios de  financiación, seguro y garantía a las empresas 
australianas de exportación o inversión en el ex terior y que EFIC interviene cuando el mercado 
comercial no puede o no quiere prestar apoyo a las empresas australianas.  
 Pregunta
:  
 ¿Las condiciones en las cuales la EFIC otorga sus serv icios de financiamiento, seguro y garantía a las 
empresas australianas son en las mismas condiciones en  las cuales el empresario australiano obtendría 
estos servicios en el sistema comercial privado, o estas se otorgan en condiciones más ventajosas?  
 ¿Cómo aplica para EFIC la frase “no puede o no quiere prestar apoyo a las empresas australianas” en el caso de las entidades privadas que prestan servicios similares al EFIC?   Capítulo  III Políticas y prácticas comerciales por medidas, 4)
 Medidas que afectan a la 
producción y el comercio, iii) Política de competencia y consumo a) Política de competencia, Marco General, parágrafos 106 y 123 
 
Hace referencia a que las empresas públicas compiten con las privadas en igualdad de condiciones, en 
el parágrafo 123 se indica que “Dichas empresas deben cubrir todos sus costos o una parte sustancial 
de ellos.” 
 
Pregunta
: 
 ¿Si es que las empresas públicas y las privadas, comp iten en igualdad de condiciones, por qué en el 
párrafo 123 se menciona que las empresas sust anciales deben cubrir todos sus costos o parte 
substancial de éstos? 
 
¿Esto no daría a entender que las empresas gubernamen tales reciben cierto apoyo del gobierno, lo 
cual contradeciría lo estipulado en el in forme de la secretaria en párrafo 106? 
 
 
 WT/TPR/M/178/Add.1 
Page 62  
 
  ADDITIONAL WRITTEN QUESTION S AND FOLLOW-UP QUESTIONS 
SECOND DAY OF THE MEETING 
 
UNITED STATES
 
 
We appreciate the explanation in regard to ame nding the Food Standards Code to accommodate third-
country partners seeking products approval for f oods using biotechnology on p. 43 of your written 
answers, but we had the understanding that steps would first need to be taken for assessment and 
approval by FSANZ of imported foods using biotec hnology.  What is the process by which third-
country trading partners may seek FSANZ product asse ssment, and is information on these procedural 
steps publicly available? 
ADDITIONAL WRITTEN QUESTION BY JAPAN  
 
Report by the Secretariat (WT/TPR/G/178)  III. TRADE POLICIES AND PRACTICES BY MEASURE (4) MEASURES AFECTING PRODUCTION AND TRADE 
(i) Taxation 
(c) International tax reforms  
(paragraph 97-98, page 61) 
 As to Australia's international tax reform described in the Secretaria t report, a number of investors and 
importers point out that the Australian authorit y’s practice of the taxation on transfer pricing 
adversely affects corporate activities in light of f acilitating trade and investment. This is due to the 
fact that the Australian tax law does not contai n any provision of the duration for retroactive 
corrective measures on transfer pricing.  
(1) Please explain the specific view regarding the negative effect on trade and investment caused 
by such transfer price taxation?  
(2) Japan would like to be informed whether th e Government of Australia has any plan to 
introduce a provision of the duration for retroac tive corrective measures on transfer pricing. 
 
JAPAN’S FOLLOW-UP QUESTIONS (2
ND DAY)  
 
1. AUSFTA (Australia’s reply in page 7-8) 
 
To what extent (percentage) do "the remaining agricultural lines" (on which tariffs will not be 
eliminated within ten years after the entry into  force of the AUSFTA) account for in Australia's 
exports to the US on a trade value basis? 
 
2. MRAs (Australia’s reply in page 29-30)  
Although the answer from the Australian government re fers to mutual recognition arrangements in the 
field of testing laboratories, our question also co vers certification bodies. In this regard, please 
provide information on the following questions.  
(1) Japan would like to be informed whether Australian regulatory authorities can directly 
designate certification bodies outside of Australia based on Australian law.   WT/TPR/M/178/Add.1 
 Page 63 
 
 
   
(2) If there is no such system, Japan would like to  know whether Australia has legal provisions 
that make it impossible to designate certification bodi es outside of Australia. Furthermore, what is the 
logic or background behind those provisions? 
 (3) Regarding the field of testing laboratories, Jap an would like to confirm that Australia does not 
have such a system in domestic laws, but Austra lian regulatory authorities accept test reports from 
testing laboratories outside of Australia, based on MoU (Memorandum of Understanding) between the 
government of Australia and NATA. 
 
3. State Trading (Australia’s reply in page 59-60) 
 According to the answer, the Minister for Agricultu re has the power to direct the WEA to refuse an 
application for bulk wheat exports.   
Please explain in which cases the application fo r export is refused and the rationale for it? 
 
4. Investment Policy in resources and energy sectors (Australia’s reply in page 94-95) 
 
According to the answer regarding the Australia n investment policy, should a doubt or a problem 
arise concerning exploitation and de velopment of mineral resources, it is with the relevant State or 
Territory Government in the first instance that a proponent of the exploration should raise the 
problem. For this point of view, Japan would like Australia to reply to the following questions.   
 (1) If a State or a Territory Government cannot resolve the problem, what can the proponent do?  
 
(2) What can the government of a home country, from where the proponent originates, do to 
resolve the problem? 
 
5. Telecommunications policy (Australia’s reply in page 120-121) 
 
Japan asked Australia to explain whether the na tionality requirement of the chairperson and the 
majority of the board members of Telstra are still stip ulated in the Telstra law, and what reservation in 
the Australian revised offer in the services negotiati ons corresponds to these requirements. Australia 
answered that the Australian Government is cons idering revising its GATS offer to reflect the full 
privatization of Telstra. In this regard, Jap an would like to clarify the following points. 
 (1) Are there any considerations to revise the pr ovision of the Telstra Corporation Act, which 
stipulates these nationality requirements? If it is th e case, please indicate the outline and schedule of 
the revision.  (2) What sort of reservation in the Aust ralian schedule of commitment under the GATS 
corresponds to these nationality requirements?  
 
 WT/TPR/M/178/Add.1 
Page 64  
 
  REPLIES PROVIDED BY AUSTRALIA 
 
 
CHAPTER 1.  ECONOMIC ENVIRONMENT
 
 
Labour market reforms  
 
Bolivia:  
 
Question (Paragraph 8)  The Report states that "the Australian Government  has introduced major reforms to the workplace 
relations system, designed to increase flexibility in the labour market". 
How has the situation of workers improved in relatio n to the productivity of companies in general and 
of exporters in particular? 
 
Answer: 
 Labour market reform commenced in Australia in  1991, with the move to enterprise bargaining. 
Enterprise bargaining began to b ecome widespread in 1993.  Data  from the Australian Bureau of 
Statistics (ABS) National Accounts (Cat No 5206.0) shows that between December 1993 and December 2006 trend labour productivity in Australia' s market sector grew by 2.3 per cent per year, 
while real wages grew at an annua l average rate of 1.8 per cent over the same period.  Information on 
the productivity performance and wages growth for export companies is not separately available. 
 The Australian Government believes that an ope n global labour market best serves its economic 
interests, and is committed to policies that prom ote flexibility in the workplace.  Its workplace 
relations policies have simplified the awards-based  system and given people in Australian workplaces 
greater choice in negotiating flexible and innovative working conditions.   
 
Employment is now at a record level in Austra lia, with 10.4 million people employed in March 2007 
and the unemployment rate below five per cent for th e first time in 30 years.  Total employment in 
Australia increased at a compound annual average growth  rate of 2.1 per cent in the 10 years to March 
2007.  The labour force participation rate for th e population aged 15-64 years rose from 74.1 per cent 
in March 1997 to 76.3 per cent in March 2007, wh ile the employment-to-population ratio for the 
population aged 15-64 years rose from 67.5 per cent to 72.7 per cent during the same period.    
Question: 
 What is the situation with regard to migrant worker s and what social security policies exist for this 
particular group?  
Answer: 
 
Australian Government legislation requires that a ll migrant workers (including permanent migrants 
and temporary visa holders with work rights) must be engaged in accordance with Australian 
standards and conditions of employment.  Th is includes industrial instruments (salary), 
superannuation, workers’ compensation, occupational health and safety, taxation, equal employment 
opportunity and anti-discrimination provisions.  Temporary migrant workers are affo rded the same level of protection in the Australian labour market 
as Australian citizens and permanent residents.  The Australian Government, through the Office of  WT/TPR/M/178/Add.1 
 Page 65 
 
 
  Workplace Services, investigates all claims relating to the exploitation and/or under-payment of 
migrant workers.  Access to Australia’s social security benefits is limited to Australian citizens and permanent residents 
who have served the two year newly arrived resi dents’ waiting period.  The waiting period does not 
apply to refugee and humanitarian visa holders. 
 
Question: 
 The Report states that "the Council of Australian Governments ... 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 infrastructure". 
What are the aims and timeframe of the education and training reforms?  Answer: 
 
The COAG reforms announced on 10 February 2006 ai m to help address Australia’s skills needs by 
remedying many long-standing barriers to the efficiency of training in Australia.  The Australian Government is providing funding of $A 64.3 million over 4 years to contribute to cooperative action with the Australian states and te rritories to implement a new genuinely national 
approach to apprenticeships, training and skills recognition agreed by COAG on 10 February.  This 
approach encompasses a range of initiatives to:  
• ensure a more mobile workforce; 
• promote more rapid skilling; 
• strengthen regions; 
• provide better skills information; and 
• consider other measures to make the traini ng system more responsive and effective. 
 The initiatives are being implemented in consultati on with key stakeholders (including industry, 
employers, regulators and unions) and aims to alle viate skills shortages curr ently evident in some 
parts of the Australian economy.  Prominent unde r these initiatives are reforms to enable people 
working in six key licensed trades (electricians, plumbers, motor mechanics, refrigeration and air conditioning mechanics, carpenters and joiners, and brick layers) to move between states and 
territories more easily, without the need to meet  additional occupational testing and registration 
processes.  These reforms will be introduced for th e six trade areas by 30 June 2007, and for all 
licensed occupations by the end of 2008. 
 The reforms will also make it easier for skilled migr ants to commence work on arrival in Australia 
without the need to undergo additional skills assessme nt.  An initial focus will be the six key licensed 
trades referred to above, and applicants from the fi ve priority countries from which Australia draws 
skilled migrants, these being India, United Kingdom, S outh Africa, Sri Lanka and South Korea.  This 
will be implemented by the end of 2008. 
 In addition, to enable apprenti ces and trainees to gain qualificati ons more rapidly, all Australian 
governments agreed to allow trade qualifications to be awarded as soon as competency is demonstrated to industry standards, rather than on a time-served basis.  This reform was achieved by 
end December 2006.  COAG also agreed to reforms to  remove all legislative, regulatory and industrial 
barriers to school based apprenticeship s in all states and territories.  This was achieved by all states 
and territories by end December 2006.  WT/TPR/M/178/Add.1 
Page 66  
 
  To ensure and assure the quality of outcomes from the training system, COAG agreed to accelerate 
the introduction of a national outcomes-based a uditing model and stronger outcomes-based quality 
standards for registered training organisations.  This is being addressed in consultation with key 
parties, including employers, regulators and unions.  
All training packages are to include skill sets where the need has been identified by the Industry Skills 
Councils.  The COAG work is scheduled to be comp leted by 2008.  To ensure that certification of 
skill sets are meaningful for industry and worker s, COAG recommended that a new look “Statement 
of Attainment” be in place by December 2006 so th at skill sets certification can be more effectively 
recognised nationally.  This work was take n forward though the National Quality Council. 
 
COAG also agreed that further work on reform s be undertaken to examine ways in which the 
vocational and technical education system will conti nue to enhance its contribution to the Australian 
economy.  A Training Reform Taskforce has b een established to progress this initiative. 
 
Chinese Taipei:
 
 Question: (Paragraph 18) 
 
We note that the Australian government is making e fforts to reform the labour market in order to 
increase its flexibility. Further information regarding  specific aspects of its efforts and programme 
would be appreciated: 
 Are the main goals of the labour market reform sole ly to increase workforce participation and labour 
market flexibility? How does Australia  deal with employment secur ity issues arising from labour 
market flexibility?   
Answer:  
Both the “Welfare to Work” and “WorkChoi ces” policies are aimed at increasing workforce 
participation and labour market flexibility as a mean s of assisting the Australian economy become 
more productive and internationall y competitive.  In order for a country like Australia – a developed 
nation with an ageing population - to remain ec onomically competitive it is necessary to expand the 
labour force, embrace flexible workplace relations  policies and maintain productivity gains.  The 
Australian Government’s workplace relations and workforce participation reforms are aimed at 
ensuring more people have access to employment and that the labour market is sufficiently productive 
and flexible.  The Australian Government cons iders that macroeconomic stability, increased product 
market competition and labour market deregulati on create the necessary environment for increased 
labour productivity. WorkChoices enhances intern ational competitiveness by promoting simpler 
workplace bargaining, thereby allowing business to link wage increases and improvements in 
conditions of employment to productivity gains. 
 
The Australian Government’s recent labour  market reforms introduced by the Workplace Relations 
Amendment (WorkChoices) Act 2005 continue to provide employment security for workers covered 
by the Federal framework.  
 
Continued Protection from Unlawful Termination
 
 
Under the amendments all employees remain protected from unlawful termination on a number of 
discriminatory grounds including sex, race and on the grounds of union membership.  In addition, 
employees in businesses with more than 100 employees are protected against dismissal on harsh,  WT/TPR/M/178/Add.1 
 Page 67 
 
 
  unjust or unreasonable grounds.  Access to state and fe deral anti-discrimination legislation, which also 
protects workers in employment, has also  been maintained by the reforms.  
 
Redundancy Protections  
 Employees may have an entitlement to a payment in  the event they are te rminated because of 
redundancy if there is an industrial instrument or contract of employment that provides for it.  
WorkChoices introduced safeguards for agreement based redundancy entitlements by preserving these 
entitlements for twelve months after an agreement is terminated.  
 In addition, redundancy provisions cannot be simply written out of agreements where they currently 
exist.  There must be agreement between the empl oyee and employer and where this occurs there is 
often trade offs for other benefits.  
Compliance Regime
 
 These legislative reforms have also been supporte d by strong compliance regime, with a separate 
executive agency, the Office of Workplace Services , being provided with increased resources and 
legislative powers to ensure compliance and th e ability to prosecute for breaches of the Workplace 
Relations Act 1996. 
 
Question: 
 
Please provide further information on the “Welfare  to Work” programme. In addition, what other 
measures is Australia taking to  increase labour force participation? 
 
Answer: 
 
The Australian Government’s Welfare to Work Reform s were introduced in order to make the welfare 
system more sustainable whilst retaining a strong saf ety net.  The aim of these reforms is to increase 
workforce participation for those with a capacity to work.  The reforms focus on four priority groups: 
people with a disability, parents, mature age pe ople and the very long-term unemployed.  The 
Australian Government considers paid work to be the key to economic well-being and the most 
effective way to alleviate poverty, increase equality an d promote social integration.  Welfare to Work 
reforms include changes to payments and work in centives, workforce participation requirements, and 
employment and related services.  Welfare to Work  also includes strategies to work with and assist 
employers in encouraging flexible working arrange ments and employment of people from the priority 
groups. 
 
Question: 
 Apart from the “Work Choices Act”, is Australia taking any other measures to increase its labour 
market flexibility?  
Answer: 
 On 1 March 2007 the independent contractors laws come into effect [ Independent Contractors Act 
2006  and Workplace Relations Legislation Amendm ent (Independent Contractors) Act 2006 ].  The 
laws protect the status of independent contrac ting by giving independent contractors greater 
flexibility in how they run their business.  This  legislation protects the rights of independent 
contractors and allows them to choose the form of working arrangements that best suits their 
particular needs.  The legislation includes a range of protections for vulnerable workers.  It protects 
genuine employees from ‘sham’ contracting arrangements where an employer seeks to disguise a WT/TPR/M/178/Add.1 
Page 68  
 
  genuine employment relationship as an independent contracting rela tionship and prevents employers 
from threatening or deceptive behaviour aimed at making employees change their status to independent contractors.  There will be a three year transitional period to gi ve business and workers time to adjust to the new 
legislation. 
 
Question: 
 
In May 2005, Australia submitted its revised offer re garding its commitments in Mode 4. What is the 
relationship between this revised off er and its labour market reform policy? 
 
Answer:  
There is no direct relationship between Australia’s  GATS Mode 4 offer and Au stralia’s labour market 
reform policy.  Australia’s Mode 4 offer direc tly responds to requests from trading partners to 
improve commitments on the temporary entry of services suppliers.   
 
EC:
 
 Question: 
(Paragraph 20) 
 The Australian report states that the "Government believes that a healthy, skilled, and motivated 
population is critical to workforce participation an d productivity", and that under the New National 
Reform Agenda, reform in human capital includes he alth promotion, educa tion and training, as well 
as labour-market reforms to encourage workforce participation."  
 Does Australia have any policies to address the specific effects of more open global trade on labour 
market adjustment?  Answer: 
 
Australia has enjoyed a decade and a half of uninterrupted economic growth.  The Australian 
Government’s reforms since 1996 have delivered an economic climate of low inflation and interest 
rates, and an unemployment rate below five per ce nt for the first time in 30 years.  Employment is 
now at a record level in Australia, with 10. 4 million people employed in March 2007 and the 
unemployment rate below five per cent for the first ti me in 30 years.  There are now also more than 7 
million Australians in full-time work.  The Australian Government believes that an ope n global labour market best serves its economic 
interests.  Firms must be able to structure their en terprises as they see fit in or der to operate efficiently 
and effectively.  This flexibility is important in enabling domestic firms to remain competitive with 
overseas firms and also to encourage overseas firms to operate in Australia (thereby providing 
employment opportunities for Australians).  Acco rdingly, the Government is committed to the 
policies that promote flexibility in the workplace.    The Government’s workplace relations policies have simplified the awards-based system and given 
people in Australian workplaces greater choice in  negotiating flexible and innovative working 
conditions.  Over the last decade, the labour for ce participation rate for the population aged 15-64 
years rose from 74.1 per cent in March 1997 to 76.3  per cent in March 2007, while the employment-
to-population ratio for the population aged 15-64 years rose from 67.5 per cent to 72.7 per cent during the same period.  WT/TPR/M/178/Add.1 
 Page 69 
 
 
   
An economic system that is as open and as flexible as Australia’s facilitates changes in the structure 
of industry and employment, while enhancing growth in the economy.  These structural changes, attributable to technological adva ncements and other factors, have resulted in an increase in the 
services sector employment and a decline in employment in the manufacturing sector.  Total 
employment in Australia increased at a compound annual average growth rate of 2.1 per cent in the 
10 years to March 2007.  Over this period, employment in the services
4 sector grew at a compound 
annual average rate of 2.5 per cent, while empl oyment in the manufacturing sector declined at a 
compound annual average rate of 0.6 per cent.  
Australia benefits significantly from foreign invest ment, which is nearly twice the level of offshore 
investment by Australian firms.  This is a major benefit of pursuing policies that promote flexibility in the workplace.  The A.T. Kearney Foreign Direct Investment Confidence Index (2005)  reveals that 
Australia is the world’s eighth most attractive destin ation for foreign direct investment and the third 
most popular destination in Asia, behind China and India.  Question:  
How does Australia strike the balance between more labour flexibility and basic labour rights, 
particularly in trade-related sectors?  
 
Answer: 
 The Australian Government’s recent labour market reforms introduced via the Workplace Relations 
Amendment (WorkChoices) Act 2005 continue to provide employment security for workers covered 
by the Federal framework.  By allowing increased  labour market flexibility, the WorkChoices reforms 
seek to strike a better balance between employee and employer rights.  There is a continued 
commitment to providing employee protections against unlawful termination on discriminatory 
grounds as well as continued unfair dismissal prot ection (that is dismissa l on harsh, unjust or 
unreasonable grounds) for employees in businesses with over 100 employees.   
In addition to these protections, the WorkChoices refo rms also introduced for the first time a safety 
net of working conditions for all employees under th e Australian Fair Pay and Conditions Standard 
(the Standard).  Unlike the pre-reform award sy stem, the Standard enshrines minimum employment 
standards relating to minimum and classification wa ges, hours of work and various forms of leave 
including annual, sick and maternity  leave that cannot be bargained away or undercut in a workplace 
agreement.  
 The Australian Government recogni ses a legitimate role for unions within the workplace relations 
system.  All employees are covered by the freedom of association provisions in the Workplace 
Relations Act 1996  which protect the freedom of individual workers to choose to join or not join a 
union, and protect them from discrimination or vi ctimisation.  Collective agreements, both union and 
non-union, continue to be available following the reforms and unions retain the right to represent 
employees in Australian Workplace Agreement negotia tions, if that is what the employee wants. 
 
                                                     
 
 4 Service sector excludes agriculture, forestry and fishing; mining; manufacturing; construction; and 
electricity, gas and water supply.  The employmen t estimates are in seasonally adjusted terms. WT/TPR/M/178/Add.1 
Page 70  
 
  Japan:
 
 (Paragraph 19) 
 
According to the Secretariat report, the Work Choices Act was implemented in March 2006 to 
increase labour market flexibility. 
 
Please explain impact of the Act on labour-management relations hereafter.  
 
Answer:  
High levels of industrial disputes in the past acted as a major disincentive to investment and adversely 
affected the productivity and international competi tiveness of Australian business.  In recent years, 
however, industrial disputes in Australia have declined significantly, benefiting the Australian 
economy.  While forming part of an OECD-wide trend, these declining rates of industrial disputation in Australia have coincided with the introduction of enterprise bargaining and other significant labour 
market reforms implemented by the Australian Government.  Under the Workplace Relations Act 
1996 , there remains a right to take protected industria l action, but limited to certain instances where 
collective agreements are being negotiated.  This can help to prevent damaging widespread industrial 
disputes.  The recent WorkChoices reforms have further improved access to remedies for unprotected industrial action, while the Building and Constructi on Improvement Act 2005  and the newly 
established Australian Building and Construction Commi ssioner helped secure a dramatic decline in 
Australian construction industry disputation in 2006.   
 
Developments in trade and foreign direct investment
 
 
China:  
 
Question: (Paragraph 29)  According to the Secretariat Report, the share of FDI Australia received in the manufacturing sector 
declined from 38.9% in 2004 to 19.3% in 2005. 
  
In Australia’s view what are the c auses leading to this sharp decline?  
 Answer:  
According to the Australian Bureau of Statistics (ABS), the large decline that occurred in foreign 
direct investment in the manufacturing sector in 200 5 was due to a large corporate group restructuring 
(for confidentially reasons, the ABS cannot  mention which company).  The restructuring resulted in a 
transfer of Australian subsidiaries to the rest of th e world.  In addition, this restructuring took place 
over the 2004 and 2005 period, making it difficult to interpret manufacturing’s share of foreign direct 
investment over this period.   
  WT/TPR/M/178/Add.1 
 Page 71 
 
 
  CHAPTER II.  TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES  
 Trade laws and regulations
 
 
Argentina  
 Question: (Paragraph 10)  
Could Australia explain why there was an increase in the number of regulations?  What were the 
main areas involved?  What, if any, were the main findings of the taskforce?  Have they begun to be 
implemented?   
 
Answer: 
 The growth in regulation in Australia mirrors deve lopments in other countries and is driven by a 
variety of forces:  
- a lower tolerance within the community to risks that arise in daily life has placed 
greater pressures on governments to regulate to provide certainty; 
- rising income levels in Australia have  brought increased demands on government to 
address social and environmental goals; and  
- some recent economic reforms have necessitated an increase in (or new forms of) 
regulation.   
 
Compounding these natural pressures for increasing regulation, government regulation-making 
processes have in the past been di ffuse, with regulation being developed without sufficient regard to 
other regulatory developments and the cumulative e ffect of regulations over time.  The growth in 
regulation has applied broadly across all sectors of the Australian economy.  The Banks Taskforce’s 178 recommendations comprise: 
 
- 145 recommendations for reforms/reviews of  existing regulation.  The Taskforce 
recommended specific reforms in the area s of health, labour market, consumer, 
environmental and building, corporati ons and financial services, taxation, 
superannuation, and trade regulation.  In re lation to trade, the Taskforce made eight 
recommendations including reviews of anti-dumping policy and administration, 
wheat marketing arrangements, inwards fore ign investment approval thresholds and 
administration of the ‘.com.au’ domain name. 
- 4 recommendations to streamline the admi nistration of regulation.  These proposals 
relate to improving the administration of  information collected from business by 
government and facilitating access by business to information about government. 
- 29 systemic reforms aimed at improving regulation-making arrangements.  These 
proposals relate to strengthening regulation-making processes, including assessment of the compliance costs and restrictions on competition that will be associated with proposed regulations 
 
As noted in the Secretariat Report, the Australian G overnment accepted, either in full or in part, 158 
of the Banks Taskforce’s recommendations.  Implem entation of the Government’s response to the 
Banks Taskforce is well underway, with over 50 of  the Government’s commitments made in the 
Government’s response fully implemented.  WT/TPR/M/178/Add.1 
Page 72  
 
  Progress of the implementation of the remaining commi tments made in the Government’s response is 
being monitored by the Government at Cabinet level.  A copy of the Government’s response to the Task force’s report is available on the Australian 
Treasury’s website at:  www.treasury.gov.au.    Trade policy objectives
 
 
Chile:  
 
Question: 
 Australia has signed free trade agreements with Thailand, Singapore and the United States. Only in 
the case of the agreement with th e United States was the issue of environment addressed specifically 
by including a chapter of environment, and negotiating subsequently a joint declaration on 
environmental cooperation. 
 In the negotiations underway between ASEAN, Au stralia and New Zealand, we understand that the 
latter is in favour of addressing the issue of envir onment in the negotiations, but that Australia is 
opposed.  
We are interested in understanding the position of Australia on this matter and the reasons behind it. 
 Answer:  
Australia’s policy on the inclusion of environment provi sions in free trade agreements is that there are 
other, more suitable instruments available to address environmental issues.  
 The Australia-United States FTA, like all such agre ements, is the result of a negotiation process.  
While it does include an environment chapter, it is  worth noting that the provisions contained do no 
more than require both parties to apply their existing domestic regulations in this area.  
 EC:
 
 Question:  What mechanisms does Australia have in place to ensure adequate coordination of environmental 
policy and trade policy?   
Answer: 
 
Australia has established processes to ensure a whole-of-government approach to all policy 
development and implementation, including in relation to environmental and trade policy.  The 
Government agency responsible for a particul ar policy will consult with all other relevant  Australian 
government departments and State and Territory governments where appropriate.  Departmental 
representatives contribute their views to the de velopment of an Australian position through an 
interdepartmental committee proces s.  Information is shared between departments through this 
process and the different policy perspectives and knowledge of existing commitments that 
departmental representatives bring to the discussi on contribute to a unified whole-of-government 
position on these issues.  The EC may find useful  an Australian paper (TN/TE/W/45), submitted to 
CTESS in October 2004, which outlines the mechanisms  in place to achieve national coordination of 
Multilateral Environment Agreements containing sp ecific trade obligations, and provides practical 
examples of these mechanisms in practice.  WT/TPR/M/178/Add.1 
 Page 73 
 
 
  Preferential and regional trade agreements  
 Bolivia: 
 
 Question: 
 
In the framework of the Australia-United St ates Free Trade Agreement (AUSFTA), Australia 
submitted a negative list under which it took out sect oral restrictions enabling it to screen investment 
from the United States above certain thresholds.  
What are these thresholds and what is their period of  application?  What weight does the screening by 
Australia carry and what is the basis for the application of this negative list?  Answer: 
 Investment commitments in the AUSFTA are ba sed on the negative-list approach, whereby all 
investment sectors are subject to commitments excep t those included in a list of reservations.  One of 
these reservations covers Australia’s Foreign Invest ment Policy and provides preferential treatment to 
US investors under this policy, in particular higher thresholds for screening of US investments proposals in non-sensitive sectors and the removal of  screening of US new business proposals.  The 
AUSFTA provides for the indexation of certain  thresholds on 1 January each year.   
 
In line with Australia’s obligations under the AUSFTA:  
- the asset value threshold applying to US investors in non-sensitive sectors is currently 
$871 million (and is indexed annually). 
- investments in sensitive sectors are subject to a threshold of $100 million as are 
investments by the US Government 
- the asset value threshold applying to US  investors in established non-residential 
commercial real estate is currently $ 871 million (and is indexed annually). 
- investments by US investors in financial sector companies, as defined by the 
Financial Sector Shareholdings Act 1998, are not subject to approval under the 
FATA. 
 Australia operates a transparent foreign investment screening regime to ensure that acquisitions of 
significant Australian businesses are not contrary to the national interest.  The national interest in relation to a particular applica tion is determined by the Treasur er.  Key considerations include 
national security and economic development.  Howe ver, the general presumption is that foreign 
investment proposals will generally serve the nationa l interest.  The Treasurer must establish that a 
foreign investment proposal would be contrary to th e national interest in order to block the proposal. 
 
EC:
 
 
Question: 
(Paragraph 30)  The report states that the Thailand – Australia F ree trade agreement (TAFTA) , entered into force in 
2005, takes a positive list approach in scheduling commitments on services and investment. 
 
Could Australia elaborate on the contents of the investment commitments agreed upon in TAFTA. 
What are the major differences in  comparison with SAFTA described  in paragraph 27 and AUSFTA 
described in paragraph 32 as regards investment?  WT/TPR/M/178/Add.1 
Page 74  
 
  Answer: 
 
The TAFTA investment commitments are based on a positive-list approach, where key obligations of 
national treatment and market access apply to the in vestment sectors explicitly included in a country’s 
schedule of commitments.  In contrast, investment commitments in the SAFTA and AUSFTA are 
based on the negative-list approach, where all invest ment sectors are subject to commitments except 
those included in a list of reservations.  The Main Differences in the Investment Commitments
 
 
The investment protection provisions in TAFTA, SAFTA and AUSFTA are largely the same.  One of 
the main differences is the absence of investo r-State dispute settlement provisions in AUSFTA 
whereas they are present in TAFTA and SAFTA.  AUSFTA also includes more substantial commitments on transfers and performance requirements than TAFTA and SAFTA.   
AUSFTA, SAFTA and TAFTA both include national tr eatment provisions, however, AUSFTA is the 
only FTA to include an MFN provision.  Under both TAFTA and SAFTA, if one Party enters into an 
agreement with a non-party on investment that pr ovides more favourable treatment than provided 
under the respective FTA, that Party has agreed to consider a request from the other Party for the 
incorporation into the FTA of the more favourable treatment.  
The Main Differences in Market Access
 
 AUSFTA is the most liberalizing in terms of mark et access compared with TAFTA and SAFTA.  The 
main area of liberalization under AUSFTA regard ing investment was with regards to the 
Government’s Foreign Investment Review Boar d (FIRB) thresholds, which in AUSFTA were 
increased to $A 871 million (indexed annually) for non-sensitive sectors, whereas in TAFTA and 
SAFTA, the Government did not raise its FIRB thres holds and instead agreed to bind them at their 
current levels.  
 
Question: (Paragraphs 31-32) 
 
The analysis commissioned by the Australian Govern ment to assess the economic impact of the 
Australia-United States FTA found that by far the largest benefit (60% approx.) arose from amending 
the threshold for assessing foreign investment proposal s by the Foreign Investment Review Board of 
US investors. 
 
Given Australia's desire to encourage foreign investme nt generally (as illustrated by the existence of 
Invest Australia), is any consideration being given  to aligning the thresholds for non-USA investors 
with those for US investors, in particular the $A871 million threshold for investments in non-sensitive 
sectors? 
 
Answer: 
 
Australia has no plans at this stage to extend the hi gher investment screening thresholds that apply to 
the US to all WTO Members.    
However, the Government has recently raised fo reign investment screening thresholds for all 
investors regardless of nationality to reduce unn ecessary compliance costs on business and to reflect 
increases in Australian asset values.  The general asset value threshold has been raised from $A 50 
million to $A 100 million with exceptions for investme nts in media or by foreign governments.  The  WT/TPR/M/178/Add.1 
 Page 75 
 
 
  asset value threshold for offshore takeovers of forei gn corporations (with less than 50 per cent of their 
assets in Australia) has been raised from $A 50 million to $A 200 million.  The Australian Government believes it is too ear ly to assess the impact of the Australia-US Free 
Trade Agreement (AUSFTA) on foreign investment fl ows given the agreement has been in force for 
only two years.  We note the assessment in the an alysis referred to above was based on a ten year 
period after the AUSFTA’s entry into force.  However,  we consider the inclusion of strong and legally 
binding investment protection provisions and mark et access obligations in Australia’s FTAs provides 
a secure and open framework for investment between  the parties, and that this framework has the 
potential to facilitate increased i nvestment flows in the future. 
 Japan:
 
 Question: 
(Paragraph 28) 
 The Secretariat report analyses t hat Australia’s recent regional trade agreements, which include 
investment-specific provisions, have not increa sed investment from its partner countries. 
Please indicate Australia’s views on the analysis me ntioned above, concretely the impact of such 
regional trade agreements on investment.  
 
Answer: 
 
As is stated in the Secretariat report, the Australi an Government believes it is too early to assess the 
impact of Australia’s recent FTAs on foreign investme nt flows as they are relatively new.  However, 
we consider the inclusion of strong and legally bi nding investment protection provisions and market 
access obligations in Australia’s FTAs provides a sec ure and open framework for investment between 
the parties, and that this framework has the poten tial to facilitate increased investment flows in the 
future. 
 
The existence of an FTA is only one factor that  prospective investors take into account before 
deciding to invest in another country, particular ly in the case of FDI, which is a longer term 
commitment.  Investors will also consider factors such as the domestic regulatory environment, political and economic stability, the skill levels of th e local labour force, local infrastructure, the 
standard of information technology and communicati ons.  These are all areas in which Australia has 
been performing very strongly for a number of year s, making Australia a very attractive environment 
for FDI.  
Question: 
(Paragraph 20) 
 
According to the document “Submission on Region al Trade Agreements”(13 May 2005) presented by 
Australia to the WTO, Australia proposed a definitio n of ‘substantially all trade’ to mean eliminating 
all duties on a minimum of 95 percent of tariff lines at  six digit level of the Harmonized System(HS).  
 Could Australia explain why this benchmark has  been made, and how it will be carried out in 
Australia’s future FTA negotiations? 
 
Answer: 
 
Australia believes that for Regional Trade Agreem ents to be genuinely trade liberalising and 
supportive of efforts at the multilateral level, they  must be comprehensive and WTO consistent.  
Australia has actively contributed to efforts in the Negotiating Group on Rules aimed at clarifying and WT/TPR/M/178/Add.1 
Page 76  
 
  improving the GATT disciplines on RTAs, pursuant to paragraph 29 of the Doha Ministerial 
Mandate.  Central to these negotiations is the search for a rigorous definition of th e term ‘substantially all trade’.  
The benchmarks proposed in our 2005 paper reflect the minimum level of coverage by tariff line and 
trade volume which Australia believes would meet with the substantially all trade requirement.  
 Australia enters any FTA negotiation with the intent ion of seeking the greatest degree of liberalisation 
possible.  Question: (Paragraph 31)  To what extent (percentage) will the duties be eliminat ed on a tariff line / trade value basis within ten 
years after the entry into force of the Australia-United Stat es Free Trade Agreement (AUSFTA)? 
Could Australia provide the percentage two ways ( export from Australia and import to Australia)? 
For which tariff lines will duties remain within  ten years after its entry into force?  
 
Answer: 
 
Duties on all US goods entering Australia will be elim inated by 1 January 2015  (10 years after entry 
into force of AUSFTA).  Duties on all non-agricultural Australian goods en tering the United States will be eliminated by 
1 January 2015 (10 years after entry into force). 
 Around 66 per cent of all US agricultural tariffs for Australian goods were eliminated on entry into 
force of the Agreement, with a further nine per cent eliminated within four years of entry into force.  
Tariffs on the remaining agricultural lines will be reduced in annual stages until 1 January 2023, at 
which time all tariffs on Australian goods entering th e United States will have been removed, with the 
exception of sugar and some dairy lines. 
 
The AUSFTA tariff schedules are available on the website of Australia’s Department of Foreign 
Affairs and Trade and provide details on the stag ing categories for the reduction of US tariffs on 
specific tariff lines, including those for which duties will remain ten years after entry into force.  
 
Question: 
 
Please indicate why sugar was the only item ex empted from tariff elimination in AUSFTA. 
 Answer: 
 
The Australian Government sought to include acces s for sugar in the negot iation of the Australia-
United States Free Trade Agreement.  However, th e United States did not agree to incorporate sugar 
into the FTA  
 Question:  AUSFTA  To what extent (percentage) do "the remaining agri cultural lines" (on which tariffs will not be 
eliminated within ten years after the entry into force of the AUS FTA) account for in Australia's 
exports to the US on a trade value basis?  WT/TPR/M/178/Add.1 
 Page 77 
 
 
  Answer: 
 
Information on tariff schedules and staging categories, to assist in calculating the extent to which the 
United States will eliminate its duties on agricultu ral goods, on a tariff line and trade volume basis, is 
publicly available on the following Australian G overnment websites: http://www.dfat.gov.au and 
http://www.customs.gov.au. 
 
Question: 
(Paragraph 33) 
 What are Australia’s basic positions for negotiati ng the investment chapter in the bilateral trade 
agreement with China, and what progress has been m ade so far, especially with regard to investment 
liberalization? 
 
Answer: 
 
Australia pursues outcomes on investment in all of its  FTAs.  We aim to facilitate bilateral trade and 
investment by reducing impediments and increasing protection for investors.   
 
Australia’s position for negotiating the free trade agreement with China is that it must be comprehensive - covering goods, services and investme nt - and be completed as a single undertaking. 
 Malaysia:
 
Question: 
Can Australia provide information on  the percentage of tariff lines on which tariffs will be eliminated 
(overall and by sector)?  Please confirm if all tariffs for textiles will be eliminated by 2015 in TAFTA? 
Answer: Under TAFTA, all Australian tariffs, includi ng on textiles, will be eliminated by 2015. 
Question: Please also provide information on the volume of tr ade for sensitive sectors for which tariff have been 
eliminated? 
Answer: 
While a range of tariffs were eliminated on TAFTA ’s entry into force in 2005, tariffs in sensitive 
sectors, such as textiles, have not yet been eliminated. 
Question: 
Could Australia provide more details on the prov isions in the Australia-Thailand FTA which deal 
with Sanitary and Phytosanitary chapter.  How doe s the FTA facilitate impor tation of goods into 
Australia? 
Answer: 
The sanitary and phytosanitary (SPS) provisions of  the TAFTA affirm Australia's and Thailand's 
obligations under the WTO Agreemen t on the Application of Sanitary  and Phytosanitary Measures.  
The SPS chapter also provides a consultative fra mework to enhance cooperation on SPS issues.  WT/TPR/M/178/Add.1 
Page 78  
 
  Chapter 6 of the TAFTA, dealing with sanitary and phytosanitary measures and food standards, can 
be located through the website of the Department of Foreign Affairs and Trade at: http://www.dfat.gov.au/trade/negotiations /aust-thai/tafta_chapter_6.html 
 
The TAFTA SPS provisions facilitate trade through enhanced cooperation on SPS matters and in 
particular through improved understanding of the respec tive priorities that each country attaches to 
SPS market access requests. 
 Question:  Australia considers that ‘high quality’, amb itious and comprehensive RTAs can complement and 
provide momentum to its multilateral trade objectives.   To what extent will the Australian Government 
open its domestic market to FTA partn ers for its agricultural products? 
 Answer: 
 
Under Australia’s existing FTAs all Au stralian tariffs will be eliminated. 
 
Mexico:
 
 
Question: 
(Paragraph 24)  ANZCERTA.  New rules of origin to be adopted fr om 1 January 2007 will be based on a change to the 
tariff classification at the HS 6-digit level. 
Will these changes to the 6-digit level concern th e entire customs tariff or only certain specific 
sectors?  Answer: 
 
The changes made to the rules of origin for Ne w Zealand originating goods apply to the entire 
customs tariff schedule.   
 Note, however, that not all of these new rules of origin  are detailed at the 6-digit level.  Some rules are 
given at the 4-digit level. 
 
Switzerland:
 
 Question: (Paragraph 33)  What role do you see for preferential trade agreements  in the development of Australia 's relations 
with other large emerging economies such as Brazil, Russia, India and China ?  
 
Answer: 
 
Australia seeks comprehensive and genuinely libe ralising FTAs that further the wider objective of 
global trade liberalisation and reform.  FTAs with many exemptions, lengthy transition (tariff phase-
out) periods and with shallow levels of trade libera lisation are not contributing to the overall goal of 
global trade reform.   WT/TPR/M/178/Add.1 
 Page 79 
 
 
  Australia’s consideration of possible FTAs is guided by a number of key criteria, including: 
 
- comprehensive liberalisation (covering tr ade in goods, services and investment and 
other trade-related issues) 
- full consistency with WTO principles and ru les, with minimal exclusions, elimination 
of virtually all tariffs either immediatel y or over a short transition period, and the 
removal of virtually all discriminatory measures in the services sector, and  
- where possible, potential to deliver WTO-pl us outcomes for issues not fully covered 
by the WTO, such as investment and trade facilitation. 
 
Negotiations on an Australia-China Free Trade Agreement commenced in mid-2005.  A 
comprehensive FTA with Australia’s second largest market for merchandise exports – and Australia’s 
fastest growing major export market – will offer substantial commercial benefits to Australian 
exporters.  The seventh round of negotiations took  place in mid-December, with the next round 
scheduled for late March 2007.  No timetable h as been set for completion of the negotiations. 
 
Thailand:  
 Question: (Paragraph 2)  
The Secretariat Report states that TAFTA tariffs on the remaining 239 tariff items of apparel and 
certain finished textiles are currently at 17.5%.  We  understand that the current rate should be 12.5%.  
Could Australia please clarify this discrepancy?  Answer: 
 
Thailand is correct.  The current rate for Thailand is 12.5 per cent, as provided for in TAFTA and in 
the Australian customs tariff schedule. 
 
Foreign investment regime
 
 
Argentina  
 Question: (Paragraph 35)  
When is a proposal contrary to the national interest?  
(Paragraph 36)  How many strategic investment projects have b een approved in the period under review, and how 
many of them were approved as "provi ding benefits to Australian regions"? 
 
Answer:  
The national interest in relation to a particular app lication is determined by the Treasurer.  While the 
national interest is not defined, it may incl ude for example national security and economic 
development.  Australia's foreign investment screening regime is premised on the assumption that 
foreign investment is beneficial to Australia.  As a consequence, it is necessary for the Treasurer to 
establish that a foreign investment proposal would be contrary to the national interest in order for it to 
be blocked.  WT/TPR/M/178/Add.1 
Page 80  
 
  Consistent with the principles of natural justice, should the Treasurer consider that a proposal is 
contrary to the national interest, the investors w ould be advised of the grounds for reaching this 
conclusion before a final decision is taken.  This provides the investors with an opportunity to respond 
to the national interest concerns.  
There is no formal avenue for appeal of a foreign investment decision.  However, if the parties are 
able to restructure a proposal to address the nationa l interest concerns, they can then submit a new 
proposal for consideration.    There have been no rejections of business proposals since 2001. 
 
Bolivia 
 
 Question:  
The Report states that Australia's foreign investme nt regime is generally transparent and liberal, 
although it contains foreign equity restrictions in  certain "sensitive" sectors and a screening process 
to ensure that foreign investment is not  contrary to the "national interest". 
 What is Australia's position with  regard to openness to foreign direct  investment in sectors such as 
basic services (water, sewerage, etc.)?  Are there any restrictions or specific conditions? 
 
Answer:  
 
We note Australia’s initial GATS offer in enviro nmental services does not undermine Australia’s 
capacity to regulate environmental standards and e xplicitly excludes the provision of water for human 
use.  Water and sewerage is not identified as a se nsitive sector in Australia’s foreign investment 
screening regime.  100 per cent foreign ownership in  this sector is permitted subject to normal 
screening arrangements.  The same applies in relati on to the gas, electricity and telecommunications 
sectors (with the exception of the 35  per cent foreign equity limit that applies to Telstra Corporation 
Limited, the former government-owned telecommunications provider).    Question:  The Report states that Australia provides preferen tial treatment to U.S.  investors under the Free-
Trade Agreement with the United States. Does this not adversely affect other regional or bi lateral trade agreements and thus, in practice, 
result in discrimination in respect of other trading partners? 
 Answer:  
 
Australia provides preferential treatment to US i nvestors under the Australia-United States Free Trade 
Agreement (AUSFTA) in the form of an exemp tion from screening for new US investments and 
higher thresholds for US investments in non-sensitive sectors.   
 The Australian Government has recently raised foreign investment screening thresholds for all 
investors regardless of nationality to reduce unn ecessary compliance costs on business and to reflect 
increases in Australian asset values.  The genera l asset value threshold has been raised from 
$A 50 million to $A 100 million with exceptions for i nvestments in media or by foreign governments.  
The asset value threshold for offshore takeovers of foreign corporations (with less than 50 per cent of 
their assets in Australia) has been raised from $A 50 million to $A 200 million.  Australia has also 
recently removed foreign equity restrictions in the media sector for all foreign investors.     WT/TPR/M/178/Add.1 
 Page 81 
 
 
  Canada:  
Question: 
(Paragraph 37) 
The Secretariat Report notes that “It seems that Australia's recent regional trade agreements (with 
Singapore, Thailand, and the Unite d States), which include investment -specific provisions, have not 
increased investment from its partner countries.”  Th e Secretariat Report also notes that as a result of 
the Australia-U.S. Free Trade Agreement, Austra lia continues to screen investment from the 
United States above certain thresholds, which are significantly higher than for investment from other countries. 
Could Australia please explain what is the policy rationale for providing pref erential treatment to US 
investors (or discriminating against foreign investors from non-free trade agreement countries) with 
respect to the investment screening reg ime in Australia, particularly when investment flows have not 
increased from FTA partner countries? 
Answer: 
The AUSFTA is a comprehensive package of measures covering goods, services and investment.  It is 
fully consistent with World Trade Organisation rules and principles, in particular Article XXIV of the 
General Agreement on Tariffs and Trade (GATT) an d Article V of the General Agreement on Trade 
in Services (GATS).  While the investment chapter pr ovides preferential treatment to US investors, it 
also provides strong investor protection provisions for Australian investors in the US.  The US is 
Australia’s largest source of foreign investment a nd most important destination for direct investment 
abroad. 
As is stated in the Secretariat report, the Australi an Government believes it is too early to assess the 
impact of Australia’s recent FTAs on foreign investment flows as they are relatively new. 
Question: 
Could Australia indicate when the Australian authorities intend to extend the higher investment 
screening thresholds to all WTO Members?   
Answer: 
Australia has no plans at this stage to extend the hi gher investment screening thresholds that apply to 
the US to all WTO Members.   
However, the Government has recently raised fo reign investment screening thresholds for all 
investors regardless of nationality to reduce unn ecessary compliance costs on business and to reflect 
increases in Australian asset values.  The general asset value threshold has been raised from $A 50 
million to $A 100 million with exceptions for investme nts in media or by foreign governments.  The 
asset value threshold for offshore takeovers of forei gn corporations (with less than 50 per cent of their 
assets in Australia) has been raised from $A 50 million to $A 200 million. 
China:
 
Question: 
(Paragraph 35) 
Australia practices a screening process on foreign investment to ensure its compliance with 
Australia’s “national interest”.  It is indicated in the Secretariat Report that such “national interest” WT/TPR/M/178/Add.1 
Page 82  
 
  considerations may include environmental regulati ons, competition policy, national security interests 
and economic development. In the last Trade Policy Review on Australia in 2002, Members raised a 
number of questions in this respect, but the rep lies from Australia need further elaborations. 
In order to increase transparency in its approval  system, could Australia put all its “national 
interest” considerations in the form of a list? 
Answer: 
The Australian Government determines what is ‘contrary  to the national interest’ by having regard to 
widely held community concerns of Australians.  Australia's foreign investment screening regime is 
premised on the assumption that foreign investment is beneficial to Australia.  As a consequence, it is necessary for the Treasurer to establis h that a foreign investment proposal would be contrary to the 
national interest in order to be blocked. 
Question: 
(Paragraph 35) 
Australia has foreign equity restrictions in certain “sensitive” sectors.  
Which laws and regulations define “sensitive” se ctors? Is there a list of “sensitive” sectors 
available? Apart from FTA factors, has Australia modified the scope of “sensitive” sectors in recent 
years? Is it likely to narrow dow n this scope in the future? 
Answer: 
The general asset threshold of $A 100 million applies to investment in all sectors except the media 
and investment by foreign governments.  Therefore, foreign investment in most sectors will only be 
subject to screening if it reaches the $A 100 million threshold. 
There are a number of sectors where foreign equity restrictions apply, namely: 
 
- Civil aviation:  The Qantas Sale Act  1992 and the  Air Navigation Act 1920 impose 
foreign equity restrictions on Qantas and other Australian international carriers. 
- Airports:  The Airports Act 1996  stipulates foreign ownership limits and airline 
ownership limits on Australian airports as well as cross ownership limits between 
Sydney airport and Melbourne, Brisbane and Perth airports. 
- Shipping:  The Shipping Registration Act 1981  requires that ships be majority 
Australian owned in order to be registered in Australia. 
- Telecommunications:  The Telstra Corporation Act 1991 imposes foreign ownership 
restrictions on Telstra. 
 
Portfolio investments in the media of 5 per cent or more and all non-portfolio investments in the 
media, irrespective of size, require screening.  Di rect investments by foreign governments and their 
agencies, irrespective of size, also require screening. 
For US investors subject to the AUSFTA a number of sectors have been prescribed as ‘sensitive’ and 
therefore subject to the standard $A 100 million thre shold rather than the higher threshold applying to 
US investments.  WT/TPR/M/178/Add.1 
 Page 83 
 
 
  Chinese Taipei:  
Question: 
(Paragraph 35) 
The Report states that Australia’s “foreign investme nt regime is generally transparent and liberal, 
although it contains foreign equity restrictions in certain "sensitive" sectors, and a screening process 
to ensure that foreign investment is not  contrary to the "national interest".” 
Please could Australia elaborate further on the " national interest" factors and criteria applied when 
considering whether or not to approve a foreign investment. 
Answer: 
Australia’s foreign investment  policy framework comprises the Foreign Acquisitions and Takeovers 
Act 1975  (FATA), regulations made under the FATA, and other requirements set down by way of 
Ministerial statement.  Australia operates a transpar ent foreign investment screening regime to ensure 
that acquisitions of significant Australian businesses are not contrary to the national interest.  
Particular restrictions, including limits on equity par ticipation, are maintained in a few sensitive areas, 
including civil aviation and telecommunications, where foreign investment generates community 
concern.  The policy provides for foreign invest ments to be approved or in some cases approved 
subject to particular conditions desi gned to protect the national interest. 
For business acquisitions there is a general asset threshold of $A 100 m illion, below which no 
screening is required, with the exception of inv estment in media or by foreign governments.  
Proposals above this threshold are generally approve d unless judged contrary to the national interest. 
The national interest in relation to a particular app lication is determined by the Treasurer.  While the 
national interest is not defined, it may incl ude for example national security and economic 
development.  Australia's foreign investment screening regime is premised on the assumption that foreign investment is beneficial to  Australia.  As a consequence, it is necessary for the Treasurer to 
establish that a foreign investment proposal would be contrary to the national interest in order to be 
blocked.   
Consistent with the principles of natural justice, should the Treasurer consider that a proposal is 
contrary to the national interest, the investors w ould be advised of the grounds for reaching this 
conclusion before a final decision is taken.  This provides the investors with an opportunity to respond 
to those concerns.  There is no formal avenue for a ppeal of a foreign investment decision.  However, 
if the parties are able to restructure a proposal to address the national interest concerns, they can then 
submit a new proposal for consideration. 
There have been no rejections of business proposal s since 2001, when Royal Dutch Shell’s bid for 
Woodside Petroleum was rejected on national interest grounds.  Each year a number of residential real 
estate proposals are rejected on the basis that they do not comply with the published policy.  Over the 
past five years, rejections have represented ar ound 1 per cent of all decided proposals each year. 
EC:
 
Question: 
(Paragraph.35)  The screening procedure for foreign in vestment in certain sensitive sectors is described in the report. 
It is mentioned that "where the Foreign treasurer considers the proposal is contrary to its national 
interest he may reject it under the Foreign Acquisition and Takeover Act 1975 (FATA)".  WT/TPR/M/178/Add.1 
Page 84  
 
  Could Australia elaborate on the considerations/cr iteria applied in such a procedure? Is this 
procedure followed by a statement of reasons given to the investor? Does the investor have the 
possibility to have its case be reviewed  by an independent authority/tribunal? 
 Answer: 
 
Australia’s foreign investment  policy framework comprises the Foreign Acquisitions and Takeovers 
Act 1975  (FATA), regulations made under the FATA, and other requirements set down by way of 
Ministerial statement.  Australia operates a transpar ent foreign investment screening regime to ensure 
that acquisitions of significant Australian businesses are not contrary to the national interest.  
Particular restrictions, including limits on equity par ticipation, are maintained in a few sensitive areas, 
including civil aviation and telecommunications, where foreign investment generates community 
concern.  The policy provides for foreign invest ments to be approved or in some cases approved 
subject to particular conditions desi gned to protect the national interest. 
 
For business acquisitions there is a general asset threshold of $A 100 m illion, below which no 
screening is required, with the exception of inv estment in media or by foreign governments.  
Proposals above this threshold are generally approve d unless judged contrary to the national interest. 
 The national interest in relation to a particular app lication is determined by the Treasurer.  While the 
national interest is not defined, it may incl ude for example national security and economic 
development.  Australia's foreign investment screening regime is premised on the assumption that 
foreign investment is beneficial to  Australia.  As a consequence, it is necessary for the Treasurer to 
establish that a foreign investment proposal would be contrary to the national interest in order to be 
blocked.  
Consistent with the principles of natural justice, should the Treasurer consider that a proposal is 
contrary to the national interest, the investors w ould be advised of the grounds for reaching this 
conclusion before a final decision is taken.  This provides the investors with an opportunity to respond 
to those concerns.  There is no formal avenue for a ppeal of a foreign investment decision.  However, 
if the parties are able to restructure a proposal to address the national interest concerns, they can then 
submit a new proposal for consideration. 
 
There have been no rejections of business proposal s since 2001 when Royal Dutch Shell’s bid for 
Woodside Petroleum was rejected on national interest grounds.  Each year a number of residential real 
estate proposals are rejected on the basis that they do not comply with the published policy.  Over the 
past five years, rejections have represented ar ound 1 per cent of all decided proposals each year. 
 
Question: 
(Paragraph 93)  It is stated that foreign investment in the ba nking sector are subject to a 15% shareholding 
requirement, although the Treasury may approve a higher percentage on "national interest" grounds. 
 
Could Australia elaborate on the procedure and the practice applied in this respect?  
Could Australia indicate the number of a pplications granted or refused so far? 
Could Australia confirm whether foreign investors fr om the US also fall under this requirement?  
 
Answer: 
 
The Financial Sector (Shareholding Act) 1998  imposes a 15 per cent shareholding limit on a person’s 
shareholding in an authorised deposit-taking ins titution or authorised insurer.  This prudential  WT/TPR/M/178/Add.1 
 Page 85 
 
 
  legislation applies on a national treatment basis to  both domestic and foreign shareholders (including 
US investors).    There have been no rejections of business proposal s since 2001 when Royal Dutch Shell’s bid for 
Woodside Petroleum was rejected on national interest grounds.   
 
Hong Kong:
 
 Question: (Paragraph 98) 
 
We are pleased to note that the current medi a-specific and newspaper-specific foreign ownership 
restrictions would be removed from 2007.  Yet, as stated in the Secretariat’s report, certain 
investment proposals by foreign interests are still subj ect to prior approval/examination.  What are 
the factors that the Australian Government will take in to account as to whether to grant approval for 
those proposals? 
 Answer: 
 
The general asset threshold of $A 100 million applies to investment in all sectors except the media 
and investment by foreign governments.  Therefore, foreign investment in most sectors will only be 
subject to screening if it reaches the $A 100 million threshold. 
 There are a number of sectors where foreign equity restrictions continue to apply, including civil aviation and telecommunications.  In all other sectors, foreign investment proposals are approved unless they are considered contrary to the national interest. 
 
Portfolio investments in the media of 5 per cent or more and all non-portfolio investments in the 
media, irrespective of size, require screening.  Di rect investments by foreign governments and their 
agencies, irrespective of size, also require screening.  For US investors subject to the AUSFTA a number of  sectors have been prescribed as ‘sensitive’ and, 
therefore, are subject to the standard $A 100 m illion threshold rather than the higher threshold 
applying to US investments..   
Japan:
 
 
Question: 
(Paragraph 35-36)  
In Australia, a foreign investment proposal of more  than $A 50 million needs to be approved in 
advance by the Foreign Investment Review Board (FIRB). Japan would like to request Australia to raise such threshold value.  
Answer:  
The Australian Government has recently raised fo reign investment screening thresholds to reduce 
unnecessary compliance costs on business and to reflect increases in Australian asset values.  The general asset value threshold has been raised from $A 50 million to $A 100 million with exceptions 
for investments in media or by foreign government s.  The asset value threshold for offshore takeovers 
of foreign corporations (with less than 50 per cent of their assets in Australia ) has been raised from 
$A 50 million to $A 200 million.  WT/TPR/M/178/Add.1 
Page 86  
 
  The Australian Government has also introduced new regulations to refine the exemption applying to 
foreign custodians.    
Question: 
 
Japan understands that if FIRB considers a foreign in vestment proposal is contrary to the national 
interest, the proposal may be rejected. However, th e criteria of whether the proposal is contrary to 
the national interest are not necessarily self-expla natory. Japan would like to ask Australia for 
clarification and details on criteria.  
Answer:  
The Australian Government determines what is ‘contrary  to the national interest’ by having regard to 
widely held community concerns of Australians.  Australia's foreign investment screening regime is 
premised on the assumption that foreign investment is beneficial to Australia.  As a consequence, it is 
necessary for the Treasurer to establis h that a foreign investment proposal would be contrary to the 
national interest in order to be blocked.  
Question: 
 Investment policy in resources and energy sectors 
 
According to the answer regarding the Australian investment policy, should a doubt or a problem 
arise concerning exploitation and development of minera l resources, it is with the relevant State or 
Territory Government in the first instance that a proponent of the exploration should raise the 
problem. For this point of view, Japan would like Australia to reply to the following questions.    
If a State or a Territory Government cannot resolve the problem, what can the proponent do? What 
can the government of a home country, from wh ere the proponent originates, do to resolve the 
problem? 
 
Answer: 
 
The course of action the proponent may take depends on whether the doubt or problem is a 
commercial matter between companies, a matter rela ted to the administration of the laws of the 
Australian Government, or a matter related to th e laws of the State and Territory Governments.  
 
Switzerland:
 
 Question: 
 
Para. 35 of the Secretariat’s report indicates that while the foreign investment regime in Australia is 
generally transparent and liberal, it contains foreign equity restrictions in certain “sensitive” sectors 
and a screening process is foreseen to ensure that fo reign investment is not contrary to “national 
interest”. In case of a rejection of the foreign in vestment by the Treasurer, could the Australian 
authorities indicate what are, if any, the legal po ssibilities of recourse open to a foreign investor who 
sees its proposed foreign investment in Australia rejected?  
 Answer: 
 
Australia’s foreign investment  policy framework comprises the Foreign Acquisitions and Takeovers 
Act 1975  (FATA), regulations made under the FATA, and other requirements set down by way of 
Ministerial statement.  Australia operates a transpar ent foreign investment screening regime to ensure  WT/TPR/M/178/Add.1 
 Page 87 
 
 
  that acquisitions of significant Australian businesses are not contrary to the national interest.  
Particular restrictions, including limits on equity par ticipation, are maintained in a few sensitive areas, 
including civil aviation and telecommunications, where foreign investment generates community 
concern.  The policy provides for foreign invest ments to be approved or in some cases approved 
subject to particular conditions desi gned to protect the national interest. 
 
For business acquisitions there is a general asset threshold of $A 100 m illion, below which no 
screening is required, with the exception of inv estment in media or by foreign governments.  
Proposals above this threshold are generally approve d unless judged contrary to the national interest. 
 
The national interest in relation to a particular app lication is determined by the Treasurer.  While the 
national interest is not defined, it may incl ude for example national security and economic 
development.  Australia's foreign investment screening regime is premised on the assumption that foreign investment is beneficial to  Australia.  As a consequence, it is necessary for the Treasurer to 
establish that a foreign investment proposal would be contrary to the national interest in order to be 
blocked. 
 Consistent with the principles of natural justice, should the Treasurer consider that a proposal is 
contrary to the national interest, the investors w ould be advised of the grounds for reaching this 
conclusion before a final decision is taken.  This provides the investors with an opportunity to respond 
to those concerns.  There is no formal avenue for a ppeal of a foreign investment decision.  However, 
if the parties are able to restructure a proposal to address the national interest concerns, they can then 
submit a new proposal for consideration.  There have been no rejections of business proposal s since 2001 when Royal Dutch Shell’s bid for 
Woodside Petroleum was rejected on national interest grounds.  Each year a number of residential real 
estate proposals are rejected on the basis that they do not comply with the published policy.  Over the 
past five years, rejections have represented ar ound 1 per cent of all decided proposals each year. WT/TPR/M/178/Add.1 
Page 88  
 
  CHAPTER III.  TRADE POLICIES AND PRACTICES BY MEASURES
  
Registration and documentation requirements  
Mexico:  
Question: 
Paragraph 9 
Australia has no pre-shipment inspection require ments for imports or ex ports.  Pre-shipment 
requirements, if applicable, are det ermined on a case-by-case basis. 
In what cases do pre-shipment inspection re quirements apply?  How are they determined?  
Answer: 
Australia does not have a pre-shipment inspection system. 
Switzerland:  
Question: 
Para. 74 of the Secretariat’s report states that  Customs may undertake compliance examinations on 
behalf of permit-issuing agencies. It is not clea r whether these permit-issuing agencies are domestic 
agencies or agencies in the importing country. Coul d Australia provide some details on the "who" 
and the "why"? 
Answer: 
Permit Issuing Agencies (PIAs) are domestic ag encies.  These agencies issue permits for the 
importation and/or exportation of prohibited and restri cted goods.  Australia prohibits and restricts the 
importation and/or exportation of goods, inter alia  to: 
- protect the community (consumer protection and public health and safety concerns);  
- protect the environment; and  - international commitments (such as UN Security Council Resolutions). 
 
For an up-to-date and comprehensive list of prohibite d and restricted goods and the PIA that controls 
those goods go to Customs website at www.customs.gov.au/site/page.cfm?u=4381.   
Tariffs
 
Argentina  
Question: 
(Paragraph 21): 
Could Australia please provide further informa tion on the procedure and requirements for an 
importer to qualify for the Tariff Concession Syst em when it wishes to import a product for which 
there is no domestic equivalent? 
Answer: 
 
The requirements for an importer to obtain a Tari ff Concession Order (TCO) is that there is no 
manufacturer of substitutable goods in Australia in the ordinary course of business and the goods the  WT/TPR/M/178/Add.1 
 Page 89 
 
 
  subject of the application are not declared by the regulations to be goods to which a TCO should not 
extend.   Applications for a TCO must be in writing and be in  an approved form.  The application must contain: 
 
a) a full description of the goods to which the application relates; 
b) a statement of the tariff classification that, in the opinion of the applicant, applies to the 
goods; 
c) if the applicant is not proposing to make use of the TCO to import goods to which the 
application relates into Australia on the applicant’s own behalf – the identity of the 
importer for whom the applicant is acting; and 
d) particulars of the enquiries made by the applicant (including inquiries made of prescribed 
organisations) to assist in establishing that there were reasonable grounds for believing 
that, on the day on which the application was lodged, there were no producers in Australia of substitutable goods.
5 
 
The Australian Customs Service must initially assess the application at a screening stage to ensure that it 
is a valid application and conforms with procedural requirements.  If the application is not rejected at 
screening stage, it is notified in the Commonwealth of Australia Tariff Concessions Gazette (Gazette) 
within 28 days of receipt of the application.  
Any person may object to the making of a TCO within  50 days of publication date, on the grounds that 
substitutable goods are produced in Australia in the or dinary course of business.  Objections must be 
lodged on the approved form.  The Australian Customs Service has 150 days from th e date of gazettal notice to make a decision on 
each application, including considera tion of any submissions received.   
 The process is governed by strict time frames for th e provision of submissions  and information, and 
comprehensive information must be provided within th e statutory time limits, as the Australian Service is 
prohibited from taking into account la te submissions and information. 
 
When a TCO is made, it comes into effect on the date  the application was first received by the Australian 
Customs Service. This means that all goods covered by the TCO that are entered for home consumption 
on or after that date will be eligible for the concession.   All TCOs are available for the use of all importers of the goods the subject of the TCO.  Importers can 
gain access to duty free entry under a TCO by quotin g the TCO number in an import declaration. 
 Further information on TCOs is available at: www.customs.gov.au. 
 
China:
 
 
Question: 
 China notes the efforts taken by Australia regarding tariffs of textiles, clothing, footwear and motor 
vehicle components and spare parts, . However, tariff s of these products remain relatively high, up to 
17.5%.  
 
Could Australia provide information regarding sit uations of these industrial sectors such as the 
changes and adjustments that they have undergone in  the past few years? It is mentioned in the 
                                                     
 
 5 Customs Act: section 269F(3) WT/TPR/M/178/Add.1 
Page 90  
 
  Secretariat Report that more than 40% of Austra lia's bound rates currently exceed applied MFN rates 
by at least five percentage points, and that sin ce last review there has not been any increase in its 
applied tariff rates.   How does Australia envisage to contribute to th e multilateral trade liberalization process irrespective 
of any progress in the DDA negotiations ? 
 
Answer:  
 
Australia pursued extensive autonomous tariff refo rm during the 1990s and th rough to 2000 across all 
sectors, with applied tariffs being reduced in  many cases well below Australia’s bound tariff 
commitments resulting from the Uruguay Round.  In  January 2005, Australian implemented further 
autonomous reductions in applied tariffs for the two remaining industrials sectors where applied 
tariffs remained above the genera l rate of 5 per cent, textiles, clothing and footwear and passenger 
motor vehicles, parts and components.  These reduced  applied tariffs in those sectors by almost a 
third.   
 Australian customs tariff legislation sets out further tariff reductions for these two sectors in the future, such that the tariff for most textiles and footwear, as well as for passenger motor vehicles, 
parts and components will be reduced to no more than  5 per cent in 2010.  Tariffs on other textiles and 
clothing will be reduced to 10 per cent in 2010 and th en 5 per cent in 2015.  A further review of the 
motor vehicle industry is scheduled to be undertaken by the Productivity Commission in 2008. 
 The following tables set out past tariff reductions in these two sectors as well as legislated future 
reductions.  
Schedule of PMV tariff reduc tions for the period 1997-2010  
Sector Date Effective Tariff Rate 
1 January 2000 15% 
1 January 2005 10% PMV and certain components for PMV 
1 January 2010 5% 
 
 
Schedule of TCF tariff reductions for the period 1997-2015 
Product 1997  
% 1998 
% 1999  
% 2000-2004
% 2005 
% 2010 
% 2015 
% 
Clothing and finished te xtiles 34 31 28 25 17.5 10 5 
Cotton sheeting and fabrics 22 19 17 15 10 5 5 
Sleeping bags, table linen 13 12 11 10 7.5 5 5 
Carpet 21 19 17 15 10 5 5 
Footwear 24 21 18 15 10 5 5 
Footwear parts 17 14 12 10 7.5 5 5 
Other (e.g., yarns, leather) 5 5 5 5 5 5 5 
In regard to Australia’s bound tariff rates, w hose present level result from the Uruguay Round as well 
as the further elimination of bound tariffs through the Information Technology Agreement, Australia 
is committed to working to achieve an ambiti ous outcome in the Doha Round market access 
negotiations.  To this end, Australia supports th e application of the Swiss formula to reduce bound 
tariff levels.   WT/TPR/M/178/Add.1 
 Page 91 
 
 
  Japan:  
 Question: 
(Paragraph 13) 
 Despite the result of unilateral reductions in 20 05 in tariffs including passenger motor vehicles 
(PMVs), their rates are still cons iderably higher than the average applied MFN rate which is 3.8% in 
2006. Current applied tariffs for PMVs, component s and replacement parts are scheduled to be 
reduced from 10% to 5% only in 2010.  
 Could Australia provide information about the staging of tariff reduction until 2010?  
 
Japan would like to know Australia's perspective of further reduction after 2010. Japan also would 
like to know whether the authorities will continue to  make efforts until these ta riffs reach approximate 
to the average applied tariffs.  
 Answer: 
 With regard to tariffs for passenger motor vehicles (PMVs), components and replacement parts, tariffs 
are legislated to reduce to no higher than 5 per cent.   Tariffs above 5 per cent are legislated to reduce 
to 5 per cent on 1 January 2010.  A further review of the motor vehicle industry is  scheduled to be undertaken by the Productivity 
Commission in 2008.  
Noting that 5 per cent is Australia’s current genera l tariff, this has been seen as the appropriate end-
point for sectoral tariff reductions.  There are no current plans to review the general 5 per cent tariff.  Given that for a substantial proportion of tariff lines th e applied tariff rate is zero, even after all tariffs 
are reduced to no more than the general tariff rate , these tariffs will still be above the average tariff 
rate. 
 
Question: (Paragraph 16) 
 
The compound rate of 10% (15% in 2002) plus A UD 12,000 per unit, which are applied to eight items 
of used or second-hand vehicles. The average AVE for these items was 206.8% in 2006. Nonetheless, 
the authorities state that the tariff has not been applied since the commencement of a registered 
automotive workshop scheme (RAWS) in 2002.  
Could Australia explain the objective of impl ementing the RAWS and how the scheme operates in 
practice?   
How long will the RAWS be in force? Does it c ontinue after tariff reduction of these items?  
 
Answer:  
On 8 May 2000 the Australian Government announ ced the introduction of a new scheme called the 
Registered Automotive Workshop Scheme (RAWS) to administer the importation of used vehicles.  
This announcement followed a comprehensive review of the Motor Vehicle Standards Act 1989 , 
during which the Government carefully consider ed the most effective and equitable means 
of providing access to limited numbers of u sed imported vehicles to meet specialist and 
enthusiast interests.  The new RAWS arrangeme nts included the introduction of a Specialist and 
Enthusiast Vehicle Scheme (SEVS) to determine the eligibility of vehicle models for importation. WT/TPR/M/178/Add.1 
Page 92  
 
   
The RAWS and the associated legislation does no t have a defined end period.  However the 
Australian Government from time to time will revi ew the operation of the RAWS to ensure as far as 
possible that the scheme is delivering the desired outcome.  The continuation of the RAWS is not 
considered to be dependent  on the levels of tariffs. 
 Mexico:
 
 Question: (Paragraph 14) 
 
According to this paragraph, tariffs on certain imports were reduced and the tariff applying to 
imported business inputs under the tar iff concession system was removed.   
 What product sectors account for the most imports under the tariff concession system.   
 
What specific requirements must  the importing enterprises meet?  
 Answer: 
 
The range of products covered by the tariff concession system is ve ry extensive.  However, the 
volume of imports tends to congregate around certain tariff classifications.  
 Imports under the following tariff chapters account fo r around 65 per cent (or $A 13.5 billion) of total 
imports under the tariff concession system:  
32 - Dyes, pigments, paints, inks  and other colouring matter;  
84 - Machinery and other mechanical appliances;  85 - Electrical machinery and equipment and parts thereof;  87 - Vehicles and parts thereof; and  95 - Toys, games and miscella neous manufactured products 
 
Certain classes of goods including foodstuffs, clothing and passenger motor vehicles are on the 
Excluded Goods Schedule and are ineligib le for a Tariff Concession Order (TCO). 
 Any importer is eligible to apply for or use a TCO.  Eligibility for the tariff concession system 
requires that on the day an application is lo dged, with the Australian Customs Service, no 
substitutable goods were produced in Austra lia in the ordinary course of business. 
 
Pakistan:
 
 Question:  
According to the Secretariat report (Paragraph 9), Australian tariffs on primary products are 
considerably lower than on semi-processed goods. Thus, tariff escalation constitutes a potential 
obstacle for industrialization of developing countries.  Are there any plans to address this issue in the 
near future?  
Answer:  
Australia’s applied average tariff is 3.5 per cent.  For most sectors, tariffs are either zero or 5 per cent.  There are no plans to lower the 5 per cent genera l tariff.  The only escalation is between products 
which are duty free, and products subject to the general 5 per cent tariff.    WT/TPR/M/178/Add.1 
 Page 93 
 
 
  Of sectors where tariffs remain above 5 per cent,  Australia has legislated to reduce tariffs on 
automobiles, including components and parts, to no  higher than 5 per cent by 2010.  In the case of 
textiles, clothing and footwear, Australia has legislated to reduce tariffs in this sector to no higher than 
5 per cent by 2015.  Question:  Although Australian applied MFN tariffs are low, there are more than 40% of bound rates currently 
exceeding applied MFN rates by at least 5 percentage points. Is Australia keeping this differential as 
a policy space for future adjustment? 
 
Answer 
 
Australia has in place a legislated program of ta riff reductions to 2015.  The difference in bound and 
applied tariffs arises entirely from the continuing program of unilateral tariff liberalization undertaken 
by Australia.  It is in no way refl ective of any desire for “policy space”. 
 
Question: 
 According to the Secretariat report (Paragraph 9), Australian tariffs on primary products are 
considerably lower than on semi-processed goods. Thus, tariff escalation constitutes a potential 
obstacle for industrialization of developing countries.  Are there any plans to address this issue in the 
near future?  Answer: 
 Australia’s applied average tariff is 3.5 per cent.  Fo r most sectors tariffs are no higher than 5 per cent.  
Australia has legislated to reduce to tariffs on automobiles, including components and parts to no 
higher than 5 per cent by 2010.  In the case of te xtiles, clothing and footwear, Australia has legislated 
to reduce tariffs in this sector to no higher than 5 per cent by 2015.  Australia also provides duty free 
and quota free access for all products  from least developed countries. 
 Question:  Although Australian applied MFN tariffs are low, there are more than 40% of bound rates currently 
exceeding applied MFN rates by at least 5 percentage points. Is Australia keeping this differential as 
a policy space for future adjustment? 
 
Answer: 
 
Australia has in place a legislated program of ta riff reductions to 2015.  The difference in bound and 
applied tariffs reflects the continuing program of unilateral tariff liberalization undertaken by 
Australia.  Peru:
 
 Question:  
According to the Secretariat Report (page 32), th e average tariff on agricultural products is low 
(1.3 per cent).  The Report also states that Au stralia applies specific and compound rates to a group 
of products, and so-called "alternate" rates to fr uit juices.  Could Australia specify how these 
alternate rates are defined and calculated? 
 WT/TPR/M/178/Add.1 
Page 94  
 
  Answer: 
 
As the Secretariat report states, the applied rate fo r these four fruit juice tariff lines (grapefruit juice 
and certain other citrus juices) is the lower of 5 per cent or a specific duty ($A 0.45/kg TSS).  This 
alternate rate ensured that in the previous move to an ad valorem duty, which took place after the 
Uruguay Round base period for agriculture tariffs , there was in no instance any increase upon what 
was the previously applicable specific duty rate.    In regard to calculation of the alternate rate of dut y, as set out in Additional Note 1 to Chapter 20 of 
the Australian customs tariff schedule, “For the purposes of 2009, "TSS" means total soluble solids as 
determined by the International Federation of Fr uit Juice Producers analysis method No. 8B, 1968.” 
 
Switzerland:
 
 Question: 
 
Para. 14 of the Secretariat’s report indicates that  more than 40% of Australia’s bound rates currently 
exceed applied MFN rates by at least 5 percent age points. How do you assess the degree of 
unpredictability thereby created ?   
 
Answer:  
 
As indicated in the Secretariat’s report, Australia  has not increased any applied tariffs during the 
period under review.  In fact, through the 1990s until  now Australia has pursued a legislated program 
of tariff reductions, which has provided transparency and predictability to Australia’s tariffs.  Despite 
Australia’s applied tariff rates having been redu ced to well below the WTO bound rates in many 
cases, Australia has not increased any applied ta riffs since the inception of the WTO, nor has 
Australia applied any GATT Article XIX safeguard measures to imports, nor has Australia sought to 
raise any tariff rates by use of GATT Article XXVIII.    
Thailand:
 
 
Question: (Paragraph 19)  The Secretariat Report states that Australia has a numb er of tariff assistance schemes (duty forgone) for 
local industry. Does Austra lia have any conditions tied to these schem es that eligible local industry must 
follow such as requirement(s) for production and/or export? 
 
Answer: 
 
Australia has a large number of tariff concession items , each with its own specific eligibility criteria.  
Most requirements relate to the nature, or specifi c characteristics of the goods being imported and/or 
its use within our economy.   For example, certain tariff concession items provide  duty-free access to goods intended to be used as 
an input for production for certain goods or industri es.  Those items do not require the exportation of 
the goods produced from the imported inputs.  
 Other items allow for the upfront removal of the duty payable on goods that:   
- would satisfy the drawback conditions for the exports; or 
- are imported for repair, alteration or indust rial processing and subsequent exportation.  WT/TPR/M/178/Add.1 
 Page 95 
 
 
  Turkey:  
 Question:  As the Secretariat Report reflects, tariff escalation par ticularly in textiles, clothing and leather as well 
as food, beverages and tobacco remains obstacle fo r developing countries’ exports to Australian 
market.  How does Australia consider to deal with  tar iff escalation which may   in result impede the  
industrialization of developing countries  within the DDA  ? 
 
Answer 
 
Australia’s applied average tariff is 3.5 per cent.  For most sectors tariffs are either zero or 5 per cent.  
In the case of tobacco all tariffs are at zero.  In th e case of textiles, clothing and footwear, Australia 
has legislated to reduce tariffs in  this sector to no higher than 5 per cent by 2015.  Australia also 
provides duty free and quota free access for a ll products from least developed countries. 
 In relation to the DDA, Australia supports ambitious  market access outcomes for both agriculture and 
non-agriculture market access.  Strongly harmonising  outcomes, such as that delivered by the Swiss 
formula without exceptions will compress bound tariffs  and substantially reduce escalation in bound 
tariffs. 
 
US:
 
 Question: 
 
Paragraph 14 on page 31 of the Secretariat repor t notes that there is at least a five percentage 
difference between Australia’s bound and applied rates.    Does Australia anticipate narrowing this dis parity?  If so, please outline the timeframe.    
 
Answer:  
 
Australia supports ambitious outcomes in the D oha Round negotiations for both agriculture and non-
agriculture market access to reduce bound tariffs.    
Australia also has a forward program of legislated  tariff reductions that will reduce Australian applied 
tariffs independently of any outcomes of WTO ne gotiations that would reduce bound tariff levels.  
 
Other charges affecting imports
 
 Argentina:
 
 
Question: (Paragraph 25)  Could Australia please explain the reasons underl ying the goods and services tax (GST) on imports 
and elaborate on the exceptions to its application?  We would appreciate further information on the 
reasons for the so-called wine equalization tax (W ET) and the basis on which its rate is determined. 
 WT/TPR/M/178/Add.1 
Page 96  
 
  Answer: 
 
In broad terms, the Australian goods and services tax (GST) is a tax on private consumption in 
Australia.  Consistent with this principle, im ports of goods into Australia attract GST.   
 
Certain goods because of their intrinsic nature (for example, basic food), are not subject to GST when 
supplied within Australia.  Similarl y, the importation of those goods will not attract GST.  In addition, 
importation of goods of insubstantia l value, ships and aircraft stor es, certain repair and warranty-
relation importations, and imports covered by the passenger and tran sport crew concessions will not 
attract GST.  In broad terms, these imports are not  taxable because they are not subject to Customs 
duty. 
 
The Australian wine industry has been subject to  an array of taxation measures over the years, 
commencing in 1930.  
The Government considered the taxation treatment of wine at the time of major tax reform leading to 
the development of the New Tax System in 1998.  Prior to the introduction of the New Tax System in July 2000 wine was subject to a wholesale sal es tax (WST) of 41 per cent.  The WST was an 
ad valorem  tax levied on the value of wine. 
 In considering the tax treatment of wine under the New Tax System the Government decided that it 
was appropriate to continue to tax wine on an ad valorem  basis.  Therefore the WST of 41 per cent 
was replaced with a Goods and Services Tax (GST) of 10 per cent and a WET of 29 per cent, which, 
like the old WST, is levied on the wholesale value of wine, before GST.  The WET rate was set to ensure that there was no significant change in the price of various wine products.   
 
Chinese Taipei:
 
 Question: 
(Paragraph 26) 
 An excise was introduced in 2002 on imported and dom estically produced ethanol for use as fuel. For 
the first year, however, the excise paid by domestic producers of ethanol was rebated. 
 
Our concern here is that the tax levied will function as a tariff. Could Australia please explain the 
reason for introducing the measure?   Answer: 
 
The measure is an excise levied on all ethanol for use as fuel at the rate equivalent to that applying to 
petrol.  The tax is applicable at the same rate to both imported and domestically produced ethanol for 
use as fuel.  
It is collected at the border for imported goods and is  imposed as an internal tax on domestic goods.  It 
does not function as a tariff.  Australia’s current ap plied tariff rate for undenatured ethanol used in 
fuel is 5 per cent; the WTO tariff binding is 8 per cent.  
 
EC: 
 
 
Question: 
 We note that under the 29% Wine Equalisation Tax (WET) a wine producer rebate was introduced 
from 1 October 2004, initially with a rebate of up to $A290000 per domes tic producer per financial  WT/TPR/M/178/Add.1 
 Page 97 
 
 
  year, but increasing to $A500000 from 1 July 2006. This  effectively means that first $A1.7mn worth of 
sales by domestic producers is free of the WET. We also note that an equivalent rebate was introduced for New Zealand prod ucers as from 1 July 2005. 
 Could Australia provide a justification for this discri minatory rebate and indicate whether, as part of 
its tax reforms or otherwise, it is considering ext ending the rebate to wine from other countries? 
 
Answer: 
 
Prior to the introduction of the Goods and Serv ices Tax (GST), both imported and domestic wine 
were subject to a wholesale sales tax of 41 per cent.  With the introduction of the GST on 1 July 2000, 
the wholesale sales tax on wine was replaced with th e Wine Equalisation Tax (WET) which is applied 
at the rate of 29 per cent of the wholesale value.  Wine producers, wholesalers and importers register ed for GST in Australia pay the WET through the 
Australian taxation system.  The WET is paid on a Business Activity Statement which is a periodic 
report on indirect tax liabilities.    The WET producer rebate scheme was announced in  the 2004-05 Budget to provide for a maximum 
amount of up to A$290,000 to each wine producer (or group of producers) each financial year.  
Legislative amendments to give effect to th is scheme came into force on 1 October 2004 under 
Division 19 of the A New Tax System (Wine Equalisation Tax) Act 1999 .   
 On 9 May 2006, the Australian Treasurer announced that from 1 July 2006 the maximum amount for 
the purposes of the producer rebate scheme would be increased to A$500,000 each financial year.  
This will effectively exempt around A$1.7 million of  wholesale wine sales from WET each year per 
wine producer (or group of producers) compared to  A$1 million per year under the previous scheme. 
 WET legislation does not exclude foreign producers fro m being able to access the rebate.  That is, the 
legislation does not specify that rebatable wine must  be produced or manufactured in Australia or that 
rebatable wine must be manufactured from grap es, other fruit, vegetables or honey grown and 
produced in Australia.  New Zealand and Australia have agreed specific administrative arrangements 
to better facilitate access to the scheme for New Zealand producers exporting into the Australian 
market.    The key information on the operation of the wine prod ucer rebate is contained in Division 19 of the A 
New Tax System (Wine Equalisation Tax) Act 1999, which can be accessed at the following link: 
http://www.comlaw.gov.au/ComLaw/Legislation/ ActCompilation1.nsf/0/AF0C6B711C465D37CA25
71F1000982D4/$file/ANTSWineEqualTax1999_WD02.doc  Fllowing is a link to the ATO ruling on the operati on of WET, which addresses the wine producer 
rebate at paragraphs 121-135:  http://law.ato.gov.au/atolaw/print.htm?DocNum=0000520189&Life 
=20041215000001-999912 31235959&DB=full&printTitle=Ruli ngs~Wine%20Equalisation%20Tax~ 
WETR%202004%2F1%20(Addendum%20exists)~W ine%20equalisation%20tax%3A%20the%20 
operation%20of%20the%20wine%20equalisation% 20tax%20system%20-%20Preamble%20(As% 
20at%2015%20December%202004)  The following addendum to the ATO ruling alters  certain paragraphs to accommodate changes, 
including the arrangements for New Zealand wine  producers and the increase in the rebate: 
http://law.ato.gov.au/atolaw/print.htm?Do cID=WTR%2FWT200401A%2 FNAT%2FATO%2F00001 
&PiT=99991231235958&Life=10010101000001-99991231235959  WT/TPR/M/178/Add.1 
Page 98  
 
  Following is a link explaining the operation of the producer rebate for producers of wine in 
New Zealand:  http://law.ato.gov.au/atola w/view.htm?docid=DWR/WT2006D1/NAT/ATO/00001 
 
Pakistan
 
 
Question: 
 Paragraph 26 of the Secretariat report provides that the excise duty on domestic ethanol is rebated 
for the first 12 months. This concession is not allowe d to the imported ethanol. Isn’t this a violation of 
Article III concerning National Treatment on internal taxation and regulation? 
 
Answer: 
 
An excise is levied on all ethanol for use as fuel at th e rate equivalent to that applying to petrol.  The 
tax is applicable at the same rate to both imported and domestically produced ethanol for use as fuel.  
It is collected at the border for imported goods and is imposed as an internal tax on domestic goods. 
 
Singapore
 
 Question:  
We understand that with the implementation of th e Cargo Management Reengineering (CMR) project, 
Australia would provide industry with “greater fle xibility in doing business with Customs through 
various communication options together with flexibl e processes to benefit low-risk clients”.  Could 
Australia elaborate on this project?  
Answer:  
 
As part of implementing the CMR project, Cust oms Integrated Cargo System (ICS) allows 
communications to be made via the Internet.  Prev iously, communication with the Australian Customs 
Service’s electronic systems required a dedicated link and purpose-built software. 
 
The new Customs Interactive facility  enables anyone, whether an indi vidual or business enterprise, to 
communicate various reports and declarations via a standard Internet connection. The only pre-
requisite is the possession of a suitable digital ce rtificate.  Further information on the Customs 
Interactive facility can be found a t: www.customs.gov.au/site/page.cfm?u=5735. 
 
“Confirming exporter” status was made available wi th the introduction of the ICS exports module in 
September 2004 (refer to section 114B of the Customs Act 1901 ).  An exporter may apply for 
confirming exporter status when the nature of th eir goods means that they are unable to lodge a 
complete and accurate declaration prior to export (for example, bulk goods such as wheat and coal 
where the actual weight or quantity, and therefore va lue, is not known until after the goods have been 
loaded for export).  Certain goods, such as those that will be the subject of a duty drawback claim, are 
excluded from confirming exporter arrangements. 
 If satisfied that the stat ed information is not available prior to exportation, the Australian Customs 
Service may grant the application by signing a notice in respect of the particular goods and the information not available before export.  This  authorises the exporter to amend their Export 
Declarations to provide full details of the info rmation not available before exportation as soon as 
practicable after exportation and not later than the time specified in the notice. 
 Provision exists within Customs legislation for an Accredited Client Program (ACP) applying to both 
imports and exports (refe r to provisions commencing at secti ons 71DB and 114BA, respectively, of  WT/TPR/M/178/Add.1 
 Page 99 
 
 
  the Customs Act 1901 ).  The Australian Customs Service is  currently consulting with industry and 
other government agencies to determine the best approach to implementing ACP. 
 
Question: 
 
As one size does not fit all, how does Australia fac ilitate the different needs of sectors it its customs 
procedures, such as in dealing with perishables with respect to minerals? 
 Answer:  
 Imported goods are subject to one of three forms of clearance procedure. 
 Goods falling within the definition of “specified low value goods” (i.e. goods va lued at $A 1,000 or 
less imported either as cargo or via the post) are cleared using a Self Assessed Clearance document (SAC) (refer to provisions commencing at section 71AAAD of the Customs Act 1901 ).  SACs come 
in three forms: 
 
- full form – effectively a formal import decl aration which is not subject to processing 
fees; 
- short form – an abbreviated versi on submitted by the owner of the goods; and 
- tick-box – an abbreviated version submitted with the cargo report. 
 
The full form SAC is to be used in relation to low value goods on which duty a nd tax is required to be 
paid i.e. alcohol and tobacco products, and low valu e goods that are subject to permit requirements.  
The short form SAC effectively constitutes a decl aration from the owner that the goods are free of 
duty, tax and permit requirements and are otherwise of no interest to the Australian Customs Service 
or the Australian Quarantine and Inspection Service.  A tick-box SAC is similar to a short form SAC 
but is submitted by the carrier of the goods in conj unction with their cargo report.  Carriers will only 
submit tick-box SACs where the information in th eir possession is sufficient to satisfy them in 
relation to the declarations they w ould be making on the owners behalf. 
 Goods falling within the definition of “Subdivi sion AA goods” (refer to provisions commencing at 
section 71AAAA of the Customs Act 1901 ), predominantly the accompanied personal or household 
effects of a passenger and low value goods (other th an alcohol or tobacco products) arriving via the 
post, are cleared based on the information available to the officer and such other information as the 
officer may require in order to determine that the goods are eligible for treatment as Subdivision AA 
goods.  Although the unaccompanied personal or household effects of a passenger are also 
Subdivision AA goods, their clearance is effected via an informal clearance doc ument or its electronic 
equivalent provided for in  the relevant provisions. 
 For all other goods, a formal import declaration (F ID) is required which may be lodged either by 
document or electronically (refer to provisions commencing at section 71A of the Customs Act 1901 ).  
Fees apply in relation to the processing of all FIDs.  The fees applicable to documentary FIDs are 
higher reflecting the additional work  involved in their processing. 
 For the most part, the requirements and procedures  applicable to each type of clearance apply 
uniformly irrespective of the nature of the goods.  
Provision exists for facilitating the clearance of perishable goods and certain other time sensitive 
goods (refer to section 70 of the Customs Act 1901 ).  However, such facilitation should not normally 
be necessary.  Legislative requirements in relation to  the timing of the various reports and declarations 
- carriers of goods are obligated to report their cargo es before their arrival in Australia; owners of 
goods are permitted to lodge entries in advance of th e arrival of goods – afford the opportunity to WT/TPR/M/178/Add.1 
Page 100  
 
  minimise delays for such goods.  Provided no impe diments are encountered during their processing, 
the Australian Customs Service aims to communicate a clear status within 30 minutes of the payment 
of a complete and accurate declaration covering goods  that have arrived at their port of discharge. 
 
Question: 
 
To what extent is the Australian customs clearanc e process paperless?  If it is fully paperless, can 
Australia elaborate on its clearance process, for all modes and containerised/conventional cargo?  
Relatedly, is Australia using electronic carnets for temporary admission of goods? 
 
Answer: 
 
The Australian Customs Service’s clearance proce ss is not as yet paperless.  Provision still exists 
within legislation and processes for various repor ts to be lodged as documents.  However, the 
legislation also requires that where certain circumstances apply electronic communication is required 
(e.g. impending arrival, arrival and cargo reports in  relation to vessels or aircraft that will be 
discharging goods in Australia (refer to sections 64(4), 64AA(5) and 64AB(4) of the Customs Act 
1901 )), and that where certain reports or declarations  have been lodged electronically, all subsequent 
communications in relation to those reports or declar ations must be electronic (e.g. authorities to deal 
in relation to an electronic declaration (refer to section 71C(4)(d) of the Customs Act 1901 )). 
 
Where further information is required in relation to the processing of an electronic import or export 
declaration, while the request for that information must be electronic (refer to section 71DA(4) of the 
Customs Act 1901 ), it may require the owner of goods or their agent to present documents to the 
Australian Customs Service.  
Although documentary alternatives still exist, they currently represent a minimal percentage of the 
volume of reports and declarations processed by the Australian Customs Service.  Australia is not currently using electronic carnets for the temporary admission of goods. 
 
US:
 
 
Question:  In paragraphs 25 and 26 on pages 37 and 38, the S ecretariat report notes that aside from custom 
duties, a wine equalization tax (WET) is applied to  domestic and imported wine at a 29 percent rate.  
However, we understand that under the WET rebat e scheme, domestic wine producers are entitled to 
a rebate of 29 percent of the wholesale value of domestic sales up to a total of A$1 million. 
 Please provide further clarification on the WET, sp ecifically, how it works and to whom it is applied. 
 If in fact domestic producers are entitled to this re bate, has such eligibility been extended to other 
foreign wine producers?  If yes, is Australia cons idering revisiting this scheme to avoid subjecting 
imported wine to internal ta xes not applied domestically?   
 
Answer: 
 Prior to the introduction of the Goods and Serv ices Tax (GST), both imported and domestic wine 
were subject to a wholesale sales tax of 41 per cent.  With the introduction of the GST on 1 July 2000, the wholesale sales tax on wine was replaced with th e Wine Equalisation Tax (WET) which is applied 
at the rate of 29 per cent of the wholesale value.   WT/TPR/M/178/Add.1 
 Page 101 
 
 
  Wine producers, wholesalers and importers register ed for GST in Australia pay the WET through the 
Australian taxation system.  The WET is paid on a Business Activity Statement which is a periodic 
report on indirect tax liabilities.    The WET producer rebate scheme was announced in  the 2004-05 Budget to provide for a maximum 
amount of up to A$290,000 to each wine producer (or group of producers) each financial year.  
Legislative amendments to give effect to th is scheme came into force on 1 October 2004 under 
Division 19 of the A New Tax System (Wine Equalisation Tax) Act 1999 .   
 On 9 May 2006, the Australian Treasurer announced that from 1 July 2006 the maximum amount for 
the purposes of the producer rebate scheme would be increased to A$500,000 each financial year.  
This will effectively exempt around A$1.7 million of  wholesale wine sales from WET each year per 
wine producer (or group of producers) compared to  A$1 million per year under the previous scheme. 
 WET legislation does not exclude foreign producers fro m being able to access the rebate.  That is, the 
legislation does not specify that rebatable wine must  be produced or manufactured in Australia or that 
rebatable wine must be manufactured from grap es, other fruit, vegetables or honey grown and 
produced in Australia.  New Zealand and Australia have agreed specific administrative arrangements to better facilitate access to the scheme for New Zealand producers exporting into the Australian 
market.    
The key information on the operation of the wine prod ucer rebate is contained in Division 19 of the A 
New Tax System (Wine Equalisation Tax) Act 1999, which can be accessed at the following link: 
http://www.comlaw.gov.au/ComLaw/Legislation/ ActCompilation1.nsf/0/AF0C6B711C465D37CA25
71F1000982D4/$file/ANTSWineEqualTax1999_WD02.doc  
Fllowing is a link to the ATO ruling on the operati on of WET, which addresses the wine producer 
rebate at paragraphs 121-13 5:  http://law.ato.gov.au/ato law/print.htm?DocNum=0000520189& 
Life=20041215000001- 99991231235959&DB=full&printTitle=R ulings~Wine%20Equalisation%20 
Tax~WETR%202004%2F1%20(Addendum%20exists) ~Wine%20equalisation%20tax%3A%20the% 
20operation%20of%20the%20wine%20equalisati on%20tax%20system%20-%20Preamble%20(As% 
20at%2015%20December%202004) 
 
The following addendum to the ATO ruling alters  certain paragraphs to accommodate changes, 
including the arrangements for New Zealand wine  producers and the increase in the rebate: 
http://law.ato.gov.au/atolaw/print.htm?Do cID=WTR%2FWT200401A%2 FNAT%2FATO%2F00001 
&PiT=99991231235958&Life=10010101000001-99991231235959 
 
Following is a link explaining the operation of the producer rebate for producers of wine in New Zealand:  http://law.ato.gov.au/atolaw /view.htm?docid=DWR/WT2006D1/NAT/ATO/00001 
 
Customs valuation and rules of origin
 
 
Argentina:  
 Question:  Could Australia provide statistics on the relative use of the different customs valuation methods 
during the period in question? 
 Answer:  
 
For the calendar year 2006, the type and propor tion of valuation methods were as follows: WT/TPR/M/178/Add.1 
Page 102  
 
  Valuation method Number of declaration lines Percentage 
Transaction value 11,443,383 98.68% 
Fallback method 15,570 0.13% 
Computed value method 15,125 0.13% 
Identical goods method 119,708 1.03% 
Deductive value method 564 0.00% 
Similar goods method 2,208 0.02% 
Totals 11,596,558 100% 
 
Import prohibitions, restrictions, and licensing  
 
Argentina:  
 Question: Table III.4  
Could Australia tell us what the restrict ions referred to in this table are? 
 Answer: 
 
Details regarding Australia's import restrictions are provided in Australia's 2006 Notification under 
Article 7.3 of the Agreement on Import Licensing Procedures (G/LIC/N/3/Aus/3).  
 China:
 
 Question: (Paragraph 32) 
 
Australia started import and export prohibitions on asbestos in 2003, but it did not specify if 
chrysotile asbestos were included. In 2006, Aust ralia amended its Customs regulations concerning 
prohibited products, which added pr oducts containing chrysotile asbestos onto the list of prohibited 
imports. To our knowledge, there is still no conclusive scientific proof internationally as to whether 
chrysotile asbestos products are harmful to human health or not.  
 
Could Australia please explain the scientific gr ounds on which the above-mentioned measures are 
taken?   Answer: 
 
In G/TBT/N/AUS/7 of 2 November 2001, Austra lia notified the proposal to cease the use of 
chryostile asbestos in Australia.  As set out in that notification, asbestos is a known human 
carcinogen.  Formal bans on asbestos, other than chry sotile, were already in pl ace in most Australian 
States and Territories.  The objective of the propo sal was to reduce future death and illness from 
exposure to asbestos fibres. 
 The notification referred to a Public discussion pa per released by the National Occupational Health 
and Safety Commission (NOHSC) and a number of  supporting documents.  The public discussion 
paper can currently be found at: http://www.ascc. gov.au/ascc/newsevents/mediareleases/2001/public 
commentsoughtonproposedprohibitiono ntheuseofchrysotileasbestos.htm on the website of Australian 
Safety and Compensation Council, the successor organisation to the NOHSC. 
  WT/TPR/M/178/Add.1 
 Page 103 
 
 
  Contingency measures  
 Korea:
 
 
Question: 
(Paragraphs 5, 24) 
 
As pointed out in paragraph 35 of the Secretariat's Report, the number of anti-dumping investigations 
initiated has declined greatly si nce the year 2003. However, Australia has initiated a total of 188 
anti-dumping investigations on pr oducts imported from foreign count ries since 1995 (as of June 30, 
2006), which puts Australia sixth place in the list of countries that frequently resort to such measures. 
 
Even an initiation of an investigation considerabl y burdens the company under investigation as the 
company must pay additional fees in order to respond  the investigation. Such burden leads to a 
decline in business activities.  
 
Anti-dumping measures should be used in exceptional cases to protect domestic industries from unfair 
foreign trade practices. Korea requests Australia to  take a more prudent appr oach in initiating anti-
dumping investigations  by strictly applying investiga tion conditions in order to avoid such measures 
from being abused as tools to protect domestic indus tries. Korea also requests that Australia enhance 
fairness and transparency in investigation proce dures. Does Australia have plans to review and 
improve the system?    
 Answer: 
 
In accordance with WTO rules, the Australian Government will continue to maintain an effective anti-
dumping system that gives Australian industries access to remedies to address dumped imports that cause material injury.    Anti-dumping activity occurs in response to complaints  lodged by industry.  Complaints are subject to 
a statutory screening process.  Australian Customs examines each application lodged and investigates 
using transparent WTO-consistent methodology.  Australia's application of its anti-dumping 
procedures is based on the standards required under the WTO Anti-Dumping Agreement.    The Australian anti-dumping system places emphasis on transparency and procedural fairness, with 
all interested parties being invited to comment on all aspects of the case.  
 Australia maintains a public file system for each i nvestigation, review and continuation inquiry.  The 
public file is available to interested parties and c ontains non-confidential copies of all applications by 
Australian industry and submissions from interested parti es.  It is expected that an electronic copy of 
the public file will be available in mid 2007. 
 
The Minister for Justice and Customs and the Minister for Industry, Tourism and Resources recently announced the recommendations of the Joint Study in to Australia’s anti dumping arrangements.  The 
study commenced in February 2006.  Twenty-seven  submissions were received and are available on 
Customs' website (refer to www.customs.gov.au a nd follow prompts for “Anti Dumping” and “Joint 
Study”). 
 The study made a number of recommendations in four areas of administrative practice that impact on the effectiveness of Australia’s anti-dumping regime – access, transparency, conduct of investigations 
and post imposition of measures.    WT/TPR/M/178/Add.1 
Page 104  
 
  In April 2005, the Productivity Commission released  its Inquiry Report into Review of National 
Competition Policy Reforms.  The Commission obser ved that there had not been a review of 
Australia’s anti-dumping legislati on although scheduled as part of the Legislative Review Program 
under the National Competition Policy.  
The January 2006 report of the Taskforce on Reducing Regulatory Burdens on Business (Rethinking 
Regulation) recommended that the Australian Governme nt expedite an indepe ndent public review of 
Australia’s anti-dumping arrangements to examine both administrative and policy aspects, including 
an assessment of practical ways of reducing compliance costs.  
The Government’s response to the Banks Review accepted recommendation 5.53 that an independent 
public review of Australia’s an ti-dumping arrangements to examin e both the administrative and 
policy aspects of the system be undertaken.  The timing of the review has not been announced.  Australia does not agree that anti-dumping measures should be used in exceptional circumstances to 
protect domestic industries from unfair foreign trade practices.  The WTO Anti-Dumping Agreement, 
which implements Article VI of GATT 1994, sets out the requirements for addressing injurious 
dumped imports in a WTO-c onsistent fashion.   
 Australia would like to draw Korea’s attention to  the number of anti-dumping measures imposed by 
Australia following investigation.  Of the 188 anti- dumping investigations initiated since 1995, only 
69 measures have been imposed (compared to Korea’ s 82 initiations and imposition of 47 measures).   
 
Malaysia:
 
 
Question: 
 Could Australia confirm that the procedures for safeguard investigations (as published in Gazette 
No.S297 of June 1998 and amended in 2005), the Productivity Commission Act 1998 and the Custom 
Act 1901 the only procedures and laws relating to sa feguard measures? Does Australia intend to have 
a dedicated safeguard legislation? 
 
Answer: 
 
Australia confirms that the above-mentioned are the current relevant procedures relating to safeguard 
measures.  Australia does not intend to have dedicated safeguard legislation. 
 
Standards and other technical requirements
 
 
Canada:  
 
Question: 
(Paragraph 12)  The Secretariat report states that with respec t to sanitary and phytosanitary (SPS) measures 
“according to the authorities, as international stan dards do not exist in some areas, the share of 
national standards that are equivalent to in ternational standards remains at around 40%.” 
 In cases where international standards do exist, coul d Australia please specify the percentage of its 
SPS related national standards that are not equivalent to international standards? 
  WT/TPR/M/178/Add.1 
 Page 105 
 
 
  Answer: 
 
Paragraph 12 of the Secretariat Report’s Summary Observations mixes together two separate issues, SPS measures and Australia’s national standards.  The 40 per cent figure used by the Secretariat refers 
to Standards Australia’s national standards, wh ich do not include SPS measures.  Any effort to 
quantify the share of Australian national sta ndards (excluding SPS measures) equivalent to 
international standards is complicated because in ma ny instances there are no equivalent international 
standards.  Where alignment with international standards is possible, 97 per cent of Australian 
standards (excluding SPS measures) are so aligned.   Of the 2,743 instances where alignment with 
international standards is possible, (i.e. an interna tional standard covers the same subject as a national 
standard), 2,328 (85 per cent) were adopted withou t modifications, 338 (12 per cent) were modified 
for adoption, and the remaining 77 (3 per cent) have  not been adopted because there is no need for a 
standard in Australia.  No analysis has been unde rtaken that compares Aust ralia’s SPS measures with 
relevant international standard, where they exist.   Australia has a science-based quarantine system 
consistent with its obliga tions under the SPS Agreement. 
 
Chile:
 
 Question: (Paragraph 39)  
With regard to regulatory standards, can those in terested acquire information on these measures 
from Standards Australia?  Answer: 
 The Federal Register of Legislative Instrume nts commenced operation on 1 January 2005.  The 
Register is a comprehensive, easily accessible data base that contains all Commonwealth legislative 
instruments, including in relation to mandatory stan dards and conformance measures.  The Register is 
available at http://www.comlaw.gov.au.  Furthe r operational details on individual measures are 
available in each case from the relevant regulatory agency website.  
Standards Australia is a non-gove rnment organisation, which has no direct role in (mandatory) 
technical regulation.  However, Australian Standards that are referenced in legislation/regulation are 
available online at: http://www.standards.com.au  
Question: 
(Paragraph 42) 
 Where is control exercised over products which require mandatory certification? Does Customs 
exercise any control?  Answer: 
 
Australian regulators use a range of control meas ures including reliance on supplier declaration of 
compliance, pre-market certification/approvals and post market surveillance.  The level of control 
used by regulators in relation to a product is depende nt on the likely level of risk to human health and 
safety. 
 
The importation of certain goods into Australia is prohi bited or restricted and this is enforced at the 
boarder by the Australian Customs Service using appr opriate risk management techniques.  Details of 
prohibited or restricted goods can be obtained at the following website:  http://www.customs.gov.au/ site/page.cfm?u=4369.  WT/TPR/M/178/Add.1 
Page 106  
 
  Question: 
(Paragraph 47)  Does Australia have applicable legislation (inclu ding sanctions) for those certifying bodies or 
laboratories located in Australia, which fail to comp ly with their obligations with respect to products 
to be exported to third markets in which evidence and certification are accepted by virtue of mutual 
recognition agreements?  
 Answer:  
 There is no specific legislation or sanctions under Au stralian law for these circumstances.  There are, 
however, avenues available under Australia's common law.  In relation to organisations accredited by the Na tional Association of Testing Authorities (NATA), 
Australia's member of ILAC and APLAC, NATA's ru les provide for actions and sanctions that NATA 
may invoke in circumstances where a laboratory does not comply with the conditions of its 
accreditation.  Details are available at this website: http://www.nata.asn.au/go/publications 
 
China:
 
 Question: 
(Paragraph.38) 
 Legislation and administration regimes relating to  technical regulations and standards of the 
Australian Commonwealth are different from those of  the State and Territory governments. This may 
constitute unnecessary barriers to international trade of relevant products, and increase the difficulty 
of market access for products from other Members including China.  
 Answer: 
 
Under Australia's constitution, power is shared  between the Commonwealth Government and the 
Australia States and Territories.  In some areas th e Commonwealth regulates while in others the States 
and Territories undertake regulatory responsibilities.  While there may be differences in the way the 
States and Territories regulate certain products the 1992 Mutual Recognition Agreement provides that 
a good that is legally saleable in one State/Territo ry is then by law legally saleable in all other 
States/Territories without the need to meet any fu rther sale related regulatory requirements.  In 
essence this means that if a product is imported into  an Australian State/Territory and it meets the 
regulatory requirements of that State/Territory it can then be sold in all the other States/Territories in 
Australia. 
 
Question:  We understand that Australia currently subjects 63  types of electro-mechanic products to safety 
certification, which takes at least 2 to 3 months to proceed.  
Does Australia have any plan to simplify the cer tification procedures? Is Australia willing to 
negotiate an agreement with China on the mutual recognition of safety certification of these products 
in order to facilitate bilateral trade?  
 
Answer:  
Electrical safety regulation is under State/Territory  jurisdiction.  As outlined above, the Mutual 
Recognition Agreement applies to electrical goods su ch that if the good is approved for sale in one 
State or Territory then it can be sold throughout Australia (and New Zealand).  WT/TPR/M/178/Add.1 
 Page 107 
 
 
  Under existing arrangements Australian electrical safet y regulators will accept test reports from ILAC 
and APLAC MRA members as well as the IEC CB scheme.  This allows Chinese manufacturers and exporters to have their products tested to th e applicable Australian standards by accredited 
laboratories within China prior to export which coul d result in a significant reduction in lead times. 
 
This is in contrast to the situation that Australia  faces when it exports prod ucts covered by the CCC 
mark to China.  Under the current arrangements Ch ina does not allow for testing and certification of 
products to be undertaken outside of China.  This results in costly and time  consuming retesting and 
certification.  
China and Australia are in the process of negotiating a Free Trade Agreement.  To date China has not 
been willing to consider the acceptance of conf ormity assessment procedures undertaken outside of 
China.  Given that this is the basis of most MR As it not clear how an MRA on electrical safety could 
be negotiated. 
 
Japan:
 
 Question: (Paragraph 47) 
 
Paragraph 47 refers to Governmental MRAs between Australia and other coun tries. Regarding this, it 
is written “The Committee notes that the mutual in troduction of cross-border designation systems in 
equivalent fields by governments can be a cost -effective agreement.” in paragraph 39 of the WTO 
document (G/TBT/19) “FOURTH TRIENNIAL REVIEW OF THE OPERATION AND 
IMPLEMENTATION OF THE AGREEMENT ON  TECHNICAL BARRIERS TO TRADE UNDER 
ARTICLE 15.4,” completed in Nov. 2006.  
Article 6.4 of the WTO TBT Agreement stipulat es that “Members are encouraged to permit 
participation of conformity assessment bodies locate d in the territories of other Members in their 
conformity assessment procedures under conditions no less favourable than those accorded to bodies 
located within their territory or the territory of any other country.” 
 And it is also written, “The Committee renews its encouragement of Members to allow the 
participation of conformity assessment bodies locate d in the territory of other Members in their 
conformity assessment procedures, on a non-discriminat ory basis, as stated in Article 6.4.” in 
paragraph 36 of the WTO document “FOURTH  TRIENNIAL REVIEW OF THE OPERATION AND 
IMPLEMENTATION OF THE AGREEMENT ON  TECHNICAL BARRIERS TO TRADE UNDER 
ARTICLE 15.4.”  
If Australia adopts the cross-border designatio n system, the adoption will contribute to trade 
facilitation for foreign manufacturers willing to export to  Australia. At the same time, this will enable 
Australian companies investing in countries outside Au stralia to acquire certifications of products by 
CABs designated under Australian laws in the c ountries outside Australia, where the production cost 
is low, and quickly forward them to the Australia n market with lower cost for certifications. It is 
beneficial for Australian companies because investment  in such countries where the production cost is 
low can be promoted. In this way, it is beneficial not only for trade partners of Australia but also for 
Australia itself. 
 
Are there cross-border designation systems wher e Australian regulatory authorities can directly 
designate Conformity Assessment Bodies (CABs) in  foreign countries based on Australian law? If 
there are such cross-border designa tion systems, Japan requests Australia to inform Japan of the 
name of the law. If there is no such cross-bor der designation system, Japan would like to know WT/TPR/M/178/Add.1 
Page 108  
 
  whether Australia has legal provisions that make it impossible to designate CABs outside Australia. 
Furthermore, what is the logic or  background behind those provisions?  
 
Answer:  
There are a number of regulators that allow for the acceptance of accredited test reports from bodies 
outside of Australia.  These are generally based on mutual recognition arrangements entered into by 
the National Association of Testing Authorities, Australia (NATA) under the auspices of ILAC and 
APLAC. 
 In particular, while the relevant Australian legisl ation/regulation may specify that testing by a NATA 
accredited laboratory is required it may also a llow a NATA MRA partner laboratory in another 
country to fulfil this requirement.   
Details of some of these arrange ments can be found at the following website:  http://www.nata.asn.au/ 
go/about-nata/specification-of-nata-by-government-agencies.  
Question: 
 
Although the answer from the Australian government  refers to mutual recognition arrangements in 
the field of testing laboratories, our question also covers certification bodies. In this regard, please 
provide information on the following questions. 
 Japan would like to be informed whether Aust ralian regulatory authorities can directly designate 
certification bodies outside of Australia based on Australian law.   
Answer: 
 
Similar to testing laboratories, this is dependent  on the specific legislation under which regulators 
work.  Legislation may specify that certification ha s to be made by a Joint Accreditation System of 
Australia and New Zealand (JAS-ANZ) accredited certif ication body, or it may allow the regulator to 
accept certification from bodies outside of Australia  if the regulator has confidence that the 
certification meets the regulatory need.  Under Australia's MRAs with Europe and Singapore, 
regulators accept certification undertaken by certifi cation bodies designated by our mutual recognition 
arrangement (MRA) partners in sectors covered by the relevant agreement. 
 
Question: 
 
If there is no such system, Japan would like to know whether Australia has  
legal provisions that make it impossible to d esignate certification bodies outside of Australia. 
Furthermore, what is the logic or  background behind those provisions? 
 
Answer: 
 See above answer. 
 
Question: 
 
Regarding the field of testing laboratories, Japan would like to confirm that Australia does not have such a system in domestic laws, but Australian regulat ory authorities accept test  reports from testing 
laboratories outside of Australia, based on MoU (Memorandum of Understanding) between the 
government of Australia and NATA. 
  WT/TPR/M/178/Add.1 
 Page 109 
 
 
  Answer: 
 
As outlined previously, legislation/regulation ad ministered by a number of Australian regulators 
allows for the acceptance of accredited test reports  from bodies outside of Australia.  In particular, 
while the relevant Australian legislation/regula tion may specify that testing by a NATA accredited 
laboratory is required, it may also specify that a test report from a NATA MRA partner laboratory in 
another country can also fulfil the regulat ory requirement (examples can be found at: 
www.nata.asn.au/go/about-nata/specificati on-of-nata-by-government-agencies). 
 The basis for this acceptance of test reports from bodies outside of Australia is in 
legislation/regulation and is not directly related to the MoU between the Australian Government and 
NATA. 
 
Sanitary and phytosanitary regulations
 
 
Argentina:  
 Question: (Paragraph 53)  Could Australia advise whether it has proceeded  to implement the new import risk analysis 
procedures scheduled to be implemented in earl y 2007? In this regard, and notwithstanding the 
limited time which has passed, is it possible to ma ke any assessment of the benefits of this new 
procedure?  
 
Answer: 
 
The reforms to Australia’s import risk analysis (IRA)  process are expected to take effect in the first 
half of 2007 once regulations being made under the Quarantine Act 1908  come into force.  Australia 
will review the effectiveness of the reforms after they have been in ope ration for an adequate period.   
 
Brazil:
 
 
Question:  Australia recognizes that it has “a conserva tive approach to quarantine”, although adopting 
scientific criteria for import risk analysis (IRA). Ho wever, there are occasions  in which Australian 
authorities seem to be more restrictive than would be required by strictly scientific criteria. In 
particular, there have been instances of shipments retained until “additional information”, unspecified in the Australian law and sanitary ag reements. Does the Aust ralian government expect 
the revised IRA process referred in paragraph 53 of the Secretariat report to ensure transparency and 
predictability of import operations?    
 
Answer: 
 
Australia will improve the predictability and transp arency of the import risk analysis (IRA) process 
by: 
- imposing maximum timeframes for the co mpletion of IRAs through regulation; 
- the regulation will provide for a standard  or expanded IRA process, depending on the 
complexity of the science and nature of the biosecurity risks.  Standard IRAs will be 
completed within 24 months and e xpanded IRAs within 30 months; 
- imposing time limits for certain steps of IRAs through regulation; WT/TPR/M/178/Add.1 
Page 110  
 
  - providing public notices to: 
− advise the commencement of an IRA and whether it will be conducted as an 
expanded or standard IRA; 
− seek stakeholder submissions on reports,  
− advise if the overall timeframe will be suspended, the reason why and when 
the IRA will restart; and 
− consult with trading partners and advi se stakeholders if an IRA is to be 
terminated 
− clarifying the information required from exporting countries to commence an 
IRA; and 
− publishing Australia’s IRA work program. 
 Further information on the IRA reforms may be found at: http://www.daff.gov.au/ira-review. 
 
Canada:
 
 
Question: (Paragraph 53)  The Secretariat report describes recent policy changes to the impor t risk assessment process (IRA) 
designed to make IRAs more transparent, effic ient, timely and predictable. Canada commends 
Australia on these policy changes. 
 Could Australia elaborate on whether or not it has  in place, or plans to implement, a review 
mechanism to evaluate the effectiveness of the recen t changes to the IRA process and determine their 
impacts on its transparency, efficie ncy, timeliness and predictability?  
 
Answer: 
 
Australia will review the effectiveness of the re forms after they have been in operation for an 
adequate period.    Question: (Paragraph 53)  The Secretariat report states that under the new IRA process “a standard IRA will be completed 
within 24 months, and an expanded IRA (if there are significant differences in scientific opinion or 
significant biosecurity risk) within 30 months, of an announced commencement date of the process.” 
 Given Australia’s strict appropriate level of pr otection (ALOP) (which is described on page 46, 
paragraph 48 as “providing a high level of sanitary and phytosanitary protections aimed at reducing 
risk to a very low level, but not zero”), could Austra lia explain how it will determine what constitutes 
a significant biosecurity risk? 
 
Answer: 
 
A significant biosecurity risk is considered one wher e significant harm to humans, animals, plants or 
the environment may result from any importation. 
 
Question: 
 What situation, if any, could lead Australia to delay the announcement of a commencement date for a given IRA process?   WT/TPR/M/178/Add.1 
 Page 111 
 
 
  Answer: 
 
A high level group will be established in the Departme nt of Agriculture, Fisheries and Forestry to 
allocate priority to import proposals, and to m onitor Biosecurity Australia’s progress on IRAs.  
Stakeholders will have the opportunity to put their vi ews on priorities.  The criteria used to guide this 
group in allocating priorities will be  publicly available.  Biosecurity  Australia will take account of the 
allocated priorities in developing its work progr amme, and will make this information publicly 
available.  
Canada
 
 
Question:  On September 7, 2005, the Canadian Food Inspection Agency (CFIA) wrote to the Australian Government Department of Agriculture, Fisheries and Forestry to request that  Australia reassess and 
reconsider the risk and associated interim restrictions im posed by Australia related to the detection of 
BSE in Canada which prohibit the importation of Canadian live cattle, beef and beef products.  In 
reassessing the risk, CFIA requested that full cons ideration be given to the amended BSE guidelines 
provided for in the International Terrestrial An imal Health Code of the World Organization of 
Animal Health (OIE) which were supported by Austra lia at the time of the adoption in May 2005.  
CFIA has so far not received a response to its Se ptember 2005 letter.  Our High Commission has on 
several occasions been advised that consideration of our request is pending the outcome of 
Australia's review of its BSE import policy.  Ou r understanding is that Australia's BSE import policy 
review's recommendations were considered by th e Australian Government in September 2005.  
 
Canada would like to request an update on the status of the BSE import policy recommendations 
which we understand were considered by the Au stralian Government in September 2005 and an 
update on the status of Australia's reply to CFIA 's September 5, 2005 letter.  In particular, Canada 
would welcome a response as to when Australia would be prepared to remove its interim restrictions 
on Canadian live cattle, beef and beef products, in accordance with OIE standards.  Answer: 
 
A review of BSE food safety policy was finalised in September 2005.  The review is still being 
considered by the Australian Government.  Un til government processes are complete, no specific 
details can be provided on the review’s recommendations. 
 
In a letter dated 19 September 2005, the Australia n Chief Veterinary Officer responded to a letter 
from the Canadian Chief Veterinary Officer, thanki ng Canada for keeping Australia informed of the 
measures it has undertaken to protect human and animal health, following confirmation of BSE in cattle in Canada.  Updates have since been provi ded in response to requests from the Canadian High 
Commission in Canberra as well as through numerous b ilateral discussions between officials.   
 China:
 
 Question: (Paragraph 48-49)  
In terms of sanitary and phytos anitary measures, risk analysis of imported flora and fauna products 
are time-consuming and to the relevant technical regulations are ambiguous. This creates difficulties 
to agricultural imports from its  trading partners. China is affected on fruits, vegetables and some 
economic crops. The rigorous sanitary and phytos anitary measures on agricultural imports have 
created unnecessary barriers to the normal trade between China and Australia. WT/TPR/M/178/Add.1 
Page 112  
 
  How does Australia envisage to do to correct this situation? 
 Answer: 
 
Australia has a science-based quarantine system consistent with its obligations under the SPS 
Agreement.  Under the SPS Agreement, Australia h as the right to set its own appropriate level of 
protection (ALOP) and to take SPS measures in orde r to achieve this ALOP.  Australia’s ALOP is 
expressed as providing a high level of sanitary or phyt osanitary protection aimed at reducing risk to a 
very low level, but not to zero.  Question:  In December 2006, Australia published its ri sk assessment report on imported prawn and prawn 
products and announced its intention to take strict er risk control measures on these products. The 
new measure adopted by Australia in this regard will prolong the process of quarantine and 
inspection, further increase the costs for foreign exporters, hence virtually close the door for any 
prawn import, which would also impair the in terests of Australian importers and consumers.  
Could Australia elaborate on the legal and sci entific basis for such stringent measures? 
 Answer: 
 Biosecurity Australia issued a revised draft IR A report for prawns and prawn products for human 
consumption for public comment on 23 Nove mber 2006. The draft report is a thorough and 
comprehensive review of current scientific informat ion.  The draft report c oncludes that the current 
quarantine controls for existing prawn imports need to  be strengthened in order to achieve Australia’s 
appropriate level of protection (A LOP).  This is consistent with  Australia’s rights under the SPS 
Agreement. Australia’s ALOP is expressed as provi ding a high level of sanitary or phytosanitary 
protection aimed at reducing risk to a very low le vel, but not to zero.  Over 50 submissions were 
received from stakeholders on the draft IRA report..  Biosecurity Australia and the IRA team of aquatic experts are now considering the technical  comments in order to prepare a final report. 
 
Question: 
 
On 28 August 2006, Food Standards Australia New Zealand (FSANZ) announced its intention to revise the Australia and New Zealand Food Standa rds Code to amend maximum residue allowances 
for pesticide and veterinary drugs.   
We would be interested in knowing when Australia plans to make public the revised Code. In the 
process of revision, will Australia notify it to the WTO and provide opportunities for other Members 
to comment?  
 Answer: 
 The notifications refer to amendments to the Aust ralia New Zealand Food Standards Code relating to 
Application A574 - Maximum Residue Limits (Ja nuary, February, March 2006) and Application 
A582 - Maximum Residue Limits (April, May, June  2006).  The draft amendments where notified to 
the WTO on 22 August 2006, with a comment period until 6 October 2006.  An indicative timeframe 
for the draft amendment to take effect was included in that notification.  In accordance with this time 
line, the amendments arising from both these Applic ations were gazetted on 15 February 2007 and the 
updated Standard 1.4.2 (part 2) is public ly available from the FSANZ website at 
http://www.foodstandards.gov.au/th ecode/foodstandar dscode.cfm. 
  WT/TPR/M/178/Add.1 
 Page 113 
 
 
  Chinese Taipei:  
 Question: 
(Paragraphs 29 & 30)  
 Australia’s describes its quarantine system as being based on an objective, science-based assessment 
of the risks of pests and diseases consistent with in ternational obligations, including SPS Measures. 
In October 2006, Australia announced reforms to  its import risk analysis (IRA) process, which, 
among other things, will set the timeframes for the co mpletion of IRAs. The changes will take effect in 
2007.   
We wish to note, in this context, that our govern ment’s application first made in the year 2000 to 
export preserved eggs to Australia still remains  pending, despite the substantial amount of 
supplementary information provided in the meantime.  
 
Bearing in mind that we have for some years ex ported the said product to several other countries, 
including the US and Japan, and that no scientific evidence for refusal has been provided by 
Australia, we would be most grateful for an explanation of the procedures and processing time 
applied to our above-mentioned application. 
 
Answer: 
 
Australia is currently conducting a policy review for the importation of preserved eggs from Chinese 
Taipei.  This was announced in 2006.  The review w ill cover alkalised and salted/heat-treated (but not 
retorted) eggs of ducks and will consider the qua rantine risks and where appropriate, will recommend 
risk management measures.   
 It is expected that a draft report will be circulated  to stakeholders (both within Australia and overseas) 
in early 2007 for comment.  Biosecurity Australia will then consider and address all comments from 
stakeholders on the draft before the review is fi nalised and recommendations provided to the Director 
of Animal and Plant Quarantine to make a policy determination on import conditions.  EC:
 
 Question: (Paragraph 50) 
 
To enhance Biosecurity Australia’s independen ce it became a prescribed agency within the 
Department of Agriculture, Fisheries and Fo restry (DAFF) on 1 December 2004.  However,  
Biosecurity Australia is still located physically w ithin the DAFF and the Director of Quarantine, who 
is also the Secretary of DAFF, ultimately ma kes the policy determination. How can there be 
confidence that the Import Risk Analysis (IRA) process is truly independent from domestic 
agricultural interests?  
Answer: 
 
Biosecurity Australia has been establis hed as a prescribed agency under the Financial Management 
and Accountability Act 1997  and has in place the financial,  governance and support systems to 
provide Biosecurity Australia with a level of financial independence from the Department of 
Agriculture, Fisheries and Forestry.  As such, it ha s autonomy over its operations, including its work 
program.  Biosecurity Australia provides science based quarantine assessments and policy advice that 
protects Australia’s favourable pest and disease status  and enhances Australia’s access to international 
animal and plant related markets.  WT/TPR/M/178/Add.1 
Page 114  
 
  It is appropriate that Biosecurity Australia makes recommendations on biosecurity policy to the 
Director of Animal and Plant Quarantine, who has powers and obligations under the Quarantine Act 
1908 , and that it works closely with the Australian Quarantine and Inspection Service (AQIS) which 
is responsible for implementing quarantine policy at  the border and also has powers and obligations 
delegated by the Director of Quarantine under the Quarantine Act . 
 
Question: 
(Paragraph 53)  In October 2006 Australia announced improvemen ts to the IRA process including maximum 
timeframes for IRAs.  Whilst this is to be welcom ed there is still the flexib ility for timeframes to be 
suspended in certain circumstances, such as wh en Biosecurity Australia  is waiting for scientific 
information considered essential to complete the IRA. Could Australia provide clarification on what 
other circumstances, if any, the timeframes be suspended?   
Answer:  
It will be possible to suspend the overall maximum ti meframes only in strictly defined circumstances.  
This ‘stop the clock’ mechanism is necessary to suspend the timeframes for delays which are not 
attributable to Australia.  For example: where Bi osecurity Australia is waiting for information from a 
trading partner considered essential to complete an IRA, or where Biosecurity Australia is waiting for 
research considered essential to complete an IRA;  or where a significant national or international 
quarantine circumstance (such as an outbreak of foot and mouth disease) limits Biosecurity Australia’s ability to complete an IRA within the re gulated timeframe.  The details regarding the ‘stop 
the clock’ mechanism are clearly articulated in the regulations wh ich will be publicly available. 
 Question:  In this respect, could Australia also provide an a ssurance that it will not use the ability to stop the 
clock as a means to unjustifiably delay the determination of new import conditions? 
 
Answer: 
 
Australia does not accept any suggestion that the ‘stop the clock’ mechanism will be used to 
unjustifiably delay the IRA process.  The circumst ances in which this mechanism can be used are 
clearly defined in regulations which will be publicly  available.  The ‘stop the clock’ mechanism is 
necessary to suspend the timeframes for delays which ar e not attributable to Australia.  The use of the 
‘stop the clock’ mechanism will be transparent and accountable.   
 
Question: 
 
It is understood that there is a considerable backlog of outstanding market access requests (possibly 
150 or more) still to be reviewed.   
 
Could Australia elaborate on how it intends to re duce this excessive backlog? Does Australia intend 
to consult with exporting countries on their prioritie s for dealing with this backlog? And if the latter, 
how will exporting countries be consulted? 
 
Answer: 
 
In implementing the new IRA process, Australia will consider the status and priority of all access requests received.  In setting its IRA work program,  Australia must, like other countries, consider the 
requests received against available resources and e xpertise, drawing on advice provided by trading  WT/TPR/M/178/Add.1 
 Page 115 
 
 
  partners.  Australia will provide trading partners with  more certainty about the status of their requests 
by publishing the work program, includi ng the priority of access requests received. 
 
Question:  
The Import Risk Analysis Handbook is a key refe rence document on the Australian IRA process and 
despite significant changes to the process announced in  recent years it was last revised in 2003. In the 
light of Australia’s claims of enhanced tr ansparency, when will this document be updated?  
 Answer: 
 
The reforms to Australia’s IRA process are expected  to take effect in the first half of 2007 once 
regulations being made under the Quarantine Act 1908  come into force.  A revised IRA Handbook 
will be available at the commencement of the regulations. 
 
Question: 
(Paragraphs 55-58)  Australia introduced ‘conservative’ import regime for bovine spongiform encephalopathy (BSE) in 
2001, which prohibits import of beef and beef products from countries which have had a reported 
indigenous case of BSE.  In introducing this reg ime, Australia foreshadowed a review of this policy 
within 2 years following implementation, with the review commencing in August 2003.  To date this 
review has not been completed and there has been no indication when it will be completed.  Can 
Australia indicate when it intends to complete its review of its BSE import policy? In this context, will 
Australia's policy be made consistent with the new international recommendations adopted by the 
Office International des Epizoties (OIE) on trade in beef and blood products in May 2005? 
 
Answer: 
 
Australia has undertaken the review.  The review ’s recommendations were finalised in September 
2005 and are being considered by the Austra lian Government.  Until government processes are 
complete, no specific details can be pr ovided on the review’s recommendations. 
 
Question: 
 Australia published its draft Import Risk Assessment on chicken meat in June 2006. The EU submitted 
detailed comments on the document. Can Australi a indicate if and when a revised version will be 
made available?  
Answer: 
 
The comment period for the draft import risk analys is (IRA) for chicken meat closed on 29 September 
2006.  Twenty submissions were received.  Bio security Australia is currently giving careful 
consideration to the scientific and technical issues  raised by stakeholders, and any new science that 
may have become available, as it prepares the draf t final IRA report.  The draft final IRA report will 
then be reviewed by an independe nt Eminent Scientist Group to ensure that Biosecurity Australia has 
taken stakeholder comments properly into account.  The final report will then  be published and is 
open to appeal on limited grounds.  After the comp letion of any appeal processes, a final report and 
recommendations will be provided to the Director of Animal and Plant Quarantine, who will then 
make a policy determination on the import conditions for chicken meat.  
 WT/TPR/M/178/Add.1 
Page 116  
 
  Question: 
Australia publishes its import conditions on the ICON database. This is a useful tool but its value is 
often limited because its conditions are incomp lete or may have changed without notice. Can 
Australia undertake to maintain the database fu lly up to date and to inform known traders of 
important changes to import conditions? 
Answer: 
ICON import conditions are maintained upon advice provided by Biosecurity Australia and other 
departments in response to changes in risk leve ls and operational practices.   This is done on a 
continuous basis as advice is provided.  When si gnificant changes to import conditions are made, a 
Public Quarantine Alert is issued on the ICON website to notify all relevant parties.  
Listed in all import conditions is a notice informi ng users that it is their responsibility to check the 
current import conditions prior to importing. 
Question: 
Australia has made improvements to transparency in  the fruit and vegetable sector, in particular by 
publishing more information on existing standards in the ICON database. Nevertheless European 
traders frequently have difficulties even  when implementing agreed protoc ols. This is particularly the 
case for citrus fruit. Can Australia say what it will do to further improve transparency, particularly 
with respect to pesticides? 
Answer: 
ICON provides information on import requirements with respect to quarantine.  Information regarding 
food safety requirements can be found by accessing the Food Standards Code through the Food 
Standards Australia New Zealand (FSANZ ) website (http://www.foodstandards.gov.au/). 
In addition, AQIS publishes the testing regime a pplied to imported food on the AQIS website through 
Imported Food Notices (www.aqis.gov.au/foodimport).  C onsideration is currently being given to the 
inclusion of the food safety requirements in a future re-design of the ICON database. 
Question: 
Conditions for import of pig meat into Australia ha ve improved, but there is still a wide range of pork 
products which cannot be sent from the EU. Can Au stralia say if it is considering the possibility to 
reduce or eliminate some of the requirements  and increase the range of importable products? 
Answer: 
Australia completed a comprehensive import risk anal ysis (IRA) for pig meat in 2004.  The IRA was 
generic in that it covered all countries and comm odities and recommended risk  management measures 
to address diseases of concern.  These measures incl uded such things as country or zone freedom, 
processing by cooking or curing depending on th e disease.  Australia continues to review its 
quarantine measures as new scientific information comes to light. 
Question: 
Since 2006 Biosecurity Australia has conducted a review of import policy for dairy products for 
human consumption. Can Australia sa y which of the new Biosecurity measures related to raw milk 
will be implemented?  WT/TPR/M/178/Add.1 
 Page 117 
 
 
  Answer: 
 
Biosecurity Australia is currently undertaking a re view of import policy for dairy products for human 
consumption.  Information about the review ca n be found at: http://www.daffa.gov.au/ba/reviews/ 
current-animal/dairy-human. 
 
The existing conditions were estab lished in May 1999 following completion of a generic import risk 
analysis (IRA) (Animal Quarantine Policy Memoranda  1999/76 and 1999/86).  Biosecurity Australia 
considers that a review of the existing policy is  required in light of the trend towards global 
processing and marketing of dairy-based products.  This includes growing commercial interest in 
importing dairy products manufactured in FMD-inf ected countries using dairy ingredients sourced 
from FMD-free countries, together with advances in processing and further scientific information 
since the IRA was completed.  The policy review will consider dairy pro ducts intended for human 
consumption derived from bovine (ca ttle), ovine (sheep), caprine (goa ts) or buffalo milk or milk 
products from all countries.  While the review is be ing undertaken, dairy products including milk will 
continue to be imported under existing conditions. 
 
India:  
 Question:  
India exported mangoes to Australia until 1996, usin g mandatory on-shore ethylene dibromide (EDB) 
treatment for control of fruit flies.  Import of mango es from India ceased as a result of the withdrawal 
of EDB as a post-harvest disinfestations treatment in Australia.    May we request Australia to inform how to resume export of Indian mangoes to Australia? 
 
Answer: 
 
A policy review for the import of Indian mangoes to Australia is underway as notified in Plant 
Biosecurity Policy Memorandum (PBPM) 2004/21 (available at:  www.daffa.gov.au/ __data/assets/pdf_file/24842/2004_21.pdf).  Australia  is progressing the risk analysis as a high 
priority.  
 
Question: 
 May we request Australia to  inform of the steps taken to facilita te export of cut flowers from India to 
the country?  
Answer: 
 
India already has access to Australia for a number of flower/foliage species as outlined on the AQIS 
database ICON (available at: www.aqis.gov.au/icon32 /asp/homecontent.asp).  A species not currently 
permitted entry would require that Biosecurity Aust ralia conduct a risk assessment. Any request for a 
new species to be permitted entry can be  made to Biosecurity Australia.   
 
Question:  
We have been informed recently that Australia's Quarantine Authority - Biosecurity Australia-- has 
conducted an Import Risk Analysis for prawns and Prawn Products with draft recommendations for 
tightening import controls.  These draft reco mmendations amount to trade barriers. 
 WT/TPR/M/178/Add.1 
Page 118  
 
  We request Australia not to take su ch steps which hinders the exports of these products from India to 
Australia. 
 
Answer:  
 Biosecurity Australia issued a revised draft import risk analysis (IRA) report for prawns and prawn 
products for human consumption for public comment  on 23 November 2006. The draft report is a 
thorough and comprehensive review of current scienti fic information.  The draft report concludes that 
the current quarantine controls for existing prawn impor ts need to be strengthened in order to achieve 
Australia’s appropriate level of pr otection (ALOP).  This is consis tent with Australia’s rights under 
the SPS Agreement. Australia’s ALOP is expressed  as providing a high level of sanitary or 
phytosanitary protection aimed at reducing risk to a very low level, but not to zero.  Over 50 
submissions were received from stakeholders on the draft IRA report, including from India.  
Biosecurity Australia and the IRA team of aquatic  experts are now considering the submissions in 
order to prepare a final IRA report.     Japan:
 
 Question:  Australia bans beef import from countries that  have had past cases of BSE. When will Australia 
remove this ban?  
Answer: 
 
The Australian Government has undertaken a review  of BSE food safety policy.  Until government 
processes are complete, no specific details can be provided on the review’s recommendations.  
 
Pakistan:
 
 Question:  
Australia has limited imports of fruits and vegetables from most countries including Pakistan due to 
strict SPS rules and regulations.  This  restricts market access for Pakistan. 
 Pakistan sent draft agreement on cooperation betw een Pakistan and Australia, which is under 
consideration of Australian Departmen t of Agriculture. Could Australia let us know the procedures 
and time involved in entering into cooperation and accreditation agreements for various standards 
related issues? The delay caused in this pro cess may oust some of the small exporting countries 
against the big exporters. 
 
Answer: 
 
Australia adheres to a science-b ased, transparent quarantine assessm ent process aimed at managing 
the biosecurity risks of imports to a very low level,  in accordance with Australia’s appropriate level of 
protection (ALOP).  Quarantine conditions are devel oped that reflect the animal and plant health 
status of Australia and the exporting country, and ac cord with Australia’s international obligations.  
Australia’s import risk analysis process is current ly being reformed to improve its timeliness, 
transparency, and predictability.  The new process, which is expected  to commence in the next few 
months, will impose regulated time-frames and impr ove priority setting processes, transparency and 
consultation with stakeholders , including exporting countries.  WT/TPR/M/178/Add.1 
 Page 119 
 
 
  In responding to any market access requests, exporting countries are required to provide relevant pest 
and disease information to assist Australia in making a preliminary assessment about the technical process that might be required to determine mark et access conditions for the specific commodities.   
Australia is progressing Pakistan’s market access for mangoes in line with Australia’s import risk 
assessment procedures.  Pakistan has recently provid ed some technical information to assist with the 
risk analysis for this access request.  
 The Australian Government has been provided wi th an incomplete draft agreement on cooperation 
between Pakistan and Australia on sanitary and phyto sanitary matters.  The Government is pursuing 
this issue with relevant Pakistan authorities to seek clarification on the document and will respond 
accordingly.  
 
Singapore:
 
 Question: 
 
Is Australia considering a review of the quarantin e requirements for ornamental fish imported into 
Australia? The current requirement for up to 21 days of quarantine is onerous, especially given that 
this is on top of the 14 days pre-export quarantine p eriod and acts as an effective barrier to exports of 
such fish to Australia.  
 
Answer: 
 
The current import conditions for freshwater ornament al finfish were introduced in 1999 following a 
comprehensive science-based import risk analysis .  The measures, including the 7/14/21-day post-
arrival quarantine detention and 14-day pre-export quarantine detention regimen, were identified as 
those required to reduce the quarantine risks to a level that accords with Australia’s conservative 
approach to quarantine.  Biosecurity Australia is, however, currently conduc ting a review of iridovirus-associated risks from 
importation of freshwater ornamental  finfish.  This follows new information reported on iridovirus in 
gouramis and susceptibility of native Australian finfish to infection.   
 
As part of the review process, Biosecurity Austra lia will consult with stakeholders, including on a 
draft policy review document.  In the interim, st akeholders are welcome to submit to Biosecurity 
Australia any relevant technical or other information they believe may be appropriate to this review.  
Singapore is encouraged to contribute to this review. 
 
For further information refer to Animal Biosecu rity Policy Memoranda (ABPM) 205/01 of 11 March 
2005, available at www.daffa.gov.au/ba.     
Question: 
 
Under the current AQIS system, att estation requirements for the issuance of health certificates for the 
imports of fish, meat and dairy products differ fr om product to product. There is not a standardised 
format. Is Australia considering a review of the system, to accord greater transparency and 
predictability? 
 
Answer: 
 
AQIS routinely reviews import permit conditions.  This  will continue in consul tation with Biosecurity 
Australia to ensure a standardised format is used for attestation requirements for health certificates.  WT/TPR/M/178/Add.1 
Page 120  
 
  Comprehensive information on AQIS’s import conditions is available on its ICON database.  This is a 
simple and convenient way to access information a bout Australian import conditions for more than 
20,000 plant, animal, microbial, mineral and human co mmodities.  It can be used to determine if a 
commodity intended for import to Australia needs a qua rantine permit and/or treatment or if there are 
any other quarantine prerequisites.  The ICON da tabase can be found at:  www.aqis.gov.au/icon. 
South Africa:
 
Question: 
(Paragraph 48) 
“Australia has a strict sanitary and phytosanitary regi me. The authorities justify this by maintaining 
that Australia has unique and diverse flora and fau na, is a major exporter of agricultural products, 
and is relatively free from serious pests and diseases.   Under quarantine policy, commodities may not 
be imported unless the quarantine risks are reduced to a level consistent with Australia's appropriate 
level of protection (ALOP), which is described as "providing a high level of sanitary and 
phytosanitary protection aimed at reducing risk to a very low level, but not zero".6  However, if the 
SPS regime is unduly strict, it may constitute an  import restriction or prohibition.  Some WTO 
Members have raised concerns about the strictness of the Australian regime in the Committee on 
Sanitary and Phytosanitary Measures, covering, inter alia, cosmetics, fresh fruits and vegetables, live 
fish, prawn and prawn pro ducts, chicken meat, pigmeat, sauces, and cheese”.  
Question: South Africa notes the very strict SPS measures applied by Australia. South Africa is 
especially concerned about the long time it takes to conclude some p est risk analysis. Does Australia 
foresee any changes to the pest risk analysi s procedures to speed up the process?  
Answer: 
Australia has announced reforms to its import risk analysis (IRA) process to improve it timeliness, 
transparency, and predictability.  Timeliness w ill be improved by regulations imposing overall 
maximum timeframes for the completion of IRAs.  The regulations will provide for a standard or 
expanded IRA process, depending on the complexity of th e science and nature of the biosecurity risks.  
Standard IRAs will be completed within 24 mont hs and expanded IRAs w ithin 30 months.  The 
reforms will take effect in  the first half of 2007. 
Further information on the IRA reforms may be found at http://www.daffa. gov.au/about/publications/ 
import-risk-analysis-review. 
 
Thailand:  
 Question: (Paragraph 3) 
 
Please clarify in detail the steps mentioned in th e Secretariat Report that Australia has taken to 
improve its import risk analyses in order to make the process more transparent, efficient and timely.  
If possible, please describe other steps Austra lia plans to take to fu rther improve the process.  
 
Answer: 
 
The detail regarding the import risk analysis (IRA) reforms is clearly articulated in the regulations 
which will be publicly available.  In addition, ge neral information on the IRA reforms may be found 
at:  http://www.daff.gov.au/ira-review. 
                                                     
 
 6 DAFF (2003).  WT/TPR/M/178/Add.1 
 Page 121 
 
 
  The regulations are expected to co mmence in the first half of 2007.  At the time of commencement a 
revised IRA Handbook will also be published. 
 
Question:  
Import Risk Analyses on Thai products 
 Could Australia please provide the latest progress of the pest risk analyses on chicken meat and other 
poultries, citrus (pomelo-pilled), pine apple (pille d) and mango conducted by the Australian Quarantine 
Inspection Service (AQIS)? 
 
Answer: 
 
The comment period for the draft import risk analys is (IRA) for chicken meat closed on 29 September 
2006.  Biosecurity Australia is currently giving car eful consideration to the scientific and technical 
issues raised by stakeholders, and any new science th at may have become available, as it prepares the 
draft final IRA report.  It is expected assessments of other poultry meat will follow the completion of 
the chicken meat analysis.  For horticulture produc ts, Biosecurity Australia is discussing details of 
these access requests and priorities with the Thai Department of Agriculture. 
 
Question: 
 Measures on the importation of  prawns and prawn products 
 
Australia’s Revised Draft Generic Import Risk A nalysis (IRA) Report for Pr awns and Prawn Products 
has been circulated to all interested parties for comments since November 2006.  Thailand is of the 
view that the newly proposed quarantine and contro l measures on the importation of Prawns and 
Prawn Products into Australia under the above Revi sed Draft Report will create unnecessary burdens 
on foreign trade.  We hope that the Australian Gove rnment will carefully review the newly proposed 
IRA measures to avoid the creation of such burdens.   
Answer:  
 
Biosecurity Australia issued a revised draft IR A report for prawns and prawn products for human 
consumption for public comment on 23 Novemb er 2006.  The draft report is a thorough and 
comprehensive review of current scientific informat ion.  The draft report c oncludes that the current 
quarantine controls for existing prawn imports need to  be strengthened in order to achieve Australia’s 
appropriate level of protection (A LOP).  This is consistent with  Australia’s rights under the SPS 
Agreement. Australia’s ALOP is expressed as provi ding a high level of sanitary or phytosanitary 
protection aimed at reducing risk to a very low le vel, but not to zero.  Over 50 submissions were 
received from stakeholders on the draft IRA report, including from Thailand.  Biosecurity Australia 
and the IRA team of aquatic experts are now consid ering the submissions in order to prepare a final 
IRA report.     
Turkey:
 
 
Question:  As underlined by the Secretariat Report, sanitary and phytosanitary regime of Australia is a strict one 
especially with stringent rules under quarantine poli cy. In that regard, we have taken note of the 
official position maintained by the authorities that  decisions on imports and measures applied are 
science-based and not more trade restrictive than required .  
 WT/TPR/M/178/Add.1 
Page 122  
 
  However, on the ground  that if unduly strict, me asures introduced for s anitary and phytosanitary 
purposes may become an import restriction or even pr ohibition, and that consumer welfare might be 
reduced through higher prices, we would like to learn how does Australia strike a right balance between her legitimate  SPS related concerns and th e trade restrictive dimensions of those measures?  
 
Answer: 
 
Australia has a science-based quarantine system consistent with its obligations under the SPS 
Agreement.  Under the SPS Agreement, Australia h as the right to set its own appropriate level of 
protection (ALOP) and to take SPS measures in or der to achieve this ALOP.  Australia’s ALOP, 
which reflects community expectations through g overnment policy, is expressed as providing a high 
level of sanitary or phytosanitary protection aimed at re ducing risk to a very low level, but not to zero.   
 
US:
 
 
Question: 
 Paragraphs 48-49 on pages 46-47 of the Secretaria t report note that WTO Members have raised 
concerns about strictness of Australia’s san itary and phytosanitary regime and unduly stringent 
quarantine restrictions protect domestic products from competition, but reduce consumer welfare 
through high prices.  Australia’s regime has r esulted in an effective import ban on many U.S. 
agricultural products and restricts access for many through strict import measures.   
 Paragraph 53 on page 48 of the Secretariat re port notes “early 2007” as the start of the 
implementation of changes in Australia’s import ri sk analysis (IRA) process that were announced in 
October 2006. 
 
In the revisions to its IRAs, what changes will Au stralia make to improve the predictability and 
transparency of its IRAs?   Answer:  
Material on the upcoming IRA reforms may be  found at: http://www.daff.gov.au/ira-review. 
 
Question:  Can Australia provide a current status report of such implementation? 
 
What is the timeline envisioned for the ne w IRA process to become fully operational? 
 Answer: 
 
Australia is currently finalising th e regulations being made under the Quarantine Act 1908 .  The 
regulations are expected to commence in the firs t half of 2007.  At the time of commencement a 
revised IRA Handbook will also be published. 
 
Question:  
Paragraph 55 on pages 48-49 of the Secretariat report states:  “All food imports must comply with 
the Australia–New Zealand Food Standards Code, wh ich was developed by Food Standards Australia 
New Zealand (FSANZ)…”    WT/TPR/M/178/Add.1 
 Page 123 
 
 
  To what standards must Australian food produ cers adhere?  To what standards must New Zealand 
food producers adhere?  Answer: 
 All food sold, or prepared for sale in Australia must meet the requirements of the Australia New 
Zealand Food Standards Code  (the Code). 
 With a few exemptions, Australian and New Zealand food standards are harmonised as a result of the 
Agreement between the Government of Australia and the Government of New Zealand Concerning a 
Joint Food Standards System ( the Treaty).  In accordance with the Treaty, standards relating to food 
safety, maximum residue limits and primary production and processing, are not applicable in the New Zealand context, however, all food sold or prepared  for sale in New Zealand, must meet all other 
requirements of the Code. 
 
Question: 
 What are the differences between FSANZ standards  and Australia’s national standards?  Must 
exporters to Australia comply with food standards set by the Australian government in addition to 
those set by FSANZ?  
 
Answer: 
 
Food Standards Australia New Zealand is a bi-nati onal independent statutory authority established by 
the Food Standards Australia New Zealand Act 1991 .  New Zealand joined the system by way of a 
Treaty between the two countries.  With a few exem ptions, Australia and New Zealand food standards 
are harmonised as a result of the Treaty.  Food Standards Australia New Zealand is also a 
Commonwealth authority within the meaning of the Commonwealth Authority and Companies Act 
1997  (CTH).  Therefore, Food Standards Australia New Zealand has responsibilities and a role within 
the Australian Government, and the standards it sets are Australia’s national food standards.  
 The food standards to which importers are subject is the Australia New Zealand Food Standards Code 
(The Code).  The Code is developed by  Food Standards Australia New Zealand.  
 
Question: 
 How would Australia describe the role of FSANZ in  supporting Australia’s efforts to meet its WTO 
obligations?  What are the implications and eff ects of FSANZ standards-making on third-country 
trade prospects?  Answer: 
 
FSANZ uses an internationally agreed risk analysis  approach to inform its  regulatory decision-making 
processes.  This is embodied in the FSANZ Act , which requires FSANZ, when developing or varying 
standards, to have regard to the need for standards to be based on risk analysis using the best available 
scientific evidence.  In the context of food safety, risk analysis ensures the risks within a food sector 
are identified, managed and communicated.  This  approach incorporates the tripartite process 
endorsed by the Codex Alimentarius Commission (C odex ) of risk assessment, risk management and 
risk communication (CAC, 2005 ).  
 FSANZ prepares draft notifications of any proposed standards which we consid er may have an impact 
on third party trade, for possible submission by the relevant agencies in both Australia and New 
Zealand.  It works with the SPS and TBT contact points in Australia and New Zealand to develop a WT/TPR/M/178/Add.1 
Page 124  
 
  joint approach, regarding which Agreement is notified, and common wording.  The contact points 
then independently forward the notifications to th e WTO, if they decide that a notification is 
warranted.  FSANZ uses a cautious approach whereby if we are in any doubt about a possible impact 
on trade, we prefer that any proposed standards are notified.  
FSANZ adheres to the recommended notification pr ocedures of the WTO.  FSANZ also promptly 
responds to any requests for assistance or relevant documents.  It takes into account any comments 
made by WTO members as part of its decision-making processes.  
Question: 
 
According to paragraph 55 on pa ges 48-49 of the Secretariat report, imported foods using 
biotechnology can be offered for sale and consump tion in Australia only after being assessed and 
approved by FSANZ and being listed in the Food St andards Code.  According to the paper, FSANZ 
has completed safety assessments of 30 food products using ge ne technology.   
 
What is the process by which third-country tradi ng partners may seek product approval?  In what 
publication is there a description?  Answer: 
 An application may be made by anyone to amend the Australia New Zealand Food Standards Code  
(the Code), including individuals, organisations or companies, whether from Australia, New Zealand 
or any other country.  The process for amending the Code is prescribed in the Food Standards 
Australia New Zealand Act 1991  (the Act).  Open and transparent consultation with interested parties 
is a key element in the process involved in amendi ng or varying the Code and there are usually two 
opportunities for interested parties to comment on proposed changes to the Code during the 
assessment process.    
Question: 
 What guidelines or other criteria form th e basis for FSANZ’s safety assessments? 
 
Answer: 
 
FSANZ assesses the safety of GM foods in acco rdance with internationally accepted risk and 
evidence-based principles developed by the Codex Ad Hoc  Inter-Governmental Task Force on Foods 
Derived from Biotechnology, the OECD Task Force for the Safety of Novel F oods and Feeds, and the 
Joint FAO/WHO Expert Consultations on Foods Derived from Biotechnology.   
 To assist in the consistent application of these principles, FSANZ developed the Guidelines for the 
Safety Assessment of Genetically Modified Foods  (updated November 2005)
7, which rely heavily on 
the work of these groups, as well as previous OECD  and FAO/WHO consultations on GM foods.  The 
FSANZ Guidelines are broadly consistent with the Ge neral Principles for the Risk Analysis of Foods 
Derived From Biotechnology developed by the Codex Ad Hoc  Inter-Governmental Task Force on 
Foods Derived from Biotechnology.  FSANZ’s safety assessment of a GM food is conducted as part of an overall risk analysis and is 
designed to identify whether a hazard, nutritional or  other health and safety concern is present in a 
                                                     
 
 7 Available at http://www.foodstandards.gov.au/_srcfiles/GM%20Guidelines%20Nov%2005.doc 
(accessed 23 February 2007).  WT/TPR/M/178/Add.1 
 Page 125 
 
 
  GM food (hazard identification), and if present, to  gather information on its nature and severity 
(hazard characterisation).  The safety assessment process used by FSANZ is applied to the food derived from a GM organism, and is not applied directly to the organism itself, exce pt in so far that the organism is itself the food.  
The safety assessment is characterised by:   
 
- pre-market, case-by-case consideration of GM foods; - consideration of the intended and unintende d effects of the genetic modification; and 
- comparisons with conventionally produced  foods having an acceptable standard of 
safety. 
 The goal of the safety assessment is not to establish the absolute safety of the GM food but rather to 
consider whether the GM food is as safe as its  traditional counterpart, hence the comparative 
approach.  If this is demonstrated then it confirms  that the GM food has all the benefits and risks 
normally associated with food. 
 
Question:  Paragraph 56 on page 49 of the Secretariat report stat es that the Food Standards Code also regulates 
food derived from GM plants, animals or micro or ganisms, as well as the l abelling of GM foods.  We 
understand that the joint Australia-New Zealand regulatory regime for food includes mandatory 
labelling requirements for certain foods produced us ing biotechnology.  We further understand that 
biotechnology labelling is required if more than 1 percent of a food in its final form contains detectable DNA or protein resulting from the applic ation of biotechnology, with a few exceptions.  
 
For such mandatory process-based labelling regula tions that do not provide relevant safety 
information, a 1 percent threshold can be bur densome for manufacturers, packers, exporters, 
importers, and retailers.  Has Australia considered the effects of such regulations on both import 
opportunities as well as Australia's future use of th e technology in agriculture production?  If yes, 
what is Australia doin g to address this issue? 
 
Answer:  
The Australian GM labelling requirements, which ar e comprehensive and enforceable by the State, 
Territory and New Zealand jurisdictions, came in to effect in December 2001, when Australia and 
New Zealand were among the first countries to require mandatory labelling of GM food.   
 
The Standard prescribes mandatory labelling where: novel DNA and/or protein are present in the final 
food, whether packaged or unpackaged; or the fina l food has altered characteristics.  There are a 
number of exemptions to this requirement.  To assi st manufacturers and retailers interpret and apply 
Standard 1.5.2 – Foods Produced Using Gene Tec hnology, FSANZ has developed a User Guide for 
Labelling of Genetically Modified Food
8. 
 
During the development of Standard 1.5.2 – Foods  Produced Using Gene Technology, which included 
the development of labelling requirements, this matt er was notified to the WTO.  The final GM food 
labelling regulation represented a fair balance betwee n what consumers wanted, what industry could 
provide without unnecessary disruptions to trade, and what governments could realistically enforce. 
 
                                                      
 8 Available at:  http://www.foodstandards.gov.au /thecode/assistanceforindustry/userguides/labelling 
geneticallymodifiedfood userguide/index.cfm (acce ssed 26 February 2007). WT/TPR/M/178/Add.1 
Page 126  
 
  The GM labelling requirements of the Code were reviewed by FSANZ in 2 004, as requested by the 
Australia New Zealand Food Regulation Minister ial Council.  At this time it was found that 
consumers support mandatory labelling of GM food so that they can make informed purchasing 
decisions, and that there is a high level of indust ry compliance with the labelling requirements.   
 
Question: 
 Can Australia explain how the current existence of  state-level restrictions and moratoria complies 
with Australia’s national biotech regulatory system?  
 
Answer: 
 
Dealings with live and viable GMOs are regulated through the Gene Technology Act 2000  (the GT 
Act).  The object of the GT Act is “to protect th e health and safety of people, and to protect the 
environment, by identifying risks posed by or as a result of gene technology, and by managing those 
risks through regulating certain dealings with GMOs.” 
 The GT Act forms the central component of the na tional regulatory system.  It is supported by the 
Gene Technology Regulations 2001 and an inter-governmental agreem ent that requires each State and 
Territory to enact corresponding legislation.  A Gene Technology Ministerial Council with 
representatives from the Commonwealth and every St ate and Territory oversees the implementation 
of the regulatory system. 
 As provided for by the Act (subsection 21), the Ge ne Technology Ministerial Council issued Policy 
Principle in 2003 recognising areas, if any, designated under State law for the purpose of preserving the identity of GM crops and non GM crops (or both) for marketing purposes.  A number of States 
and Territories have taken actions fo r marketing reasons, consistent with  this policy principle.  These 
actions relate to cultivation of GMOs in  the environment, not to food use. 
 
US:
 
 Question: 
 
We appreciate the explanation in regard to ame nding the Food Standards Code to accommodate 
third-country partners seeking products approval for f oods using biotechnology on p. 43 of your 
written answers, but we had the understanding that step s would first need to be taken for assessment 
and approval by FSANZ of importe d foods using biotechnology.  
What is the process by which third-country tr ading partners may seek FSANZ product assessment, 
and is information on these procedur al steps publicly available? 
 Answer: 
 
Standards within the Code apply to both importe d and domestically produced foods, irrespective of 
whether the commodity has been produced using biot echnology.  Third country trading partners may 
seek approval for a food produced using biotechnolo gy in the same way as any other applicant 
seeking to make an amendment to the Code.  FSANZ's safety assessments do not discriminate between imported and domestically produced commodities.  
Information for prospective applicants seeking to amend Standard 1.5.2 - Fo od produced using Gene 
Technology is provided on the FSANZ website at:  http://www.foodstandards.gov.au/standards 
development/informationforapplicants/index.cfm.  Alternatively, the FSANZ  Standards Management 
Officer can be contacted for assistance at slo@foodstandards.gov.au.    WT/TPR/M/178/Add.1 
 Page 127 
 
 
  Applications relating to GM foods seek approval fo r commodities (e.g. corn, lucerne, potatoes) with 
specific gene modifications, such as:  
- food derived from glufosinate ammonium-tolerant corn line T25; or - food derived from insect-protected Bt-176 corn. 
 
The food products produced using approved commoditi es, including as ingredients, such as biscuits 
and breakfast cereals, are not individually asse ssed.  However, a food produced using gene 
technology, other than a substance regulated as a f ood additive or processing aid, must not be sold or 
used as an ingredient or component of any food unl ess it is listed in Column 1 of the Table to clause 1 
of Standard 1.5.2 and complies with the c onditions, if any, specified in Column 2. 
 Once a commodity is approved, anyone is able to produce food with the approved GM commodity for sale in Australia, whether the food is made in Au stralia or imported into Australia for domestic 
consumption.  Government procurement
 
 
Argentina:  
 Question: 
(Paragraph 64) 
 What are the specific rules referred  to in this paragraph?  Could Au stralia provide statistics on the 
different procurement methods accord ing to the origin of the suppliers and the value of the contracts? 
 
Answer:  
Full details of the Mandatory Procurement Proce dures that apply to procurement by Australian 
Government entities can be found in Division 2 of the Commonwealth Procurement Guidelines 
available at:  http://www.finance.gov.au/p rocurement/procurement_guidelines.html . 
 
The Australian Government does not require depart ments and agencies to report when products are 
foreign sourced.  This recognizes the non-discrimin atory nature of the Australian Government’s 
procurement framework, in which the property or servi ces on offer must be considered on the basis of 
their suitability for their intended purpose, and not the basis of their origin.  It also recognizes the 
complexity and substantial administrative burden that would ensue from attempting to collect such 
information.  However, it is possible, through th e www.contracts.gov.au website for any enquirer to 
identify relevant suppliers for individual reported contracts.  The details of contract awards by 
departments and agencies are available from the Australian Government’s AusTender website at 
www.contracts.gov.au.  
Australian Government Co ntracts Reported, 2005-06 
Procurement code Sum of value 
($A million) Count of contract ID 
OS (open source) 10,182 27816 
OT (other) 1,571 4377 
RS (restricted source) 2,905 18238 
SS (sole source) 14,730 36701 
 29,389 87132 
 WT/TPR/M/178/Add.1 
Page 128  
 
  For ease of reference: 
Open source = Open tendering Restricted source = Select tendering Sole source = Direct sourcing  
Please note: procurements tabled under the code ‘oth er’ are currently being reviewed by agencies for 
reporting accuracy.  More detailed statistics are available from the relevant Australian G overnment website [at 
http://www.finance.gov.au/procurement/contract_statistics.html]. 
 
Canada:
 
 Question: (Paragraph 62) 
 
Australia has implemented a high standard governme nt procurement chapter in its free trade 
agreement with the United States that includes proce dural requirements that are of a similar standard 
to the revised WTO Agreement on Government Proc urement (GPA) text that has recently been 
negotiated (GPA/W/297, December 11, 2006).  Given its existing obligations under the U.S.-Australia 
Free Trade Agreement and the development of a ne w GPA text, has Australia considered moving 
forward with its accession to the GPA?  
 
Answer: 
 
Australia has no intention at present of acceding to  the WTO Agreement on Government Procurement 
(GPA). 
 The GPA has become clearer and has several areas of  similarity with the Government Procurement 
Chapter of the Australia-United St ates Free Trade Agreement.  However, there still remain a number 
of areas of concern.  
Australia supports the liberalization of government pr ocurement markets.  In its bilateral Free Trade 
Agreement (FTA) negotiations, Australia seeks provi sions on Government Procurement that achieve 
market liberalization in a manner consistent with efficient and effective commercial procurement processes.    
The Australian Government has an effective r esource management framework which is strongly 
focused on performance, efficiency and accountabilit y.  An integral component of the resource 
management framework is the Australian Govern ment’s procurement framework which is built 
around the core principle of achieving value for money through competition, non-discrimination and 
efficient, effective and transparent processes.  Reduc ing red tape in public administration is a current 
priority of the Australian Government. 
 
Australia considers that the GPA, with its str ong pro-regulation approach to procurement, would 
unduly impair the efficiency, effectiveness and tran sparency of procurement processes, leading to 
reduced productivity and unnecessary higher costs fo r both government and industry.  Australia 
questions the need for the level of prescription of procurement processes reflected in the GPA. 
 
While there are many areas of similarity be tween the GPA (as revised) and the government 
procurement chapter of the Australia-United States Free Trade Agreement, there are also significant 
differences where the GPA is more burdensome and in flexible in respect of procurement processes.   WT/TPR/M/178/Add.1 
 Page 129 
 
 
  Particular areas of concern are the limitations on selective tendering, minimum time periods and 
provisions for supplier review.   Australia notes that in these and a number of other areas, the GPA requirements are a substantial departure from commercial best practice and therefore represent a potential barrier for firms (domestic 
and foreign) wishing to enter the government procurement market. 
 A current priority of the Australian Government is  reducing red tape in public administration.  
Regulation and administrative costs, such as tho se required by the GPA, can constitute significant 
barriers to trade including in the government procurement market.   
 
Australia continues to monitor developments in th e GPA with a view to reassessing its position should 
developments address its concerns as outlined above.  
China
: 
 
Question: (Paragraph 61)   It is mentioned in the Secretariat Report that Australia still has industry development initiatives for 
procurement arrangements for motor vehicles.  
 
Could Australia please indicate how these indus try development initiatives are implemented in 
procurement process?  Answer: 
 
Australian Government agencies when purchasing vehicl es as part of their vehicle fleet or under the 
Executive Vehicle Scheme  are required to select vehicles from manufacturers registered as a motor 
vehicle or component producer in the Automotiv e Competitiveness and Investment Scheme that are 
either:  made in Australia;  or have an engine capacity of 2000 cc or less. 
 
The Australian Government has no plans to alter this policy.  
 
Question: 
(Paragraph 62)   
The Secretariat Report indicated that Australia has no  intention to become a party to the Government 
Procurement Agreement.  Could Australia indicate its considerations behind this position?  Answer: 
 
Australia has no intention at present of acceding to  the WTO Agreement on Government Procurement 
(GPA).  The GPA has become clearer and has several areas of  similarity with the Government Procurement 
Chapter of the Australia-United St ates Free Trade Agreement.  However, there still remain a number 
of areas of concern. WT/TPR/M/178/Add.1 
Page 130  
 
   
Australia supports the liberalization of government pr ocurement markets.  In its bilateral Free Trade 
Agreement (FTA) negotiations, Australia seeks provi sions on Government Procurement that achieve 
market liberalization in a manner consistent with efficient and effective commercial procurement processes.   
 
The Australian Government has an effective r esource management framework which is strongly 
focused on performance, efficiency and accountabilit y.  An integral component of the resource 
management framework is the Australian Govern ment’s procurement framework which is built 
around the core principle of achieving value for money through competition, non-discrimination and 
efficient, effective and transparent processes.  Reduc ing red tape in public administration is a current 
priority of the Australian Government.  Australia considers that the GPA, with its str ong pro-regulation approach to procurement, would 
unduly impair the efficiency, effectiveness and tran sparency of procurement processes, leading to 
reduced productivity and unnecessary higher costs fo r both government and industry.  Australia 
questions the need for the level of prescription of procurement processes reflected in the GPA. 
 While there are many areas of similarity be tween the GPA (as revised) and the government 
procurement chapter of the Australia-United States Free Trade Agreement, there are also significant 
differences where the GPA is more burdensome and in flexible in respect of procurement processes.  
Particular areas of concern are the limitations on selective tendering, minimum time periods and 
provisions for supplier review.   Australia notes that in these and a number of other areas, the GPA requirements are a substantial departure from commercial best practice and therefore represent a potential barrier for firms (domestic 
and foreign) wishing to enter the government procurement market. 
 A current priority of the Australian Government is  reducing red tape in public administration.  
Regulation and administrative costs, such as tho se required by the GPA, can constitute significant 
barriers to trade including in the government procurement market.    
Australia continues to monitor developments in th e GPA with a view to reassessing its position should 
developments address its concerns as outlined above. 
 
Question: (Paragraph 66) 
 
According to para.66 of the Secretariat Report, the Australian Government has a target of sourcing at 
least 10% of purchases by value from small and medium-sized enterprises.  
Could Australia elaborate on its policies and procedu res in this regard? How is this implemented in 
practice?  
Answer:  
The Australian Government procurement policy fr amework is non-discriminatory.  All potential 
suppliers are to have the same opportunities to comp ete for Government business and must, subject to 
these Commonwealth Procurement Guidelines, be trea ted equitably based on their legal, commercial, 
technical, and financial abilities, and not on their de gree of foreign affiliation or ownership, location 
or size.  The property or services on offer must be considered on the basis of their suitability for their 
intended purpose, and not on the basis of their origin.   WT/TPR/M/178/Add.1 
 Page 131 
 
 
  To ensure that Small and Medium Enterprises (SME s) are able to engage in fair competition for 
Government business, officials undertaking procurem ent should ensure that procurement methods do 
not unfairly discriminate against SMEs.  Agencies should seek to ensure that procuremen t processes are readily communicated and accessible 
to SMEs and should not take action to deliberately exclude SMEs from participating in a procurement 
process.  The Government’s commitment to FMA agencies sour cing at least 10 per cent of their purchases by 
value from SMEs does not affect the conduct of any specific procurement processes.  The 10 per cent 
target does not involve any form of preference a rrangement or positive discrimination towards local 
suppliers.  In practice the 10 per cent target is exceed ed by agencies, with SMEs attracting over 25 per 
cent of the value of Australian G overnment purchases during 2005-06.  
 
Question: 
(Paragraph 67) 
 The Secretariat Report said in pa ra.67 that the industry developmen t requirement was removed from 
the Endorsed Supplier Arrangement (ESA) as from 1 January 2005.   What specifically were the industry development re quirements in the ESA? And how had they been 
implemented? 
 Answer: 
 
On 29 November 2006, the Australian Govern ment announced the cessation of the ESA. 
 
This decision was part of an Australian Gove rnment initiative to reduce red tape in public 
administration.  A review had found that the benefits of the scheme in assisting procurement 
processes were outweighed by the co sts to suppliers and government. 
 The ESA has now been replaced with a simple r, optional, Information and Communication 
Technology Multi-Use List (ICT MUL) created in accordance with the Co mmonwealth Procurement 
Guideline provisions on multi-use lists:  Use of the ICT MUL is not mandatory for Au stralian Government agencies when purchasing 
Information and Communications Technology products and services.  
  
While the ESA included a requirement that was expressed as industry development, it essentially 
addressed a supplier’s capacity to support thei r products (that is, not pure resellers). 
 
EC:
 
 
Question: 
(Paragraph 61)  Is Australia eventually considering putting its i ndustry initiative for the procurement arrangements 
for motor vehicles to rest? 
 
Answer: 
 
Australian Government agencies when purchasing vehicl es as part of their vehicle fleet or under the 
Executive Vehicle Scheme  are required to select vehicles from manufacturers registered as a motor WT/TPR/M/178/Add.1 
Page 132  
 
  vehicle or component producer in the Automotiv e Competitiveness and Investment Scheme that are 
either:  made in Australia;  or have an engine capacity of 2000 cc or less. 
 The Australian Government has no plans to alter this policy.   Question:  Could Australia explain what kind of accreditation or  validation is required as part of the conditions 
for participation in open tendering?  
Answer:  
The Australian Government’s procurement framewo rk defines minimum conditions that potential 
suppliers must meet in order to participate in  a procurement process or for submissions to be 
considered.  This may include a requirement to undertake an accreditation or validation procedure. 
 
Conditions for participation, and any requireme nts to undertake an accreditation or validation 
procedure, must not arbitrarily limit competition by introducing factors that discriminate against a supplier or group of suppliers th at would otherwise be competitive and capable in the related 
procurement process(es).   
Conditions requiring accreditation or validation might include, for example, ﬁnancial viability or 
technical capacities.    Rules governing the scope of allowable conditi ons for participation, under the Australian 
Government’s procurement framework, are closely aligned to those in the revised Agreement on 
Government Procurement.  These are outlined below: 
 
- Agencies may specify conditions for particip ation in the request document which are 
basic requirements with which potential s uppliers must be able to demonstrate 
compliance in order to participate in a procurement or, if applicable, class of procurement.  
- Conditions for participation mu st be limited to those that will ensure that a potential 
supplier has the legal, commercial, tec hnical and financial abilities to fulfil the 
requirements of the procurement. 
- Conditions for participation may require re levant prior experience where essential to 
meet the requirements of the procurement but must not specify, as a requirement, that 
potential suppliers have previous experien ce with the agency, with the Australian 
Government or in a particular location.  
- In assessing whether a potential supplier satisfies the conditions for participation, an 
agency must: 
− evaluate financial, commercial, and technical abilities on the basis of the 
potential supplier’s business activities, wh erever they have occurred;  and 
− base its determination solely on the c onditions for participation that the 
agency has specified in either the approach to the market or the tender 
documentation. 
 Specific conditions for particip ation apply to the procurement of construction services.  
 
Any party wishing to tender for work on Australia n Government funded construction projects will be 
required to comply with domestic workplace relations  policies set out in the Australian Government’s 
National Code of Practice for the Constructio n Industry (the Code) and the Implementation 
Guidelines on all their construction projects.  WT/TPR/M/178/Add.1 
 Page 133 
 
 
  Full details of these eligibility requirements unde r the Code and Guidelines are available at 
http://www.workplace.gov.au/building.  In addition, the Building and Construction Industry Improvement Act 2005  provides for the 
establishment of an Occupational Health and Sa fety (OHS) Accreditation Scheme to apply to 
construction work funded by the Australian Government. 
 Only those construction companies that are accredited under the Scheme are able to contract with the 
Australian Government for directly funded cons truction contracts over the specified threshold. 
 
Full details of accreditation requirements ar e available at http://www.fsc.gov.au/ofsc/ 
theaccreditationscheme/  
Question: 
(Paragraph 62) 
 
Australia has observer status in the WTO Co mmittee on Government Procurement, but has no 
intention of becoming a party to the GPA.  The authorities consider that accession to the agreement 
would impose unnecessary costs and delays on procurement operations.   For legal certainty it would be desirable that Australia ratified the GPA.  
 
Is the Government thinking of becoming a party to the GPA? 
 
Answer: 
 The GPA has become clearer and has several areas of  similarity with the Government Procurement 
Chapter of the Australia-United St ates Free Trade Agreement.  However, there still remain a number 
of areas of concern.  Australia supports the liberalization of government pr ocurement markets.  In its bilateral Free Trade 
Agreement (FTA) negotiations, Australia seeks provi sions on Government Procurement that achieve 
market liberalization in a manner consistent with efficient and effective commercial procurement 
processes.    The Australian Government has an effective r esource management framework which is strongly 
focused on performance, efficiency and accountabilit y.  An integral component of the resource 
management framework is the Australian Govern ment’s procurement framework which is built 
around the core principle of achieving value for money through competition, non-discrimination and 
efficient, effective and transparent processes.  Reduc ing red tape in public administration is a current 
priority of the Australian Government.  Australia considers that the GPA, with its str ong pro-regulation approach to procurement, would 
unduly impair the efficiency, effectiveness and tran sparency of procurement processes, leading to 
reduced productivity and unnecessary higher costs fo r both government and industry.  Australia 
questions the need for the level of prescription of procurement processes reflected in the GPA. 
 While there are many areas of similarity be tween the GPA (as revised) and the government 
procurement chapter of the Australia-United States Free Trade Agreement, there are also significant 
differences where the GPA is more burdensome and in flexible in respect of procurement processes.  
Particular areas of concern are the limitations on selective tendering, minimum time periods and 
provisions for supplier review   WT/TPR/M/178/Add.1 
Page 134  
 
  Australia notes that in these and a number of other areas, the GPA requirements are a substantial 
departure from commercial best practice and therefore represent a potential barrier for firms (domestic and foreign) wishing to enter the government procurement market.  A current priority of the Australian Government is  reducing red tape in public administration.  
Regulation and administrative costs, such as tho se required by the GPA, can constitute significant 
barriers to trade including in the government procurement market.    Australia continues to monitor developments in th e GPA with a view to reassessing its position should 
developments address its concerns as outlined above.  Question: (Paragraph 63)  Could Australia provide for the year 2004/2005 statistic al breakdown of contracts according to origin 
of suppliers (local, foreign) and to goods, supplies, and works? 
 Answer: 
 
No.  The Australian Government does not require departments and agencies to report when products 
are foreign sourced.  This recognizes the non-discriminatory nature of the Australian Government’s 
procurement framework, in which the property or servi ces on offer must be considered on the basis of 
their suitability for their intended purpose, and not the basis of their origin.  It also recognizes the complexity and substan tial administrative burden that would ensue from 
attempting to collect such information.  Howeve r, it is possible, through the www.contracts.gov.au 
website for any enquirer to identify relevant suppliers for individual reported contracts. 
 The details of contract awards by department s and agencies is available from the Australian 
Government’s AusTender webs ite at www.contracts.gov.au. 
 
Question: 
(Paragraph 65) 
 Could Australia provide the breakdown of cont racts according to procurement methods (open 
tendering, select tendering and direct sourcing)?   
 
Answer: 
 
Australian Government Co ntracts Reported, 2005-06 
Procurement code Sum of  value 
($A million) Count of contract ID 
OS (open source) 10,182 27816 
OT (other) 1,571 4377 
RS (restricted source) 2,905 18238 
SS (sole source) 14,730 36701 
 29,389 87132 
 
For ease of reference: Open source = Open tendering Restricted source = Select tendering 
Sole source = Direct sourcing  WT/TPR/M/178/Add.1 
 Page 135 
 
 
  Please note: procurements tabled under the code ‘oth er’ are currently being reviewed by agencies for 
reporting accuracy.  More detailed statistics are available from the relevant Australian G overnment website [at 
www.finance.gov.au/procurement/contract_statistics.html]. 
 
India:
 
 Question:  
We have been informed that Indian IT companies are not allowed to have access to the Government 
contracts on par with Australian companies.   We request Australia to allow the Indian IT co mpanies access to Government contracts on par with 
Australian companies.  
 
Answer: 
 
The information India has received is incorrect.  The Australian Government’s procurement policy 
framework is non-discriminatory and does not differe ntiate between domestic and foreign suppliers.  
The framework currently extends the measures required for implementation of the Singapore-
Australia Free Trade Agreement and the Australia-U nited States Free Trade Agreement to all foreign 
suppliers and products, including in relation to Au stralian Government IT contracts.  Nevertheless 
some procurements involve the handling of informat ion sensitive for security or privacy reasons.  In 
such circumstances a procuring agency’s ability to allow information to be  transmitted outside the 
jurisdiction of Australian Courts may be limited. 
 
Full information on the laws, regulations and pol icies governing procurement by the Australian 
Government is available at the following  website www.finance.gov.au/procurement/. 
 
Japan:
 
 
Question: 
(Paragraph 61) 
 
Could Australia explain why it does not participate in the GPA? What is the difference between the 
GPA and the Australian regime on government procurement?  
Answer: 
Australia has no intention at present of acceding to  the WTO Agreement on Government Procurement 
(GPA). 
The GPA has become clearer and has several areas of  similarity with the Government Procurement 
Chapter of the Australia-United St ates Free Trade Agreement.  However, there still remain a number 
of areas of concern. 
Australia supports the liberalization of government pr ocurement markets.  In its bilateral Free Trade 
Agreement (FTA) negotiations, Australia seeks provi sions on Government Procurement that achieve 
market liberalization in a manner consistent with efficient and effective commercial procurement processes.   
The Australian Government has an effective r esource management framework which is strongly 
focused on performance, efficiency and accountabilit y.  An integral component of the resource WT/TPR/M/178/Add.1 
Page 136  
 
  management framework is the Australian Govern ment’s procurement framework which is built 
around the core principle of achieving value for money through competition, non-discrimination and 
efficient, effective and transparent processes.  Reduc ing red tape in public administration is a current 
priority of the Australian Government. 
Australia considers that the GPA, with its str ong pro-regulation approach to procurement, would 
unduly impair the efficiency, effectiveness and tran sparency of procurement processes, leading to 
reduced productivity and unnecessary higher costs fo r both government and industry.  Australia 
questions the need for the level of prescription of procurement processes reflected in the GPA. 
While there are many areas of similarity be tween the GPA (as revised) and the government 
procurement chapter of the Australia-United States Free Trade Agreement, there are also significant 
differences where the GPA is more burdensome and in flexible in respect of procurement processes.  
Particular areas of concern are the limitations on selective tendering, minimum time periods and 
provisions for supplier review.  
Australia notes that in these and a number of other areas, the GPA requirements are a substantial 
departure from commercial best practice and therefore represent a potential barrier for firms (domestic 
and foreign) wishing to enter the government procurement market. 
A current priority of the Australian Government is  reducing red tape in public administration.  
Regulation and administrative costs, such as tho se required by the GPA, can constitute significant 
barriers to trade including in the government procurement market.   
Australia continues to monitor developments in th e GPA with a view to reassessing its position should 
developments address its concerns as outlined above. 
Mexico:
 
Question: 
What are the access or preferential treatment condi tions for purchases of goods and services from a 
partner country which, as such, benefit from the specific commitments on go vernment procurement, 
as opposed to the conditions that  apply to goods and services orig inating in non partner countries? 
Answer: 
The Australian Government’s Procurement polic y framework is non-discriminatory and does not 
differentiate between domestic a nd foreign suppliers or between fo reign suppliers.  The framework 
extends to all foreign suppliers and products, measures required for implementation of the Singapore-
Australia FTA and Australia-United States Free Trade Agreement.  
This multilateral approach to non-discrimination is  current government policy and supports a core 
focus on achieving value-for-money.  The advantage for products and suppliers  of FTA partners is 
that non-discrimination is assured in the event of any future policy change by the Australian 
Government.  
Singapore:  
Question: 
Re para 62 (page 50), while Australia has observer  status in the WTO Committee on Government 
Procurement, it has no intention of becoming a party to the GPA.  
We note that Australia has experience with its regulations relating to government procurement. 
Australia has also made government procuremen t commitments in three of its FTAs. Given this  WT/TPR/M/178/Add.1 
 Page 137 
 
 
  experience, why is Australia hesitating to join th e GPA? What potential difficulties does Australia see 
in the GPA?  Answer: 
 Australia has no intention at present of acceding to  the WTO Agreement on Government Procurement 
(GPA).  The GPA has become clearer and has several areas of  similarity with the Government Procurement 
Chapter of the Australia-United St ates Free Trade Agreement.  However, there still remain a number 
of areas of concern. 
 Australia supports the liberalization of government pr ocurement markets.  In its bilateral Free Trade 
Agreement (FTA) negotiations, Australia seeks provi sions on Government Procurement that achieve 
market liberalization in a manner consistent with efficient and effective commercial procurement 
processes.   
 The Australian Government has an effective r esource management framework which is strongly 
focused on performance, efficiency and accountabilit y.  An integral component of the resource 
management framework is the Australian Govern ment’s procurement framework which is built 
around the core principle of achieving value for money through competition, non-discrimination and 
efficient, effective and transparent processes.  Reduc ing red tape in public administration is a current 
priority of the Australian Government.  Australia considers that the GPA, with its str ong pro-regulation approach to procurement, would 
unduly impair the efficiency, effectiveness and tran sparency of procurement processes, leading to 
reduced productivity and unnecessary higher costs fo r both government and industry.  Australia 
questions the need for the level of prescription of procurement processes reflected in the GPA. 
 While there are many areas of similarity be tween the GPA (as revised) and the government 
procurement chapter of the Australia-United States Free Trade Agreement, there are also significant 
differences where the GPA is more burdensome and in flexible in respect of procurement processes.  
Particular areas of concern are the limitations on selective tendering, minimum time periods and 
provisions for supplier review.   Australia notes that in these and a number of other areas, the GPA requirements are a substantial departure from commercial best practice and therefore represent a potential barrier for firms (domestic 
and foreign) wishing to enter the government procurement market. 
 A current priority of the Australian Government is  reducing red tape in public administration.  
Regulation and administrative costs, such as tho se required by the GPA, can constitute significant 
barriers to trade including in the government procurement market.    
Australia continues to monitor developments in th e GPA with a view to reassessing its position should 
developments address its concerns as outlined above. 
 
Switzerland:
  
 
Question: 
(Paragraph 4)  The Secretariat’s report indicates that Australia  has no plans to become a party to the WTO 
Agreement on Government Procurement and that Au stralia considers that accession to the agreement WT/TPR/M/178/Add.1 
Page 138  
 
  would impose unnecessary costs and delays on procuremen t operations. Given that Australia attaches 
great importance to transparency and economic efficiency in general, could the Australian authorities 
explain how they reconcile the need for transparency and economic efficiency in general with 
procurement and public expenditure practices wh ere only domestic providers are authorized to 
present bids ? Would enlarging the scope of bidders also to foreign suppliers not permit a more 
competitive bidding process and hence ensure cheaper public procurement for the Australian public 
sector ?  
 Answer: 
 The perception that Australian Government pr ocurement and public expenditure practices only 
authorize domestic providers to present bids is incorrect.  
 
The Australian Government has an effective financial management framework which is strongly 
focused on performance, e fficiency and accountability.  An integral component of the financial 
management framework is the Australian Government’s procurement framework.  
 This procurement framework is built around the core  principle of achieving value for money through 
competition, non-discrimination and efficient, effective and transparent processes.  Non-
discrimination, particularly with respect to fo reign suppliers and products, is recognized as an 
essential component to ensuring strong competition.  An  illustration of this concept is that Australia 
operates a single government procurement market that  sets the same rules for all suppliers whether 
from FTA partners or not.  Furthermore, an important component of ensuri ng strong competition is minimizing the regulatory 
barriers for suppliers entering the government procurem ent market.  In this re gard Australia considers 
the GPA unhelpful as it results in specific require ments for government procurement that are at 
variance to commercial norms. 
 
Local-content requirements
 
 China:
 
 
Question: (Paragraph 71-72)  It is indicated in para.72 of the Secretariat Report that, since its last trade policy review, Australia 
has not made any notification under the WTO Agr eement on Trade-Related Investment Measures. 
Does this mean that the local-content requirements  as mentioned in para.71 have all been phased 
out?   Answer: 
 Broadcasting is one of the sectors mentioned in pa ragraph 71, page 52 of the Secretariat report.  
Australia has not made any GATS commitments on broadcasting (audio-visual) services in the WTO 
and therefore the national treatment (Article XVII)  obligations do not apply to the local content 
provisions contained in part 9 of the Broadcasting Services Act 1992 . 
 Question:  Could Australia confirm that it no longer has any TRIMs including local-content requirement? 
  WT/TPR/M/178/Add.1 
 Page 139 
 
 
  Answer: 
 
Australia confirms that it does not maintain any TRIMs including local-content requirements. 
 
Japan:  
 
Question: (Paragraph 71) 
 
According to the notes of paragra ph 71, page 52, of the Secretaria t report, Australia keeps local-
content requirements in several sectors.  
 
Please indicate how these measures are consistent wi th the WTO Treaties such as Article II of TRIMs, 
Article III of GATT and Article XVII of GATS.  
 
Answer: 
 
One of the sectors mentioned in paragraph 71, pa ge 52 of the Secretariat report is broadcasting 
services.  Australia has not made any commitments on broadcasting services in the WTO and the 
national treatment and market access obligations contained in the WTO Treaties therefore do not apply to broadcasting services in Australia.  Australia maintains this position as it is committed  to preserving the right to regulate broadcasting 
services to achieve cultural and social objectives, to  sustain Australia’s creative resources and to 
ensure that Australians have access to th eir own images and stories on television.  
 
State trading
 
 Argentina:
 
 
Question:  Paragraph 10 (page 17-18) of the Secretariat’s repor t notes that there has been a substantial increase 
in the number of new regulations in recent years, which has led to concern in Australia about 
overwhelming Parliament’s ability to examine them adequately and the compliance burden for 
business. In response to this c oncern the Government created on 12 October 2005 a taskforce (the 
Banks Taskforce) to consider th ese matters. The taskforce made a series of recommendations and 
established a single desk arrangement for wheat exports.  Could Australia provide details about the single desk arrangement for wheat exports recommended by 
the Banks Taskforce? 
 Paragraph 76 (pages 54 and table III.5) of the Sec retariat report refers to state-trading enterprises 
which export. Could Australia provide detailed information about the regulation, operation and 
participation of state-trading en terprises in the export trade?  
 
Answer: 
 
The Australian Government’s final response to the Banks Taskforce report Rethinking Regulation: 
Report of the Taskforce on Reducing Regulatory Burdens on Business  is available for download at 
www.treasury.gov.au 
 WT/TPR/M/178/Add.1 
Page 140  
 
  The Banks Taskforce did not make any recommendati ons about the actual arrangements or structure 
of the Australian wheat export marketing system.  The Banks Taskforce recommended that the Austra lian Government bring forward an independent 
review of the Wheat Marketing Act 1989  to be conducted according to National Competition Policy 
(NCP) principles.  
 While the review under NCP principles is currently  scheduled for 2010, the Australian Government 
convened on January 2007 the Wheat Export Mark eting Consultation Committee to consult with 
growers and industry stakeholders in relation to th eir views on the needs of Australia’s wheat export 
arrangements.  The Committee will report its fi nding to the Australian Government and the 
Government intends to use this report to inform  its decisions on future wheat export marketing 
arrangements.  Australia’s most recent notification (G/STR /N/11/AUS submitted 28 June 2006) to the WTO 
Working Party on State Trading Enterprises provi des detailed information about the regulation, 
operation and participation of Australia’s state trading entities.    
 
Brazil:
 
 Question: 
 
The Australian Wheat Board (AWB) is one of the ma jor “single desks” in the world, maintaining the 
monopoly of wheat exports. Brazil  acknowledges the creation of the “Wheat Export Marketing 
Consultation Committee” as an important step towa rds a liberal market struct ure for wheat export. 
What is the focus of these c onsultations? Could the Australi an delegation provide additional 
information regarding the timeframe and envi saged scope of changes to the AWB?  
 Answer: 
 
Under temporary arrangements enacted in Dece mber 2006, the power of AWBI under the Wheat 
Marketing Act 1989 to veto applications for bulk wheat exports has been removed for a limited 
period.  The Wheat Export Authority (WEA) cannot give consent or refuse an application for bulk 
wheat exports without the prior approval of the Mini ster for Agriculture, Fisheries and Forestry.  The 
Minister also has the power to direct the WEA to gi ve or refuse an application for bulk wheat exports.  
The new arrangements will be in effect until 30 June 2007.  
On 12 January 2007, the Australian Government convened the Wheat Export Marketing Consultation 
Committee to consult with growers and industry stake holders in relation to their views on the needs of 
Australia’s wheat export arrangements.  The Co mmittee will report its finding to the Australian 
Government and the Government intends to use this  report to inform its decisions on future wheat 
export marketing arrangements.   
 
Chinese Taipei:
 
 
Question: 
(Paragraph 76)  
Table III.5, which accompanies paragraph 76 of th e Report, shows State-trading enterprises (STEs) 
for exports, 2006.   
Is there any plan for these State-trading enterp rises to be privatized in the future?  
  WT/TPR/M/178/Add.1 
 Page 141 
 
 
  If so, is the timetable available now? 
We are also interested in learning more about the approaches employed, and whether, in the process 
of privatization, there are any lim itations placed on foreign investors? 
Answer: 
As listed in Table III.5 (Secretariat’s Report, page 54), AWB (International) Ltd, Grain Pool Pty Ltd 
and ABB Grain Export Ltd are private companies who operate on a commercial basis as private 
traders.  Further, AWB (International) Ltd and A BB Grain Export Ltd are wholly owned subsidiaries 
of publicly listed companies (AWB Ltd and ABB Gr ain Ltd), and GrainPool Pty Ltd is owned by the 
grower-owned cooperative CBH Ltd.  The Australia n Government provides no financial assistance or 
price support to any of these bodies.   
The New South Wales Rice Marketing Board is a st ate trading enterprise operated by a statutory 
authority.  This body is the legislative responsibility  of the State Government of New South Wales.  
The deregulation of export marketing arrangement s that are under the jurisdiction of a State 
Government is a matter for each respective State Government to determine. 
Australia’s most recent notification (G/STR /N/11/AUS submitted 28 June 2006) to the WTO 
Working Party on State Trading Enterprises provi des detailed information about the regulation, 
operation and participation of Australia’s state trading entities. 
EC: 
(Paragraph 7) 
It is stated that "Despite the privatization/corpor atization of some state-trading enterprises, state-
trading arrangements have been maintained for exports of so me agricultural products."  
Could Australia explain the underlying reasons for maintaining these state-trading arrangements?  
Which agricultural products are affected?   
Answer: Full details of Australia’s state trading enterpri se arrangements have recently been notified to the 
WTO.  Please refer to Australia’s New and Full Notification Pursuant to Article XVII:4(a) of the 
GATT 1994 and Paragraph 1 of the Understanding on the Interpretation of Article XVII  date 26 June 
2006 (G/STR/N/11/AUS).  This notifica tion outlines the commodities affected.  
Question: 
(Paragraph 57) 
 Australia restricts the exports of certain commod ities to only one company and furthermore, this 
company is allowed to veto exports.   
Could Australia provide the underlying reasons for applying these measures? How does Australia 
reconcile these measures with its advocacy for free trade?  
 
Answer: 
 
In specific circumstances such as for wheat, export si ngle desk arrangements are considered to be the 
best way to conduct business, manage risk and main tain the reputation of Australia’s high quality 
produce.  These arrangements are consistent with in ternational trade obligations and do not distort 
global trade. WT/TPR/M/178/Add.1 
Page 142  
 
  Bulk wheat is the only commodity where exports from all Australian states and territories are subject 
to a single desk arrangement.  Other single desk arrangements are limited to a small number of commodities and apply only in certain states.  Thes e arrangements are outlined in detail in Australia’s 
recent New and Full Notification Pursuant to Article  XVII:4(a) of the GATT 1994 and Paragraph 1 of 
the Understanding on the Interpretation of Article XVII  (G/STR/N/11/AUS submitted 28 June 2006). 
 
The Australian Government provides no financial a ssistance or price support to any of these state 
trading enterprises.  Further, Australia supports the elimination of the trade-distorting practices of state trading enterprises such as government fina ncing and the underwriting of commercial losses.  
 Japan:
 
 Question: (Paragraph 76 and 24) 
 
(AWB (Australia Wheat Board) is granted exclus ive rights to purchase and sell wheat. From the 
buyers’ side, the process of price-setting and discreti onary appears opaque. Japan is of the view that 
such state trading is problematic in light of  avoiding market distortion. Please explain current 
discussions and future prospects on single-desk arr angement which, Japan understands is now under 
review in Australia. 
When a foreign agricultural investor cultivates and ha rvests wheat in Australia and tries to export it 
to its home country what restrictions could apply?  
Answer: Selling prices for wheat exported by AWB (Intern ational) Limited (AWBI) are determined by 
commercial negotiations entered into by AWBI and the purchaser.  As is the case with most 
commercial transactions, details (including price) of  the contract entered into by the parties are 
confidential to the parties.  However, it should be  noted that AWBI operates in a competitive world 
market place for wheat and so contractual prices ar e strongly influenced by prevailing world prices. 
Under temporary arrangements enacted in December 2006, the power of AWBI under the Wheat 
Marketing Act 1989  to veto applications for bulk wheat exports has been removed for a limited 
period.  The Wheat Export Authority (WEA) cannot give consent or refuse an application for bulk wheat exports without the prior approval of the Mini ster for Agriculture, Fisheries and Forestry.  The 
Minister also has the power to direct the WEA to gi ve or refuse an application for bulk wheat exports.  
The new arrangements will be in effect until 30 June 2007. 
On 12 January 2007, the Australian Government convened the Wheat Export Marketing Consultation 
Committee to consult with growers and industry stake holders in relation to their views on the needs of 
Australia’s wheat export arrangements.  The Co mmittee will report its finding to the Australian 
Government and the Government intends to use this  report to inform its decisions on future wheat 
export marketing arrangements.   
Any entity is free to grow wheat in Australia and se ll it into the domestic market without restriction.  
Japan: 
 
Follow-up question: 
According to the answer, the Mini ster for Agriculture has the pow er to direct the WEA to refuse an 
application for bulk wheat exports.  
Please explain in which cases the application fo r export is refused and the rationale for it?  WT/TPR/M/178/Add.1 
 Page 143 
 
 
  Answer: 
Under the Wheat Marketing Act 1989, section 63, the Minist er is to have regard to the public interest 
in making a decision to direct the Wheat Export Au thority (WEA) to approve or reject a bulk export 
application.  The Minister is not able to direct th e WEA in relation to exports in bags and containers. 
Peru:  
Question: 
Could Australia explain what the marketing assistan ce granted to agricultural products such as rice 
consists of? 
Answer: 
Australia’s most recent notification (G/STR /N/11/AUS submitted 28 June 2006) to the WTO 
Working Party on State Trading Enterprises provi des detailed information about the regulation, 
operation and participation of Australia’s state tr ading entities, including the Rice Marketing Board 
for the State of New South Wales. 
Thailand:  
Question: 
Please explain the roles and responsibilities of the st ate trading arrangements for the export of rice, 
dairy and sugar. Do the relevant state trading enterprises have monopoly power in trading these 
products?  If private participation in  exportation is allowed, what is the proportion in market share of 
the relevant state trading enterprise and of the private entity?  How do Australian state trading 
enterprises help promote the comp etitiveness of Australian farmers?  
Please provide more information regarding the tr ading system processes for rice, dairy and sugar in 
Australia (from farming processes to exportation). 
Answer:  
In July 2003, the Australian Dairy Corporation w as converted into a private corporation, Dairy 
Australia, which no longer meets the WTO definition of  an STE.  All dairy production, marketing and 
exporting operations occur in a deregulated, competitive market-driven environment. 
On 1 January 2006, the state of Queensland Government amended the Sugar Industry Act 1999 .  This 
legislation repealed the statutory arrangement s under which ownership of  Queensland sugar was 
vested in Queensland Sugar Limited.  With these changes, other entities are now able to export raw 
sugar from Queensland.  All Australian sugar pr oduction, marketing and export now occurs on a 
deregulated, market-driven basis. 
Regarding rice, Australia’s most recent notifi cation (G/STR/N/11/AUS submitted 28 June 2006) to 
the WTO Working Party on State Trading Enterp rises provides detailed information about the 
regulation, operation and participation of Austra lia’s state trading entities, including the Rice 
Marketing Board for the State of New South Wales. 
US: 
Question: 
While Australia’s single-desk State Trading Enterp rises have been modified to allow more private 
sector participations, the Secretariat Report (paragr aph 76 on page 54) indicates that such entities 
still manage exports of bulk wheat and, in some st ates, bulk barley, lupines, canola and rice. WT/TPR/M/178/Add.1 
Page 144  
 
  Is Australia considering any further steps to elim inate the monopoly export control of state trading 
enterprises?  Answer: 
 The Australian Government no longer controls any agricultural state trading enterprises.  The sole 
remaining non-privatized state-trading enterpri se is the New South Wales Rice Marketing Board 
(listed in Table III.5 of the WTO Secretariat’s repo rt).  The future of the New South Wales Rice 
Marketing Board, and other sub-national state trad ing enterprise arrangements are legislative matters 
for respective state governments to consider.  
 
On 12 January 2007, the Australian Government convened the Wheat Export Marketing Consultation 
Committee to consult with growers and industry stake holders in relation to their views on the needs of 
Australia’s wheat export arrangements.  The Comm ittee will report its findings to the Australian 
Government and the Government intends to use this  report to inform its decisions on future wheat 
export marketing arrangements. 
 
Export assistance
 
 
Argentina:  
 Question:  Export finance, guarantees and insurance (Secret ariat report paragraph 87, page 57) 
 
Could Australia advise whether it provides finan ce or credit guarantee services to agricultural 
exporters? If so, could it indicate the conditions  which apply to this finance and the sectors which 
benefited during the period 2002-2006?  
 
Answer: 
 
EFIC has not provided credit insurance for agricultural exports since the divestment of its short term 
credit insurance business in 2003.  EFIC’s busin ess focuses on providing financing, guarantees and 
insurance for medium to long term projects (of a duration exceeding two years and usually of a capital 
nature) that commercial providers are unwilling or unable to service. 
 The Australian Government maintains its ability to provide short term credit insurance on a ‘safety 
net’ basis on the National Interest Account.  That is, should commercial provide rs exit the short term 
credit insurance market or a segment of that ma rket, the Australian Government has reserved the 
capacity to provide short term credit insurance on its  own account.  The only facility of such a nature 
is a short term credit insurance facility for exports to Iraq.  Due to the high level of commercial and 
political risk, commercial providers will not provide le tters of credit or credit insurance for exports to 
Iraq.  This facility has never been used.  EFIC is able to provide working capital guarantees to small to medium exporters (SME), including 
potentially agricultural related exporte rs, under its EFIC Headway program.  
 
Bolivia
 
 Question: 
 
The Report states that the core business of the Ex port Finance and Insurance Corporation (EFIC) is 
to provide various finance, insurance and guar antee facilities to support Australian companies  WT/TPR/M/178/Add.1 
 Page 145 
 
 
  exporting or investing overseas and that the EFIC works where the commercial market is unable or 
unwilling to provide support to Australian companies.   Are the terms on which the EFIC provides finance, insurance and guarantee facilities to Australian 
companies the same as those on which Australian entrepreneurs would obtain  such services under the 
private commercial system or are they more favourable?   
Answer: 
 
The Export Finance and Insurance Corporation (EFI C) provides finance, insurance and guarantees in 
support of Australian exporters where the commerc ial market is unable or unwilling to provide 
support.  Hence, it is not possible to compare the pricing and terms of the support provided by EFIC with that of commercial providers.  EFIC, however, has a number of incentives to operate in a manner 
comparable to commercial providers.  EFIC is instru cted to operate on a self-sustaining basis and has 
operated at a profit and returned a dividend to the Au stralian Government.  It is also instructed to 
comply with the Australian Government’s obligations under the Arrangement on Officially Supported 
Export Credits , and to maintain adequate capital to meet  actual and contingent liabilities.  EFIC’s 
mandate is to operate where the private market  is absent and these incentives mitigate against EFIC 
providing finance, insurance and guarantees on term s that are more favourable than comparable 
services provided by the private sector.  EFIC often u ses the pricing and terms of the private sector for 
comparable services as a guide to its own pricing and terms. 
 
Question: 
 How in practice does EFIC apply the phrase "is unabl e or unwilling to provide support to Australian 
companies" with regard to private firms providing similar services?  
 
Answer: 
 
EFIC’s performance against its mandate to opera te where commercial providers are unwilling or 
unable to provide support is, as a matter of practi ce, assessed every three years during a review of 
EFIC.  The 2001 review of EFIC assessed that the co mmercial market is able to meet the needs of 
exporters for short term credit insurance and, in 2003,  the Australian Government divested this part of 
EFIC’s operations to a private market operator, Atra dius.  To date, reviews have confirmed that the 
commercial market’s appetite for medium to lo ng term finance, insurance and guarantees for 
exporters remains limited. As a consequence, EFI C exercises commercial ju dgement for transactions 
relating to its remaining business.  
For all transactions, EFIC management considers wh ether the finance, insurance or guarantee could 
be provided by commercial providers.  The availab ility of private market financing cannot be defined 
according to an express set of criteria (particularly fo r projects with medium to long term time frames 
for which the interest of commercial market providers  fluctuates).  Discretion is given to management 
to exercise its judgement in light of its commercia l expertise and prevailing market conditions.  Large 
transactions over a certain size are required to be brought before the EFIC Board.  All transactions 
brought to the EFIC Board are required to explain why the finance, insurance or guarantee cannot, in 
management’s judgement, be provi ded by commercial providers.   
 
Question: 
 
The Report states that a maximum of seven grants of  A$150,000 can be offered per exporter under the 
EMDG scheme, meaning that up to A$1,050,000 per year are available to enterprises with an annual 
income ceiling of A$30,000,000.  WT/TPR/M/178/Add.1 
Page 146  
 
  Could this be understood to mean that a producer can receive a high percentage of his total exports 
in grant form? Or are there mechanisms for determ ining the maximum percentage of the grants that 
can be allocated to an individual exporter? If this  is the case, please explain what mechanisms are 
used to determine the parameters establishi ng the percentage of the grant offered.  
 
Answer: 
 
No.  Eligible applicants for the Export Market De velopment Grants (EMDG) scheme can only receive 
one grant per annum.  The maximum gran t payable per annum is $A 150,000. 
 
Chinese Taipei:
 
 
Question: 
(Paragraph 78)  
As indicated, under the Export Market Development Grant (EMDG) Scheme, the Australian 
Government reimburses up to 50
﹪of specified export promotion expenditures above a threshold of 
$A 15,000. 
 It would be appreciated if Australia could pl ease provide further info rmation as follows:  
 
Is the funding of the EMDG Scheme mainly from the government budget, or are there other funding 
sources as well?  
Answer:  
The EMDG scheme is funded from the government budget.    Question:  Is there any plan to phase the scheme out over time? 
 
Answer: 
 
Current legislation provides for the EMDG scheme to run until the end of the 2010/2011 financial 
year.  The legislation also requires an independent review of the scheme which must report to the 
Minister for Trade by 30 June 2010.  The Australian Government will take the report of the review 
into account when it considers the future of the scheme after 2010/2011. 
 
Question: 
 
What is Australia’s view on the scheme’s consis tency with WTO rules and Agreements, in particular 
with regard to the Agreement on Subsidies and Countervailing Measures? 
 
Answer: 
 
As Australia has previously indicated in th e WTO Subsidies Committee, the EMDG scheme is 
consistent with Australia’s WTO obligations.  The scheme is not a specific subsidy and is therefore 
not notifiable under the WTO Agreement on Subsidies and Countervailing Measures.  
  WT/TPR/M/178/Add.1 
 Page 147 
 
 
  Columbia:  
 Question: 
 
Have the export subsidy and duty concession pr ogrammes been notified to the WTO Committee on 
Subsidies and Countervailing Measures?  
The report states that the EMDG is largely aimed at the small and medium enterprises.  What is done 
to guarantee the consistency of this subsidy scheme with WTO provisions? 
 Answer: 
 The scheme is not a specific subsidy and is therefore not notifiable under the WTO SCM Agreement.  
Australia has previously informed the WTO Su bsidies Committee that the EMDG scheme is 
consistent with Australia's obligations.   
 
Question: 
 What are the Guidelines that apply to goods that are not "made in Australia"?  What are the subsidies granted to the companies that manufacture such goods?  What percentage of the profit goes to them?  
According to the Report of the Secretariat (paragr aph 80), it is based on Significant Net Benefit.  
Could Australia expand on the word "significant"? 
 
Answer: 
 The guidelines that apply to ‘goods not made in Australia’ are the Export Market Development Grants 
(Significant Net Benefit) Guidelines 2006, made under section 24(b) of the EMDG Act 1997. These provide in effect that goods not made in Austra lia may be eligible goods for the purposes of EMDG 
and that companies marketing such goods may rece ive EMDG grants in resp ect of such marketing 
activities.  
These guidelines state that in determining, for pa ragraph 24(b) of the Export Market Development 
Grants Act 1997, whether Australia will derive a si gnificant net benefit, Austrade, which administers 
the scheme, must consider whether:  
a) the business assets which are used in maki ng the goods ready for sale (other than 
assets used in manufacture) are primarily or substantially based in Australia; and 
b) the activities (other than manufacture) which result in the goods being made ready for 
sale are primarily or substantially carried on in Australia; and 
c) a significant proportion of the value of the goods is added within Australia; and 
d) any sale of the goods generates, or would ge nerate, substantial ec onomic benefits for 
Australia, including employment. 
 
Goods must meet all of the four assessment criteri a to be eligible under pa ragraph 24(b) of the EMDG 
Act.  
Question: 
 
Does the Trade and Export Concession Scheme (TRADEX)  cover capital goods or parts imported by 
companies to produce goods for export?  WT/TPR/M/178/Add.1 
Page 148  
 
  Answer:  
 
Tradex orders are granted for nominated goods that  are imported and intended for export or to be 
incorporated in other goods intended for export.  However, imported capital items or parts used to 
produce exports are ineligible fo r the Tradex Scheme, whether or not those items or parts are 
subsequently exported after such use. 
 
Mexico:
 
 
Question: Paragraph 88 
According to this paragraph, the Export Finan ce and Insurance Corporation (EFIC) provides 
assistance through a commercial account and a national  interest account.  According to footnote 127, 
national interest transactions occur when the tr ansaction size or risk exceeds the EFIC's commercial 
parameters, and where the Minister for Trade considers them to be of national interest. 
 
What are the EFIC's commercial parameters?  What criteria are used by the Ministry for Trade to 
determine whether transactions are in the national interest?  
 
Answer: 
 
EFIC is instructed to operate on a self-sustaining ba sis, to comply with the Australian Government’s 
WTO obligations and the Australian G overnment’s obligations under the Arrangement on Officially 
Supported Export Credits , and to maintain adequate capital to meet actual and contingent liabilities.  
EFIC has a Board which decides on what are acceptabl e commercial risks.  Typically, a transaction is 
referred to the National Interest Account when its ri sk is higher than EFIC can prudently accept on its 
commercial account (for such risks EFIC may jeop ardise its ability to operate in a self-sustaining 
manner in the event of a default), or the transac tion would cause EFIC to exceed the counterparty or 
country limits that EFIC has established to maintain its capital adequacy.  
 There is no formal definition of the ‘national inte rest’.  Whether a transaction is in the national 
interest or not is a policy decision that is made by the Minister for Trade, usually in consultation with 
other Ministers.  In practice, few transactions  are referred to the National Interest Account. 
 Thailand:
 
 Question: 
 
The Secretariat Report states that various methods have been used to measure domestic support to 
agriculture.  Could Australia please explain in de tail how the subsidy programmes are operated for 
each eligible product and the impact on Australia n individual farmers and the relevant Australian 
agriculture sector as a whole?  
Answer:  
For a detailed explanation of dom estic support programmes in the financial year 2005-06 please refer 
to Australia’s latest notification da ted 20 February 2007 (G/AG/N/AUS/64). 
 
The majority of support provided by the Australian Government to agricultural producers falls within 
the ‘Green Box’ of domestic support measures.  In 2005-06 the Australian Government, along with 
the state and territory governments, collectively invested $A 2,088 million in Green Box support to agricultural producers.  WT/TPR/M/178/Add.1 
 Page 149 
 
 
   
Programmes falling within the Agriculture Advanci ng Australia package make up a large portion of 
Australia’s Green Box support.  These programme s cover training and e ducation, financial 
management, welfare support, counselling and capac ity building activities to improve skills, business 
structures and farm planning.  These measures aim to develop an environment that enhances self 
reliance and market responsiveness, and which facilita tes market adjustment.  More information about 
the Agriculture Advancing Australia progr ammes may be found at www.daff.gov.au/aaa. 
 Support is also provided to farmers through a range  of environmental programmes administered by 
the National Heritage Trust (www.nht.gov.au) a nd under the National Action Plan for Salinity and 
Water Quality (www.napswq.gov.au). 
 A significant amount of support is currently provided as drought assistance to agricultural producers that have been severely aff ected by the drought.  These m easures recognise the unprecedented 
severity, length and extent of the current drought  and its impact on regional and rural communities 
and the environment.  The drought assistance packag e includes short term income support, interest 
rate subsidies, business advice grants and access to  financial and personal counselling.  The drought 
assistance support measures are consistent with Green Box provisions as support for relief from natural disasters.  Australia provides a very low level of Amber B ox support to agricultural industries.  Amber Box 
support is directed predominantly through the Dair y Structural Adjustment Program.  This program 
provides support to producers to assist adjustment  as a result of dairy industry deregulation, with 
payments funded by a levy on domestic sales of fluid milk.  This program is scheduled to end in the 
2008-09 financial year.  De minimis Amber Box suppor t is also provided to sugar and wheat.  In 
2005-06 product specific de minimis support was $A 13.26 million. 
 
There is substantial evidence to suggest those co untries that provide high levels of Amber Box 
support and protect their farmers from the market ar e not guaranteed a sustainable farming future (in 
fact, they often experience a faster rate of decline in farm numbers).  Hence, Australia aims to design 
non- or minimally trade distorting support measures which comply with the Green Box rules.  These 
measure focus on support that improves farmers’  capacity to increase on-farm productivity and 
respond quickly to changes in market signals. 
 The report Trends in Australian Agriculture, released by the Productivity Commission in 2005, 
provides a comprehensive analysis of developments  in the agricultural sector over recent decades.  
Australia’s focus on promoting farmers’ self-relian ce has contributed to the productivity gains, 
increased competitiveness and export-orientated focus of  many agricultural industries.  A copy of the 
report may be viewed at www.pc.gov.au. 
 
Taxation  
Columbia
 
 Question: (Paragraph 25) 
 
Apart  from customs duties, imports are subject to a goods and services tax (GST),  which applies to 
most imported goods.   Exemptions to GST include certain foodstuffs, some medical aids and  imports 
that qualify for certain duty  concessions.  What conditions must  imports meet in order to be eligible for an exemption from the goods and  
services tax (GST)? WT/TPR/M/178/Add.1 
Page 150  
 
  What duties or taxes are  not cancelled if the above-mentioned conditions are complied  with? 
 Answer: 
 
To be eligible for a Goods and Services Tax (GST) exemption, an import could be: 
 
- an item listed in Division 38 of the GST Act (e.g. basic food);  or - under the low value threshold ($A 1,000);  or - exempt from customs duty (e.g. re pair and warranty importations). 
 Question:  Taxes on international trade contributed only 2 per cen t  to total tax revenue (Table III.6).  Does the 
item "taxes on international trade" in Table III.6 refer to  tariffs only, or does it include other taxes or 
charges as well, such as the GST  of 10 per cent levied on almost all  imports? 
 
Answer: 
 
Generally speaking, the Goods and Services Tax (GST ) would not be counted as a tax on international 
trade as GST does not apply to exported goods.  Rather, it applies to domestic consumption of all goods, whether imported or domestically produced.   
 
EC:
 
 Question: (Paragraph 17) 
 
We note that the 25% Luxury Car Tax applied to  the value of vehicl es above the Luxury Tax 
Threshold (LTT) of $A57009 remains in force and t hat the LTT has not changed since 2002-03. This 
is despite the 2002 review of options for post 2005 assistance arrangements for the Automotive 
Manufacturing sector in Australia conducted by  the Productivity Commission finding that "As a 
revenue-raising instrument, the luxury car tax has defic iencies. If it is retained, the threshold for the 
tax (and the associated depreciation limit) would n eed to be raised to reflect previous price 
movements in the luxury vehic le market". The EU is concerned that this tax, which seems to be biased 
against imports in its effect, remains in place.   Does Australia have any plans, whether as part of its tax reforms or otherwise, either to remove this 
discriminatory tax, or at the very le ast substantially to increase the LTT? 
Why cars only are subject to this Luxu ry Tax and not other "luxury" goods? 
 
Provided that just around 5% of the cars in AUS are subject to the luxury tax, raising an estimated 
$A320mn in revenue in 2006-07 or 0.1% of total receipt s, it seems to be a minor source of revenue for 
the Government.  
 
Why does the Australian government want to maintain such a cu mbersome and heavy procedure to 
collect such a minor amount of revenue? 
 
An effective way to eliminate this tax could be to gradually increase the threshold so as to more 
clearly identify a "luxury car" while reducing the ta x rate during a certain period of time. It is worth 
recalling the abolition of the US Luxury Tax, which phase-out consisted on a periodic adjustment of the base amount and annually decreasing tax rates during the period 1996-2003. 
 Would Australia consider this possibility?    WT/TPR/M/178/Add.1 
 Page 151 
 
 
  Answer: 
 
At this time, the Australian Government consid ers that the current Luxury Car Tax (LCT), its 
threshold and indexation mechanism are appropriate.  
The Luxury Car Tax (LCT) was introduced on 1 July 2000 at a time of major tax reform in Australia.  
At that time the policy objective of the measure was to maintain existing Government policy with 
respect to the taxation of luxury cars relative to non-luxury cars by ensuring that after the introduction 
of a Goods and Services Tax (GST), luxury cars fell in price only by about the same amount as a car 
just below the luxury threshold. 
 
A Productivity Commission report on Automotive Assistance  released in 2002 considered the issue of 
a LCT.  The Productivity Commission concluded that the removal of the tax would be beneficial.  
Alternatively, if the Government chose to keep th e tax, then the Commission considered there is a 
case for raising the threshold because it has not kept pace with price movements in the luxury vehicle 
market. 
 On 13 December 2002 the Government responde d that it did not accept the Productivity 
Commission’s findings and considered that the exis ting LCT, its threshold and indexation mechanism 
were appropriate.  Japan:
 
 Question: 
(Paragraph 25) 
 The luxury car tax (LCT) is levied  on motor vehicles (except motor cycles or similar vehicles) at the 
rate of 25% on the goods and services tax (GST)- exclusive value that exceeds the threshold 
determined annually by the Commissioner of Taxation. In 2004/2005, 97% of the LCT was collected on imported vehicles. 
 
Does Australia have a plan to adjust the LCT syst em so that imported vehicles are treated less 
discriminatively?  
 
Answer: 
 
The Luxury Car Tax (LCT) applies to both domest ically produced vehicles and imported vehicles 
without discrimination.  Ultimately, price is the so le factor in determining which vehicles are subject 
to LCT.  Indicative of this, the majority of all imported vehicles are not subject to any LCT.  It has been a long standing policy by successive Au stralian Governments to have a tax differentiation 
between luxury vehicles and other vehicles sold in Au stralia.  At this time, the Australian Government 
considers that the current LCT, its thres hold and indexation mechanism are appropriate. 
 Question: (Paragraphs 97-98)   As to Australia's international tax reform descri bed in the Secretariat report, a number of investors 
and importers point out that the Australian authorit y’s practice of the taxation on transfer pricing 
adversely affects corporate activities in light of faci litating trade and investment. This is due to the 
fact that the Australian tax law does not contai n any provision of the duration for retroactive 
corrective measures on transfer pricing.  WT/TPR/M/178/Add.1 
Page 152  
 
  Please explain the specific view regarding the negati ve effect on trade and investment caused by such 
transfer price taxation?  
 
Answer: 
 Australia’s transfer pricing rules are administer ed in accordance with th e internationally accepted 
arm’s length principle as described in the OECD’s  Guidelines for Multinational Enterprises and Tax 
Administrations.  Accordingly, Australia has transfer  pricing rules that are comparable to other OECD 
countries.   
The specific criticism that the Au stralian law does not “contain any provision of the duration for 
retroactive corrective measures on transfer pricing” re fers to the fact that there is currently no time 
limitation upon the ability of the Australian Taxa tion Office (ATO) to make a transfer pricing 
adjustment.  This recognises that the transfer pric ing cases involve complex tax affairs and significant 
revenue risk.  However, Australia’s interpretati on of the arm’s length principle is well documented 
and entities have scope to enter into Advance Pr icing Arrangements to provide greater certainty 
around their pricing practices.  Consequently, Australia does not consider that its transfer pricing rules 
adversely affect trade and investment.  Furthermore, in cases of double taxation arising from c onflicting laws or interpretations of tax treaty 
provisions, the ATO will seek to resolve the matte r under the Mutual Agreement Procedure provided 
in the Japan-Australia tax treaty. Australian a nd Japanese tax authorities have a good record of 
resolving cases of double taxation under the Mutual Agreement Procedure.  Very few cases have 
resulted in unrelieved double taxation. 
 
Question: 
 
Japan would like to be informed whether the Gove rnment of Australia has any plan to introduce a 
provision of the duration for retroactive corrective measures on transfer pricing.  
 
Answer: 
 The Australian Government has announced, as part of its Review of Self Assessment, a review to 
consider introducing fixed limitati on periods in place of unlimited assessment periods.  This review 
will encompass consideration of all instances invol ving unlimited assessment periods, including those 
applying in relation to the transfer pricing provisions.   
 
Production assistance
 
 Thailand:
 
 Question: (Paragraph 103) 
 
The Secretariat Report states that assistance to agriculture includes statutory marketing 
arrangements;  for example, the Productivity Commissi on estimated that $A 3 million was provided in 
2004/05 to rice marketing, and the domestic price of rice was maintained at higher levels than would 
otherwise prevail.  Could Australia please elaborat e in detail how the $A 3 million provided in 
2004/05 for rice marketing was utilized and also pr ovide examples of activities/measures used.  In 
addition, was the $A 3 million used to maintain the aforementioned high domestic price for rice?   WT/TPR/M/178/Add.1 
 Page 153 
 
 
  Answer:  
 
The Australian Government does not provide any subs idy or financial transfer to the Australian rice 
industry.  The $A 3 million quoted from the Produc tivity Commission’s Trade & Assistance Review 
2004-05 refers to an estimate by the Productivity Commission of the net econom ic benefit derived by 
the New South Wales (NSW) rice industry fro m current marketing arrangements.   
 
Competition and consumer policy  
 
Bolivia  
 
Question: (Paragraphs 106 and 123)  According to paragraph 106, government businesses co mpete with private firms on an equal footing, 
while paragraph 123 states that "they are required to substantially or fully cover their costs". 
 If government businesses do indeed compete with private firms on an equal footing, why does 
paragraph 123 state that the former are required to cover their costs fully or substantially? 
 Does this not suggest that government businesses receive a certain amount of government support, 
thereby contradicting what is stated in paragraph 106 of the Secretariat Report? 
 Answers: 
 
The Australian Government consider s paragraphs 106 and 123 are consis tent.  Paragraph 106 refers to 
the principle of competitive neutrality.  One requireme nt of the principle of competitive neutrality is 
that GTEs should, as noted in paragraph 123, cover th eir costs.  This is done by ensuring that the 
prices of their goods and services are at least suffi cient to earn the business activity a commercial rate 
of return overall and over a reasonable period of time.   By requiring a commercial rate of return, GTEs are placed on a comparable basis to private sector 
organisations, which also need to set prices that  take into account all relevant costs, including 
allowances for a commercial rate of return. 
 
Chinese Taipei:
 
 
Question: (Paragraph 105) 
 
One innovation of Australia’s National Competition Policy (NCP) was the system of annual competition payments, which were allocated over the period 1997/98 to 2005/06 by the 
Commonwealth to state and territory governments for their implementation of the reform.  
 
We would be interested in knowing more details of  the payments allocated over the said period, and 
in particular how the National Competition Coun cil decides on the funding level and measures the 
progress made?  Answer: 
 
The Agreement to Implement National Competition Policy and Related Reforms  (the Agreement) 
provided for the Australian Government to pay thr ee tranches of competition payments to States and 
Territories that implement specified competition a nd related reforms.  The first tranche of the WT/TPR/M/178/Add.1 
Page 154  
 
  competition payments commenced in 1997-98, and involved a maximum annua l payment of $A 200m 
(in 1994-95 prices).  The second tranche of the competition payments commenced in 1999-2000, and 
involved a maximum annual payment of $A 400m (in 1994-95 prices).  The third tranche of the competition payments commenced in 2001-02, and involved a maximum annua l payment of $A 600m 
(in 1994-95 prices).  The competition payments were distributed among the States and Territories on a 
per capita basis and indexed annually to maintain their real value over time. 
 The Agreement specified those obligations the Stat es and Territories must satisfy to receive (the 
maximum) competition payments.  Oblig ations tied to payments included: 
 
- giving effect to the Competition Policy Ag reement and, in particular, meeting the 
deadlines prescribed therein in relation to the review of regulations and competitive 
neutrality; and 
- fully implementing and continuing to fully observe all Council of Australian 
Governments (COAG) Agreements with rega rd to electricity, gas, water and road 
transport. 
 In November 2000, COAG agreed that the National Competition Council (NCC) would conduct annual assessments of State and Territory performance in regard to review and reform commitments 
and make recommendations on the level of competition payments to be received by each jurisdiction.  
When assessing the nature and level of any financial penalty or suspension, the NCC was required to 
take into account: 
 
- the extent of overall commitment to the implementation of NCP by the relevant 
jurisdiction; 
- the effect of one jurisdiction’s reform efforts on other jurisdictions; and 
- the impact of failure to und ertake a particular reform. 
 The Treasurer then determined the actual amount of  competition payments the States and Territories 
receive based on the NCC’s assessment and comments in response from the States and Territories.   
 The 2005 assessment by the NCC was the last ass essment under the current NCP arrangements. 
 
Question: 
(Paragraph 109)  
Under the Competition Policy Agreement, the Au stralian government undertook to review and reform 
legislation, and agreed that legislation should not  restrict competition unless it can be demonstrated 
that the benefits of the restriction to the community as a whole outweigh the costs.  
 Please could Australia elaborate further on exactly how it measures the costs and benefits that relate 
to the restriction?  
 
Answer: 
 
Each Commonwealth, State and Territory Government  is responsible for reviewing their respective 
legislation in line with the 'public interest test' set out under the National Competition Policy 
(NCP) agreements (1995).  This involves the guiding principle that legislation should not restrict 
competition unless it can be demonstrated that the be nefits to the community as a whole outweigh the 
costs; and that the objectives of the legislation can  only be achieved by restricting competition.   
  WT/TPR/M/178/Add.1 
 Page 155 
 
 
  The factors used to determine whether legislation is in the public interest are outlined in clause 1(3) of 
the NCP agreements.  They include (but are not limited to):   
- laws and policies relating to ecol ogically sustainable development;  
- social welfare and equity, including community service obligations;  
- laws and policies relating to matters such as occupational health and safety, industrial 
relations, access and equity;  
- economic and regional development, includi ng employment and investment growth;  
- the interests of consumers gene rally or a class of consumers;  
- the competitiveness of Australian business; and  
- the efficient allocation of resources. 
 
In 1999, the National Competition Council (NCC), in conjunction with the Centre for International 
Economics, published Guidelines for NCP Legislation Reviews.  It detailed a comprehensive approach 
to assessing costs and benefits across the ‘with legisl ation’ and ‘without legislation’ scenarios.  This 
approach is summarised in Appendix A. 
 The guidelines advocated that cost s across variables of the ‘with le gislation’ scenario be collected 
from official sources or stakeholders.  Costs acros s variables of the ‘without legislation’ scenario 
should be estimated from a variety of:  
- subjective assessments of key stakeholders; 
- international benchmarks; - accounting models; - engineering models; and - economic models. 
 
Benefits should consider measures of consumer and producer surplus-real GDP, consumption and 
their components.  Economic costs should account for direct and indirect costs, including externalities 
and whole economy macroeconomic charges, such  as interest or exchange rate changes. 
 Given the uncertainty of important  economic parameters it was suggested that sensitivity analysis be 
used to test the robustness of the benefit-to-cost r esults by varying parameters over their likely range. 
 In assessing governments' compliance with NCP legisl ation review requirements, the NCC looked for 
transparent, robust and objective reviews, because these increased th e likelihood of policy outcomes 
that are in the public interest.  The NCC also looked for governments to implement review 
recommendations expeditiously, unless a gover nment could demonstrate that review 
recommendations were not in the public interest. 
 
Question: 
(Paragraph 115) 
 The Report indicates that price surveillance may be  conducted informally or formally. Informal 
surveillance has been used to respond to consumers’ concerns in, in ter alia, insurance, petrol and 
bank fees and charges.   
Could Australia please explain the scope of the informal surveillance, and confirm whether or not 
there are any penalties invo lved in the process?  
 
Does the price surveillance exercise hav e any adverse effects on competition in relevant markets?   
 WT/TPR/M/178/Add.1 
Page 156  
 
  Answer: 
 
As informal surveillance is non-le gislative in nature, it involves no direct penalties.  However, 
information gathered through informal surveillance ca n be used by regulators to detect breaches of the 
law, which could lead to enforcement action and pena lties.  In contrast, the formal prices surveillance 
regime under Part VIIA of the Trade Practices Act  1974  provides for a range of offences for non-
compliance with various aspects of  formal prices surveillance. 
 Government policy does not support the use of formal  prices monitoring unless the market displays 
monopoly characteristics.  Prices surveillance, whic h includes formal prices monitoring, does not 
necessarily ensure lower prices.  Prices surveilla nce can only deter price increases that reflect the 
exercise of market power in ca ses where markets exhibit monopoly characteristics.  In competitive 
markets, prices surveillance can ha ve undesirable outcomes, such as facilitating price co-ordination, 
and creating an incentive for companies to charge a maximum notified price (rather than a lower one), 
which is of little or no benefit to consumers. 
 
Question: 
(Paragraphs 120 & 121)   
As far as Australia’s policies on consumer protecti on are concerned, which are mentioned briefly in 
the Report, we would be most interested in learning more about how the government addresses cross-
border consumer disputes, e.g. disputes be tween foreign consumers and Australian business 
operators, or between Australian c onsumers and foreign business operators? 
 Answer: 
 The Trade Practices Act 1974  (the TPA) is Australia’s princi pal piece of consumer protection 
legislation.  It generally relies on the cor porations power under para graph 51 (xx) of the 
Commonwealth constitution.  The consumer prot ection regime under the TPA includes both civil 
remedies (Part V) and criminal penalties (Part VC).  Section 6 of the TPA provides for the extended application of, inter alia , Parts V and VC.  It extends 
the application of the consumer protection law to  transactions involving trade or commerce between 
Australia and places outside Australia.  Essentially, such conduct will have the requisite territorial 
nexus to be heard in an Australian court.  Section 5 of the TPA also extends the application of Parts V and VC of the TPA.  By virtue of this 
section, these provisions will apply where the party e ngaging in the conduct is an Australian citizen, a 
person ordinarily resident in Australia, an Australia n incorporated entity or a body corporate carrying 
on business in Australia.  The inclusion of bodies corporate carrying on busine ss in Australia is intended to broaden the scope 
of the provisions considerably.  It includes ove rseas businesses carrying on a business in Australia 
through a branch.  However, th e question of whether a corpora tion ‘carrying on a business’ in 
Australia depends on the facts of the individual case.  In some circumstances Ministerial consent is requi red before the extended application provisions may 
be relied upon.  The Minister is required to give consent unless the law of the country in which the 
conduct was engaged in required or specifically authorised the conduct; and it is not in the national 
interest that the consent be given.  It should also be noted that, in some cases, the cons umer protection laws (including the extraterritorial 
provisions) will apply to entities other than bodies co rporate.  For example, the consumer protection  WT/TPR/M/178/Add.1 
 Page 157 
 
 
  laws will apply to unincorporated entities (such as  natural persons) where they involve the use of 
postal, telegraphic or telephonic services or takes pl ace in a radio or television broadcast.  Telephonic 
services have been interpreted to include, fo r example, representations made via a website. 
 The Australian Competition and Consumer Commission (ACCC) is an independent statutory 
authority responsible for administering the TPA.  Each year it receives a number of complaints of 
scams or other conduct which involve overseas busin esses.  The ACCC general approach is to warn 
consumers about potential issues associated with dealing with overseas businesses, through initiatives 
such as the ‘ScamWatch’ website, www.scamwatch. gov.au, as well as the e-consumer site which 
deals with complaints regarding on line commerce, www.econsumer.gov.  
 
The ACCC also participates in the annual ‘interne t sweep day’, coordinated through the International 
Consumer Protection Enfo rcement Network (ICPEN). 
 Examples of action taken by the ACCC against inte rnational businesses for contraventions of the 
consumer protection provisions include: 
 
- Worldplay services – This case involved a pyramid selling scheme, control of which 
was dispersed over a number of countries.  Worldplay operated out of Australia and provided administrative and IT support servi ces to the scheme.  The scheme targeted 
consumers from countries including Canada, the UK and Norway. 
- IT & T AG – This case involved a Swiss company that targeted Australian businesses 
by seeking payment for entries in their international fax directory, when those businesses had not in fact agreed to pay for those services.  
- InterNIC – InterNIC was a facility operate d by Domain Name Solutions on contract 
with the United States Government.  The defendants in this c ase operated a website 
with a very similar domain name.  The fee charged by the respondents was between 
$US 220 and $US 250.  The fee charged by  InterNIC has ranged between $US 70 and 
$US 100.  The respondents registered domai n names to consumers from all over the 
world including Australia, the US, Cana da, France, Norway, Spain, the United 
Kingdom; Switzerland and Germany.  The ACCC secured a payment by the defendant of $A 250 000 into a fund that would be used to compensate affected 
consumers. 
 
Japan:
 
 
Question: (Paragraphs 109-114) 
 
We understand that Australia is currently preparing the next review of the Trade Practices Act (TPA), 
such as introduction of criminal sanctions for cartel  activity. Could Australia explain the contents of 
the next review, the progress of the delib eration and the prospects for its adoption? 
 Answer: 
 
Australia is not currently preparing another review of the Trade Practices Act  1974 .  The 2003 Review 
of the Competition Provisions of the Trade Practices Act  (Dawson Review) recommended the 
introduction of criminal penalties for serious cartel conduct, but identified difficulties with finding a 
satisfactory definition for criminal cartel conduct a nd maintaining an effective leniency policy for 
cartel whistleblowers.  The Australian Governme nt accepted the Dawson Review's recommendation 
in principle and has developed legislation introdu cing criminal penalties.  The Government will 
introduce the legislation into Parliament in the near future.   WT/TPR/M/178/Add.1 
Page 158  
 
  The proposed criminal cartel offence will prohibit a person from making or giving effect to a contract, 
arrangement or understanding between competitors that  contains a provision to fix prices, restrict 
output, divide markets or rig bids, where the contra ct, arrangement or understa nding is made or given 
effect to with the intention of dishonestly obtai ning a gain from customers who fall victim to the 
cartel.  The maximum penalties for the offence will be a term of imprisonment of five years and a fine 
of $A 220,000 for individu als, and a fine for corporations that is the greater of $A 10 million or three 
times the value of the benefit from the cartel, or wh ere the value cannot be determined, 10 per cent of 
annual turnover.  Questions (Paragraph 119)   
Concerning the report on cooperation arrangements between the ACCC (Australian Competition and 
Consumer Commission) and other foreign agencies in paragraph 119, Japan understands that the 
ACCC has cooperation agreements on anticompetitive activities with corresponding agencies of 
several countries such as United States and New Zealand. 
 Could Australia explain the contents of such  cooperation agreements and how they are working now?  
 
Answer: 
 
Australia, through the Australian Competition and Consumer Commission (ACCC) places great 
importance on cooperation agreements which are used to promote cooperation and coordination 
between counterpart agencies.  The ongoing exch ange of information and cooperation enables each 
agency to be more efficient and effective as we ll as lessen the possibility of differences in the 
application of competition laws administered by th e agencies where the diffe rences are not the result 
of statutory provision.  
The cooperation arrangements commonly contain the following types of provisions: 
 
- notification of cases / investigations by one party that may affect the interests of the 
other party/ies; 
- information exchange in relation to ca ses, investigations, complaints, company 
information, industry studies, research reports etc; 
- enforcement assistance on cases of common interest; and 
- mechanisms for providing capacity building or technical assistance. 
 Some of the arrangements also establish a mechanism for the exchange of staff between the agencies.  
Recent exchanges include Chinese Taipei, Canada  and the UK occurring in 2006 and New Zealand 
currently in place throughout 2007. 
 Examples of enforcement assistance that has take n place through cooperation agreements includes the 
preparation of witness statements, conducting of fo rmal interviews and obtaining information and 
documents on behalf of the other agency.  In rela tion to information sharing, in the financial year 
2005/2006 the ACCC receive d 82 requests from counterpart agencies in relation to both competition 
and consumer issues.  63 per cent of these requ ests were from agencies with which the ACCC has 
cooperation arrangements.  One of the latest co-operation agreements is the ACCC protocol with the New Zealand Commerce 
Commission on merger investigations, signed in July 2006.  The protocol sets out agency 
responsibilities and the mechanisms for cooperation.  Under the protocol the agencies will endeavour 
to synchronise merger reviews where possible; to share information on the parties in the merger and 
any other relevant third parties (subject to confid entiality); to share agen cy analysis and assessments  WT/TPR/M/178/Add.1 
 Page 159 
 
 
  of transactions; and, from time to time to gather information on behalf of the other agency.  The 
protocol builds on practices which were alread y routinely employed by both agencies. 
 Cross border or trans-national cooperation plays an important role in Australia’s enforcement of 
competition laws as many problems currently tran scend national boundaries such as cartels, restrictive 
practices in air and sea transport and mergers i nvolving international co rporations.  The ACCC 
increasingly relies on various forms of informat ion from counterpart agencies where agency 
agreements provide one such mech anism for this increased cooperation and coordination.  The use of 
cooperation agreements will conti nue to develop in terms of importance as being an effective 
enforcement tool for counterpart agencies.   Question: (Paragraphs 111, 116-118, 37 and 41)  
Could Australia explain how the th ird party access to essential infrastr ucture facilities, i.e. electricity 
networks, telecommunication networks and facilities,  natural gas pipelines, and water resources, is 
secured and allocated?  
Answer:  
National Access Regime 
 
 The National Access Regime is  a regulatory framework established under Part IIIA of the Trade 
Practices Act 1974 (TPA) that allows third parties to seek access to services of certain nationally-
significant infrastructure facilities - such as rail facilities, port facilities and water networks - on 
reasonable terms and conditions, where commercial negotiations have failed.   Among other things, 
the National Access Regime is intended to promote:  
- more efficient investment in and operation of essential infrastructure;  and 
- effective competition in upst ream and downstream markets. 
 
Access to infrastructure may be granted where specific criteria set out in Part IIIA of the TPA are met.  
These include:  
- that access to the service would promote competition in at least one other  market; 
- that it would be uneconomical for anyone to  develop another facility to provide the  
service; 
- that the facility is of national significance; - that access to the service is not already the subject of an effective access regime; and 
- that access (or incr eased access) to the service would not be contrary to the public 
interest. 
 Access determinations are made by the relevant  Minister on the recommendation of the National 
Competition Council (NCC).  In addition, the TPA gives the NCC discretion to recommend that the 
service not be declared if it considers the applica tion was not made in good faith or where it would be 
economical for  anyone to develop another fac ility that could provide part of the service. 
 Access to energy infrastructure in Australia
 
 Access to energy infrastructure in Australia is subj ect to the overarching framework of Part IIIA of 
the TPA.  Access to energy infrastructure may be grante d where specific criteria set out in Part IIIA of 
the TPA are met (see above).   WT/TPR/M/178/Add.1 
Page 160  
 
  In addition to Part IIIA of the TPA, energy businesses are subject to sector specific legislation, which 
determines the terms on which access is granted and on which those businesses operate.  The terms on 
which access is granted to electricity infrastruct ure are governed by the National Electricity Law 
(NEL) and the National Electricity Rules.  These laws apply to the National Electricity Market (NEM), which covers electricity networks in New South Wales, Queensland, South Australia, 
Tasmania, Victoria and the Australian Capital  Territory.  Western Australia and the Northern 
Territory are not part of the NEM and have their ow n regulatory regimes, but they remain subject to 
the overarching Part IIIA framework for access to el ectricity infrastructure.  The terms on which 
access is granted to gas pipelines infrastructure are currently governed by the Gas Pipelines Access 
Law (GPAL).  The Code applies to all Australian jurisdictions.  
 
A major energy market reform process is currently underway, to  enhance regulation on a national 
basis.  This process was agreed to by the Commonwealth, State a nd Territory Governments in the 
Australian Energy Market Agreement 2004 .  The NEL and National Electricity Rules are currently 
being amended to improve their effectiveness.  The GPAL is in the process of being replaced by a 
new National Gas Law and National Gas Rules. 
 The Australian Energy Regulator was set up in 2005 to act as a national economic regulator for 
energy markets, although not all powers have yet been  transferred to it by the States and Territories.  
A new national rule-maker – the Australian Energy  Market Commission – was also set up in 2005 to 
determine rule changes under the reform ed National Electricity and Gas Laws. 
 
Telecommunications
 
 The Australian telecommunications regulatory fra mework encourages market-driven solutions and 
promotes industry self-regulation to the greatest possible extent.  Telecommunications specific 
competition regulations complement the general co mpetition laws in Parts IIIA (access to services) 
and IV (restrictive trade practices) of the TPA.  The access regime contained in Part XIC of the TPA encourages efficient investment in competitive infrastructure and services between as many service 
providers as possible.    Regulated access to a particular service provided by  another telecommunicati ons provider through its 
infrastructure can be obtained if the Australia n Competition and Consumer Commission (ACCC) 
‘declares’ the service.  Before it declares a service,  the ACCC has to be satisfied that requiring the 
facility owner to allow its competitors to have acces s to the service is in the ‘long-term interest of 
end-users (LTIE)’.  In determining whether access is in the long-term interest of end-users, the ACCC 
is obliged to take into account the objectives of promoting competition, any-to-any connectivity 
between networks, and efficient use of and investment  in telecommunications infrastructure.  To assist 
the ACCC’s consideration of whether a declaration is  in the LTIE it is required to undertake a public 
consultation.  Once a service is declared by the ACCC, the acce ss regime encourages the access seeker and the 
access provider to engage in commercial negotiations  to determine the terms and conditions of the 
supply of the service.  If commercial negotiations ar e not successful either party can apply to the 
ACCC to arbitrate the dispute.  Access prices arbitrated by the ACCC are fair a nd reasonable to access providers and access seekers, 
and take into account , inter alia, the provider’s costs, need for investment incentives and risks. 
  WT/TPR/M/178/Add.1 
 Page 161 
 
 
  Malaysia  
 Question:  How does ‘annual competition payments’ facilitate reform? 
 
Answer: 
 
Between 1997-98 and 2005-06, the Australian Government made competition payments to the 
Australian States and Territories.  An important feature of the National Competition Policy (NCP) 
institutional framework, these payments were fo r satisfactory progress made by the States and 
Territories in implementing their NC P and related reform obligations. 
 The payments recognised that, although the Stat es and Territories were responsible for significant 
elements of NCP, much of the direct financia l return accrued to the Australian Government via 
increases in taxation revenue, due to greater economic activity. 
 The Agreement to Implement National Competition Policy and Related Reforms  (the Agreement) 
provided for the Australian Government to pay thr ee tranches of competition payments to States and 
Territories that implemented specified competition and related reforms.  Obligations tied to payments 
included: 
 
- giving effect to the Competition Policy Ag reement and, in particular, meeting the 
deadlines prescribed in that Agreement and in relation to the review of regulations 
and competitive neutrality; and 
- fully implementing and continuing to fully observe all Council of Australian 
Governments (COAG) Agreements with rega rd to electricity, gas, water and road 
transport. 
 
When assessing the nature and level of any financia l penalty or suspension, the National Competition 
Council (NCC) was required to take into account:  
- the extent of overall commitment to the implementation of NCP by the relevant 
jurisdiction; 
- the effect of one jurisdiction’s reform efforts on other jurisdictions; and - the impact of failure to und ertake a particular reform. 
 
The Treasurer then determined the actual amount of  competition payments the States and Territories 
received based on the NCC’s assessment and comment s in response from the States and Territories. 
 
Question: 
 What is the basis for allowing exemption to the TPA on international liner cargo shipping and export 
contracts? 
 Answer: 
 
Part X of the of the Trade Practices Act 1974  (TPA) provides international cargo shipping with an 
exemption from the general provisions of the Act.  It was introduced as a me chanism to ensure the 
efficient supply of liner cargo shipping services, on th e basis that collusive agreements between ocean 
carriers was necessary to prevent market instability,  and that benefits would be provided by the 
coordination of operations, spreading of risk, econom ies of scale and reduction of costs of obtaining 
regulatory approval for agreements. WT/TPR/M/178/Add.1 
Page 162  
 
  A review of Part X in 2004-05 recommended that th e exemption be abolished, but also recommended 
a number of amendments should it be retained.  In  mid-2006, the Australian Government announced it 
would retain and amend Part X to promote competi tive reform of the liner cargo shipping sector in 
Australia.  As recommended by the review, the Gove rnment will amend Part X to remove discussion 
agreements (which provide the greatest anti-comp etitive risk) from its scope, protect individual 
confidential service contracts between carriers and shippers and introduce a range of penalties for 
breaches of its procedural provisions.  The Governme nt considers that the amendments will ensure 
that Australian exporters and importe rs in all jurisdictions have st able access to high quality liner 
cargo shipping services of adequate capacity, frequenc y and reliability, and that a range of ports are 
served at freight rates that are internationally competitive. 
  
Question: 
 Anti-competitive behaviour is allowed on case-by-cas e basis: Can Australia provide example of the 
cases? 
 
Answer: 
 
Under section 51(2)(g) of the Trade Practices Act 1974  (TPA), a provision of an export agreement 
that is notified to the Australian Competition and Consumer Commission (ACCC) may receive 
exemption from the anticompetitive conduct provisions in  Part IV of the TPA.  The arrangement must 
relate exclusively to the export of goods from Aust ralia or to the supply of services outside Australia, 
and particulars must be submitted to the ACCC w ithin 14 days of arriving at the arrangement. 
 The ACCC records the information pr ovided by notified export agreements on a register which is not 
open to the public.  This information may be obtained by the Treasurer or a court.  It is the decision of 
the ACCC whether to register a provision of an expo rt agreement.  However, it has been suggested 
that some provisions which may be covered include:   
- exclusivity provisions between an Au stralian exporter and Australian upstream 
supplier, where the exporter is the sole exporter for the supplier;  
- exclusivity provisions between an Austra lian exporter and foreign distributor, where 
the distributor is the exclusive distributor for the exporter; and  
- a provision in an export agreement relating to the movement of goods from the point 
of manufacture to the point of departure from Australia. 
 
Question: 
To what extent does Australia manage the probl em of asymmetric information in the market? 
Answer: 
The Australian Government recognises that businesses will often have more information about their 
goods or services than their consumers.  The consumer protection provisions of the Trade Practices 
Act 1974  (TPA) attempt to address this issue, prim arily by prohibiting misleading or deceptive 
conduct, or false or misleading representations.  Th e TPA also has some additional requirements in 
relation to defective or unsafe goods. 
In general, there is no obligation under the TPA for businesses to actively disclose any particular 
matters.  However, the TPA requires that any info rmation about goods or services that is provided 
must be accurate. 
Section 52 of the TPA prohibits conduct that is misleading or deceptive, or likely to mislead or 
deceive.  In some circumstances, a failure to discl ose information will be misleading or deceptive, if  WT/TPR/M/178/Add.1 
 Page 163 
 
 
  there were circumstances in which it was reasonable for the consumer to expect that the information 
would be disclosed. 
The TPA also prohibits false or misleading representa tions with respect to certain matters, such as 
- price; 
- country of origin; - the performance characteristics of a good; and - the sale of land. 
 
It also prohibits certain marketing practices out right, such as pyramid selling; referral selling; 
demanding payment for unsolicited goods; or using undue  harassment and coercion in relation to the 
supply of or payment for goods or services. 
Two areas in which the TPA does impose specific obligations aimed at redressing information 
asymmetry are in relation to warranties and refunds; and product safety. 
As noted above, consumers will often not be able to judge the future performance characteristics of a 
particular product in the same way as the busin ess selling those goods or services.  In relation to 
warranties and refunds, the TPA has the effect of incorporating certain minimum standards into any 
agreement for the sale of consumer goods (the ‘implie d terms’).  Broadly, these terms provide that a 
consumer will be entitled to compensation if they purchase goods that:  
- are not of merchantable quality (i.e. a basi c level of quality that  would be reasonable 
to expect); 
- are unfit for any purpose the consumer made known to the seller, or can be inferred 
from the type of goods;  
- don't match any description given of the goods (this would include corresponding 
with a photograph of the good); or  
- are not free from defects. 
 For services, they should be rendered with due car e and skill and be reasonably fit to achieve the 
purpose specified.   If the product does not meet these standards, the consumer is entitled to compensation—a refund, 
repair or replacement, depending on what is reasonable in the circumstances. 
 The TPA also addresses information asymmetry in the market for consumer goods through the product safety regime.  The product safety regime enab les the relevant Minister to make regulations 
which 
- ban the product completely; 
- require certain products to comply with specified safety standards; or - require the product to be labelled with certain  information to reduce the risk of injury 
to consumers. 
 
Finally, it should be noted that additional disclosure regimes apply to the provision of certain financial 
services.  Financial services regulations are administered by the Australian Securities and Investments 
Commission (ASIC).  
Question: 
 
The efficiency of supply of consumer product depend s on the efficacy of logistic support; how does 
Australia ensure this?  WT/TPR/M/178/Add.1 
Page 164  
 
  Answer: 
 
In Australia, the market provides for the supply of consumer products.  Governments do not generally 
intervene in the provision of these services - eith er between businesses, or between businesses and 
consumers - unless it considers that intervention is necessary to address market failure.  The preferred 
approach is to provide a regulatory framewo rk that promotes well-functioning markets. 
 One of the key regulatory instruments for improving the operation of markets is the Trade Practices 
Act 1974 (TPA).  The TPA seeks to enhance welfare by  promoting competition and fair trading, and 
providing for consumer protection.  It prohibits  conduct such as anti-competitive agreements, or 
mergers which are likely to have the effect of  substantially lessening competition in a market. 
 Also, in recognition that certain infrastructure fac ilities that provide services essential to the supply of 
products exhibit natural monopoly characteristics (e .g. energy, rail, telecommunications), the TPA 
and some State legislative regimes include provisions that regulate third party access to those services 
where it would promote competition in a related market.  The objective of access regulation is to 
enable third parties to gain access to the services on competitive terms while encouraging investment 
in the infrastructure—promoting efficient use of, and investment in, major infrastructure. 
 At the Commonwealth level, the TPA includes both general and sector-specific access regimes.  The 
general ‘National Access Regime’, found in Part  IIIA, applies only to those facilities which are 
deemed to be of ‘national significance’. 
 Examples of infrastructure that is or has been subject to some form of access regulation or prices surveillance, either directly or indirectly, include:  
- ports; 
- airports; - container stevedoring; - rail lines; - electricity transmission; - gas transmission; and 
- telecommunications. 
 
Question: 
 Price surveillance act 1983: 
 
Does this act provide power in controlling excessive profiteering?  Answer: 
 
The Productivity Commission (PC) reviewed the Prices Surveillance Act 1983  (PSA) in 2001.  This 
report made several findings and recommendations wh ich included recognition that prices oversight is 
now seen as part of competition policy, focusing on pricing by firms with substantial market power in important markets, rather than as part of a prices and incomes policy.  The PC recommended that the PSA be repealed and limited new inquiry and monitoring functions be 
written into the Trade Practices Act 1974  (TPA).  I t also recommended that the new Part of the TPA 
(Part VIIA) include an objects clause that prices su rveillance will only be applied in those markets 
where competitive pressures are not su fficient to achieve efficient prices and protect consumers.  The 
Government supported the majority of the PC recommendations and has repealed the PSA and  WT/TPR/M/178/Add.1 
 Page 165 
 
 
  incorporated price restriction provisions a nd oversight powers into the TPA through the Trade 
Practices Legislation Amendments Act 2003 . 
 Part VIIA of the TPA provides the Treasurer with  powers to direct the ACCC to undertake three 
forms of prices surveillance:  formal prices monito ring, inquiry under the TPA, and prices notification 
under the TPA (described below). 
 
Question: 
 How does Australia overcome the is sues of “price controls tend to distort market outcomes” and 
“relaxing price controls could le ad to inefficiently high prices”? 
 Answer: 
 
Section 95E of Part VIIA of the Trade Practices Act 1974  (TPA) provides that the object of the Part is 
to have prices surveillance applied only in t hose markets where competitive pressures are not 
sufficient to achieve efficient prices and protect c onsumers.  This is because prices surveillance, 
which includes formal prices monitoring, does not necessarily ensure lower prices.  Prices 
surveillance can only deter price increases that refl ect the exercise of market power in cases where 
markets exhibit monopoly characteristics.  Question:  How does Australia undertake fo rmal price surveillance? 
 
Answer: 
 
Since 2003, Part VIIA of the Trade Practices Act 1974  (TPA) has provided the Treasurer with powers 
to direct the Australian Competition and Consumer  Commission (ACCC) to undertake three forms of 
prices surveillance:  
- Formal prices monitoring – The Treasurer may direct that the ACCC monitor and 
report on prices, costs and profits in an industry, or of certain ‘people’.  There are no 
limits on the duration of monitoring or frequency of reporting.  The Treasurer must make any reports publicly available on receipt. 
- Inquiry under the TPA –  The Treasurer may choose to conduct an inquiry into 
prices in a service or industry.  The Treasu rer may also specify certain companies, 
and these companies may not increase prices during the inquiry period without 
ACCC approval. 
- Prices notification under the TPA –  The Treasurer may ‘declare’ goods or services 
and other companies who supply these goods or services.  These companies must then notify the ACCC of proposed price incr eases in respect of the notified good or 
service.  The ACCC may approve a proposed (or smaller) price increase within 21 
days.  The ACCC’s determination is not enforceable, but a penalty applies for 
increasing prices during the prescribed 21-day period unless the ACCC has agreed to the price increase.  Initially, the maximum pr ice a company may charge is the highest 
price it has charged for a similar product in the previous 12 months. 
 
Question:  How Australia undertakes informal surveillance in the insurance, petrol, and bank fees and charges 
and what kind of actions can be ta ken against non-compliance activities? 
 WT/TPR/M/178/Add.1 
Page 166  
 
  Answer: 
 
There is no legislative process for informal mon itoring and it assumes co-operation from industry.  
Formal monitoring requires the relevant Minister to make a direction to the Australian Competition 
and Consumer Commission (ACCC) under the Trade Practices Act 1974  (TPA).  It can be used in 
cases where industry is unwilling to cooperate with the ACCC. 
 There are penalties attached to non-compliance under the formal system.  The ACCC has authority to 
obtain information under the TPA.  Should participants  in the industry not comply with information 
requests or provide false or misleading information, they would be committing an offence that could 
be subject to a penalty (Part VIIA, section 95ZK). 
 Under informal monitoring, there is no require ment for the ACCC to report results.  Formal 
monitoring requires the ACCC to release the report publicly as soon as practicable after providing a 
copy to the Minister. 
 
Insurance
 
 The ACCC informally monitors medical indemnity insurance premiums, and has done so since 2002. 
 This involves the ACCC asking medical inde mnity insurers for qualitative and quantitative 
information, so that it can assess (and subsequently  report on) whether premiums are actuarially and 
commercially justified in each Australian jurisdictio n.  The industry is cooperative in providing this 
information on a commercial-in-confidence basis.  The ACCC informally monitored public liability  and professional indemnity insurance premiums 
from 2002 until 2005, but the Australian Government susp ended this monitoring in light of the more 
comprehensive data now available from the National Claims and Policies Database, administered by 
the Australian Prudential Regulation Authority.  Because monitoring of these products is/has been informal, any non-compliance by industry would 
not have resulted in action being taken by regulator s against individual businesses.  This is because 
informal monitoring requires cooperation from industr y participants, which has been forthcoming in 
the case of insurers.  If the insurance industry was to be uncooperative in the future, then presumably 
the ACCC could undertake formal price monitoring of premiums (which would then impose penalties 
on insurers for non-compliance), but to  date this has not been necessary. 
 
Petrol
 
 
The ACCC currently undertakes informal price monito ring, which is used to provide information to 
consumers (through its publications  and its website) and assist the ACCC in its enforcement of the 
TPA if there is evidence of anti-competitive behaviou r.  The ACCC informally monitors petrol, diesel 
and automotive liquefied petroleum gas prices at ar ound 3,600 of the approximately 6,500 retail fuel 
sites across Australia (just over 55 per cent).  Appr oximately one quarter of sites monitored are in 
rural or regional areas.  The ACCC recently extend ed its monitoring to include ethanol blended fuel 
(E10).  On 24 January 2007, the ACCC released the first E10 Petrol Price Monitoring Report .  The 
ACCC can also conduct additional ra ndom monitoring in remote areas, and investigates complaints 
about price changes. 
 
Bank fees and charges  
 ASIC is the consumer protection regulator for financ ial services.  In this role, it protects investors, 
superannuants, depositors and insu rance policy holders. Consumer protection regulation for these 
products includes:   WT/TPR/M/178/Add.1 
 Page 167 
 
 
   
- requirements about the information that mu st be disclosed to consumers about these 
products;  
- general prohibitions against misleadi ng or deceptive conduct and other unfair 
practices;  
- licensing of people who give advice on or  are dealing in financial products;   
- requirements for conduct of financial services providers; and  - approval of alternative dispute schemes and industry codes. 
 ASIC does not have responsibility for the level of fees and charges imposed by financial services 
providers (as distinct from disclosure of these fees and charges).  The ACCC has responsibility for the 
level of fees and charges for financial services.   While the ACCC cannot set or regulate interest rat es or fees charged by these institutions, it does 
maintain an informal oversight of bank fees and charges.  The ACCC would be responsible for 
investigating any complaints rega rding alleged breaches of the TPA.  
 
Peru:
 
 Question:  
Australian legislation provides for two price surv eillance mechanisms:  formal surveillance, and 
informal surveillance.  Although the former is c onducted chiefly for information purposes (price 
enquiries, price notification, and price monitoring)  and does not involve any legislative process, the 
latter appears to involve strict price cont rol and possible penalties for non-compliance. 
 
Considering the trend towards deregulation, why do es Australia exercise pric e surveillance when this 
is something that should only be done exceptionally, as in the case of natural monopolies or in the 
absence of proper conditions for competition? 
 
Answer: 
 Australia does not generally exercise pric es surveillance unless there are exceptional 
circumstances, such as wh ere the market displays monopoly characteristics.  It is Government policy 
that formal prices surveillance can only deter price increases that reflect the exercise of market power 
in cases where markets exhibit monopoly characteris tics.  Prices surveillance in competitive markets 
can have undesirable outcomes and actually lead to price increases.  
  
Informal price monitoring is carried out by the Australian Competition and Consumer Commission 
(ACCC) in some situations.  While informal monitoring does not i nvolve penalties for non-
compliance, if it results in the detection of a breach of the Trade Practices Act 1974  (TPA) penalties 
can be imposed as for other contraventions of the TPA. 
 
Question: 
 The Secretariat Report states that:  " … restricti ons on cartels originating from abroad are stricter 
than on cartels formed by domestic exporters."    
There is a danger, in the interna tional trade environment, of a particular country adopting business 
practices whose anti-competitive effects are felt in  the market of another country – exporter cartels 
for example – causing prejudice to consumers and business in that country (so-called cross border 
practices).  In any case, cartels involve a distortion of free price formation, so that the severity of the WT/TPR/M/178/Add.1 
Page 168  
 
  mechanisms applied by the competition authorities to counter such practices should be equal in all 
cases.  Could Australia explain what the restrictions on cartels from abroad are, and what measures have 
been taken to ensure that  the cartels do not distort free price formation? 
 
Answer: 
 
Australia's export exemption in s51(2)(g) of the Trade Practices Act 1974  (TPA) only applies to 
certain export agreements and requires notification of  the agreement.  The arrangement must relate 
exclusively to the export of goods from Australia, or to the supply of services outside Australia, 
provided that full particulars are submitted to the Australian Competition and Consumer Commission 
(ACCC) within 14 days of the a rrangement being arrived at.  
  Most OECD countries exempt export agreements fr om competition regulation.  A key objective of 
such exemptions, including Australia's exemption,  is to facilitate Australian exports of goods and 
services.  Australia's export exemption places Austra lian exporters on an equa l footing with foreign 
exporters who enjoy the same immunity from their national competition laws.  
  Australia also notes that past OECD surveys have indicated that there are only a few global markets 
where a group of national producers in a cartel will be  able to raise international prices significantly. 
 Question:  The Report states that with regard to consumer prot ection, the chief regulatory measures taken by the 
Australian Competition and Consumer Commissi on (ACCC) include the following areas: 
 
- Misleading and deceptive conduct; - pyramid selling; - breaches of the product safety/liability prov isions of the Trade Practices Act (TPA); 
- harassment and coercion; - unsolicited goods; 
- price exploitation. 
 
The regulations introduced by Au stralia in respect of pyramid selli ng are worth highlighting.  Peru 
would be interested in knowing what results were achieved through these regulations.  
Answer:  
Part V, Division 1AAA of the Trade Practices Act  (TPA) prohibits pyramid selling.  It defines 
pyramid selling and a number of related concepts.  Section 65AAD defines pyramid selling.  The two 
key concepts under the definition are:  
- the requirement for a ‘participation payment’ – that is, to take part in the scheme, new 
participants make a payment to another par ticipant or participants in the scheme; and 
- these ‘participation payments’ are induced by  the prospect that new participants will 
be entitled to a “recruitment payment” when  they introduce new participants to the 
scheme. 
 
Under this definition, a scheme will be a pyramid scheme regardless of whether it also involves the 
marketing of goods and services, if the substantial in ducement for joining is the opportunity to receive 
payments by recruiting new members to the scheme.   WT/TPR/M/178/Add.1 
 Page 169 
 
 
  It is also important to note that section 65AAC pr ohibits ‘participation’ in a pyramid selling scheme – 
a corporation, and in some cases an individual, w ill be liable for participating in or promoting a 
pyramid selling scheme, or one element of the scheme, even if they are not controlling the scheme more broadly.  
However, section 65AAE provides that if a scheme involves the marketing of goods, the question of 
whether it is a pyramid scheme depends on:  
a) whether the participation payments bear a ‘re asonable relationship’ to the value of the 
goods being provided in exchange for the payment; and 
b) the emphasis given, in promotion of the sch eme, to the entitlement to those goods and 
services, compared to the emphasis pl aced on the entitlement to ‘recruitment 
payments’. 
 Some examples of actions by the Australian Competition and Consumer Commission (ACCC) against 
pyramid selling include: 
 
- SkyBiz – SkyBiz was a US based compan y that promoted a home business scheme.  
Participants paid SkyBiz.Com Inc $US 100 for a website in order to take part in the 
scheme.  SkyBiz claimed participants could then earn a substantial income for introducing new consumers into the scheme.  The Federal Court granted orders by 
consent declaring that SkyBiz had br eached the TPA.  The US Federal Trade 
Commission (FTC) subsequently secured $A 20 million from SkyBiz, which it used to establish a compensation fund. 
 
- Worldplay services - Worldplay Services wa s an Australian company that provided 
administrative, IT support and member support services to an international pyramid 
selling scheme.  The scheme was fragmented,  with a company in the British Virgin 
Islands having overall control, and servi ce companies contributing to the scheme 
operating from Britain, Gibraltar, the Neth erlands Antilles and Australia.  Consumers 
recruited into the scheme came from a num ber of countries, including Canada, the 
United Kingdom and Norway.  The Federal C ourt of Australia held that the company 
had breached the TPA by participating in a pyramid selling scheme and also found 
that one of its directors was knowingly concerned in the contravention. 
 
- 1Cellnet - 1Cellnet established and prom oted a scheme on the Internet in which 
participants make a payment to 1Cellnet and are able to earn income from the 
1Cellnet Global Bonus Points (GBP) sche me.  The ACCC alleged that the payment 
was induced by the prospect held out to ne w participants that they would be entitled 
to payments under the scheme in relation to  the introduction to the 1Cellnet scheme 
of further members.  The Federal Court of Australia granted orders, by consent, restraining 1Cellnet from establishing, pr omoting, taking part in or otherwise 
participating in, or inducing any person to  establish, promote, take part in or 
otherwise participate in the 1Cellnet Scheme, or any scheme structured in the same 
way. 
 
Question:  
As regards the so-called "harassment and coerci on", could Australia please explain how it has 
regulated such practices?  What would be the difference between these harassment and coercion 
practices and the so-called "unsolicited goods";  indeed , other legislative models, including that of 
Peru, consider unsolicited goods to be a form of coercive trade practice. 
 WT/TPR/M/178/Add.1 
Page 170  
 
  Answer: 
 
Harassment and coercion is prohibited under s.60 of the Trade Practices Act 1974  (TPA).  Asserting 
payment for unsolicited goods is prohibited under s.64.  Asserting a right to payment for unsolicited 
goods may be distinguished from harassment and coercion on the basis that the former does not 
require any undue harassment or threat of physical  force – it merely requires that a demand be made 
for payment where the person making the demand is not entitled to do so.  Further details on each provision, and case examples, are included below.  
 
Harassment and coercion – s.60
 
 Section 60 of the TPA prohibits the use of physical force or undue harassment or coercion in connection with the supply, or possible supply, of goods or services to a consumer, or in connection 
with the payment for goods or services by a consum er.  The prohibition on harassment and coercion 
has proven particularly relevant in relation to debt collection practices.  Case examples are: 
 
- Cash Return – The Australian Competition and Consumer Commission (ACCC) took 
action against Cash Return Mercantile Pt y Ltd (Cash Return), a debt collection 
agency, and its former agent, alleging that the company had engaged in undue 
harassment, coercion and misleading conduct while collecting debts from consumers.  
The Federal Court found that the agent a nd Cash Return had made an excessive 
number of telephone calls to debtors; adopt ed a threatening, aggressive and abusive 
manner in those telephone calls; and misled debtors and others about debt recovery 
procedures and the consequences of non payment of debts. 
 
- Esanda Finance - Esanda Finance Corpora tion Ltd was ordered to pay a customer and 
his wife $A 20,000 compensation after the Federal Court declared it acted unconscionably and used undue harassment wh en its debt collectors and tow truck 
operators entered the customer's home a nd pinned him to the ground while they re-
possessed a car. 
 
Unsolicited goods – ss. 64 – 65.
 
 Section 65 of the TPA clarifies the rights and obligations of a person who receives goods that they did not specifically request (‘unsolicited goods’).  Essentially, it provides that 
 
- the recipient of the goods is not liable to pay for the goods; and 
- the recipient is not liable for damage sust ained to the goods while in their possession 
(unless they deliberately damaged the goods). 
 Section 65 also sets out the requirements for the retu rn of the goods, and the circumstances in which 
possession of the goods will transfer to the recipient. 
 
Section 64 prohibits businesses from asserting a righ t to payment for unsolicited goods.  Asserting a 
right to payment includes:  
- making a demand for payment; 
- threatening legal action to secure payment; 
- threatening to place the recipients name on a register of defaulters or debtors; 
- initiating debt collection procedures; or - sending any invoice seeking payment. 
  WT/TPR/M/178/Add.1 
 Page 171 
 
 
  Section 64 also prohibits businesses from asserting right to payment for unsolicited entries in a 
directory.    Case example:  Reader’s Digest - The ACCC received complaints from consumers who said that Reader's Digest had demanded payment for unsolic ited books and audio and video tapes which it had 
sent them in the mail.  In some instances consumers paid for goods they did not order under the belief 
that they were required to do so.  The ACCC has al so received complaints from consumers that they 
had received unsolicited copies of the Reader's Dig est monthly magazine in the mail, followed by 
invoices for subscriptions and, in some cases, dema nds for payment.  In all instances the consumers 
told the ACCC that they neither took out a magazine  subscription nor had one been given to them.  
Following an ACCC investigation, Reader’s Dig est admitted that it had demanded payment for 
unsolicited mail order products fro m consumers.  Reader’s Digest gave court-enforceable 
undertakings to refund affected consumers, and put in place measures to ensure that it did not engage 
in similar conduct in the future.  Question:  According to the document under discussion, Aust ralian legislation has introduced regulations 
against "price exploitation" as part of its consumer prot ection policy.  It would be important to know 
what these regulations of price exploitation are, and how Australia is ensuring that these regulations 
do not impose restrictions on the market and on free determination of the parties involved in a trade 
relationship. 
 Answer: 
 
It should be noted at the outset that the prohibitio n of ‘price exploitation’ was a temporary measure 
introduced at the same time as the Goods and Serv ices Tax (GST).  The price exploitation laws were 
designed to assist consumers to make the transition from the previous system, based on wholesale sales taxes of varying amounts, to a value-added ta x of 10 per cent at the retail level.  These 
provisions are no longer operative.  The GST came into effect on 1 July 2000.  The pri ce exploitation provisions of the TPA operated for 
a three year transition period – for one year befo re the introduction of the GST, and two years 
afterwards (July 1999 to end June 2002).  Because the GST replaced a number of existing wholesale sales taxes and other indirect taxes, there would be some offsetting effect in price movements for consumer goods and, to some extent, services.  
Some prices were expected to rise,  some to fall, and some to rema in around the same levels.  At the 
time the GST was introduced, it was a popular misconception that prices would simply rise by 10 per cent.  The Australian Government was concerned that busin esses may take advantage of the tax changes to 
increase prices beyond the level that would be justifie d by the tax changes alone.   This is due to the 
risk that businesses will often have access to greater pricing information than consumers, and there 
may be a lack of price transparency in the market generally (‘information asymmetry’).  The 
Government was also concerned that consumers in rural areas or less competitive markets may be 
more susceptible to unjustified price increases.  
The experience of other countries making the transiti on to some form of value added tax was that 
prices oversight regimes and communications campai gns tended to ensure a smoother transition for 
both businesses and consumers, and also hold inflation in check.  The Government therefore introduced a temporary prices oversight regime, administered by the Australian Competition and 
Consumer Commission (ACCC). WT/TPR/M/178/Add.1 
Page 172  
 
   
The prohibition on price exploitation was formulated to cover situations where the price for goods or 
services was unreasonably high, having regard to the introduction of the GST alone.  The question of 
whether a price was ‘unreasonably high’ would be in  light of matters such as supplier’s costs, supply 
and demand conditions, and any other relevant cons iderations.  Put another way, the ACCC would 
examine whether the price was unreasonably high ev en if the supplier’s costs, supply and demand 
conditions and any othe r relevant matter was taken into account. 
 The legislation also required the ACCC to issue guidelines as to when prices will be regarded as 
‘unreasonably high’.  These guidelines were aimed at providing businesses with greater certainty 
about how the ACCC would administer the law. 
 The Commission was also given powers to issue notices to prevent price exploitation.  These powers allowed the Commission to specify a maximum pri ce that may be charged for a specified period, 
which may extend to the end of the three year transition period.  Switzerland:
 
 Question: Section (4) (iii) (a) Competition policy  
Para. 107 of the Secretariat’s report indicates t hat exemptions to the TPA remain for international 
liner cargo shipping and that restrictions on cartels originating from abroad are stricter than on cartels formed by domestic exporters. Furtherm ore, the report suggests that anti-competitive 
behaviour can be allowed on co ndition that it is in the publ ic interest. Could the Australian 
authorities indicate the rationale for exempting ma ritime transport from competition rules ? Could 
the Australian authorities explain why a domestic cartel is considered as less damaging than a 
foreign cartel in maritime transport ? Also, could th e Australian authorities indicate on the basis of 
what criteria they judge that anti-competitive behav iour in maritime transport can be in the public 
interest ? 
 
Answer: 
Part X of the of the Trade Practices Act 1974  (TPA) provides international cargo shipping with an 
exemption from the general provisions of the Act.  It was introduced as mechanism to ensure the 
efficient supply of liner cargo shipping services on th e basis that collusive agreements between ocean 
carriers was necessary to prevent market instability,  and that benefits would be provided by the 
coordination of operations, spreading of risk, econom ies of scale and reduction of costs of obtaining 
regulatory approval for agreements.  
A review of Part X  in 2004-05 recommended that it be abolished but also recommended a number of 
amendments should it be retained.  In mid-2006, the Government announced it would retain and 
amend Part X to promote competitive reform of th e liner cargo shipping sector in Australia.  As 
recommended by the review, the Government will amend Part X to  remove discussion 
agreements (which provide the greatest anti-co mpetitive risk) from its scope, protect individual 
confidential service contracts between carriers and shippers and introduce a range of penalties for 
breaches of its procedural provisions.  The Governme nt considers that the amendments will ensure 
that Australian exporters and importe rs in all jurisdictions have st able access to high quality liner 
cargo shipping services of adequate capacity, frequenc y and reliability, and that a range of ports are 
served at freight rates that are internationally competitive.  
In considering the public benefit of an agreement registered under Part X, the Government would take 
into consideration whether the ag reement is consistent with the Part's objective regarding access to  WT/TPR/M/178/Add.1 
 Page 173 
 
 
  liner cargo shipping services of adequate frequency, geographical coverage a nd reliability at freight 
rates that are internationally competitive. 
Intellectual property rights  
Canada:  
Question: 
(Paragraph 132) 
Canada notes that according to the Secretariat Re port “[t]he IP Laws Amendment Act 2006, passed 
on 27 September 2006, includes various amendments to the Patent Act 1990, the Designs Act 2003, 
the Olympic Insignia Protection Act 1987, the Pl ant Breeder's Rights Act 1994, and the Trade Marks 
Act 1995.” 
Canada would be grateful if Australia could provide additional information regarding the 
amendments introduced as a result of th e IP Laws Amendment Act of 2006. 
Answer Details on the IP Laws Amendment Act  can be found in the Official Notice published on 14 September 
2006 which can be found at http://www.ipaustra lia.gov.au/pdfs/news/PassageofIPLawsBill.pdf  
Royal Assent was 27 September 2006.  The provisio ns in Part 3 of the notice will commence on 
27 March 2007. 
Question: Canada notes that according to the Trade Policy Revi ew Report by the Government of Australia, that 
Australia submits that it played a constructive role  on the issue of TRIPS and Public Health. Canada 
notes with interest the role played  by Australia and would be grateful if it could provide additional 
information with regards to its intention to im plement the WTO Decision on Access to Medicines and 
if any concrete steps have been contemplated to that end. 
Answer: Australia played a constructive role in the nego tiations to implement paragraph 6 of the Doha 
Declaration on the TRIPs Agreement and Public H ealth.  Australia supported the TRIPs amendment 
set out in the Protocol which will provide a perm anent legal basis for developing countries with 
insufficient manufacturing capacity in pharmaceuti cals to import patented medicines made under 
compulsory licences in other countries to address public health needs.   
Australia is currently undertaking the domestic pr ocesses necessary to enable  acceptance by Australia 
of the Protocol within the stipulated time period.  This includes stakeholder consultations which are 
being coordinated by the Department of Foreign A ffairs and Trade (DFAT).  The Protocol must also 
be tabled in Australia’s Federal Parliament and considered by the Joint Standing Committee on 
Treaties.  Further information on these processes can be found at: http://www .dfat.gov.au/treaties/ 
treaties_handbook.pdf   
Chile:
 
 Question:  
In paragraph 131 Australia states that "[t]he innova tion patent … intends to stimulate innovation in 
SMEs by providing them with easier access to, but  a shorter term of, protection for inventions."  WT/TPR/M/178/Add.1 
Page 174  
 
  Please explain if invention patent's requirements are differen t from standard patents requirements.  If 
the answer is yes, please provide main elements to  be considered when granting protection to these 
patents.   Answer: 
 
The difference between innovation patents and sta ndard patents lies in the threshold test for 
inventiveness.  For an innovation patent the invent ion must have an innovative step whereas for a 
standard patent the invention must have an inventive step.  
Subsection 7(4) of the Patents Act 1990  (the Patents Act) defines an “innovative step” as: 
 
“(4) For the purposes of this Act, an invention is to be taken to involve an innovative step 
when compared with the prior art base unl ess the invention would, to a person skilled 
in the relevant art, in the light of the common general knowledge as it existed in the 
patent area before the priority date of the relevant claim, only vary from the kinds of 
information set out in subsection (5) in ways  that make no substantial contribution to 
the working of the invention. 
 (5) For the purposes of subsection (4), th e information is of  the following kinds: 
(a) prior art information made publicly available in a single document or through 
doing a single act; 
(b) prior art information made publicly av ailable in 2 or more  related documents, 
or through doing 2 or more related acts, if the relationship between the 
documents or acts is such that a person skilled in the relevant art would treat 
them as a single source of that information. 
 
(6) For the purposes of subsection (4), each ki nd of information set out in subsection (5) 
must be considered separately.” 
 Subsection 7(2) of the Patents Act defines an “inventive step” as:  
“(2) For the purposes of this Act, an invention is to be taken to involve an inventive step 
when compared with the prior art base unless th e invention would have been obvious to a 
person skilled in the relevant art in the light of the common general knowledge as it existed in 
the patent area before the priority date of the relevant claim, whether that knowledge is 
considered separately or together with th e information mentioned in subsection (3). 
 
(3) The information for the purposes of subsection (2) is:  (a) any single piece of prior art information; or 
(b) a combination of any 2 or more pieces of prior art information; being 
information that the skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have 
ascertained, understood, regarded as rele vant and, in the case of information 
mentioned in paragraph (b), combined  as mentioned in that paragraph.” 
 
Question: 
 
Could you explain how an innovat ion patent grants an easier access to protection for SMEs 
inventions?  
  WT/TPR/M/178/Add.1 
 Page 175 
 
 
  Answer: 
 
The innovation patent system enables easier acces s for SMEs as they are able to protect their 
innovations which may not meet the higher test for standard patents.  Further, the grant of an 
innovation patent is simpler and quicker as it is granted after only a formalities examination.  
However, an innovation must undergo substantive examination and be certified by the Commissioner 
of Patents before it may be enforced.  This provides a cheaper mechanism for protection as the 
patentee pays for substantive examination only when it is required.  
Question: 
 
In paragraph 133 "defensive trade marks" are menti oned as a special category of signs to be 
registered in Australia.  In this regard:   Please provide requirements to be co mplied for filling an application.  
 
Section 185 of the Trade Marks Act 1995 provides a definition of a defensive trade mark and the 
circumstances under which an application for registr ation of a defensive trade mark may be made.   
 
Answer: 
 These circumstances are as follows: 
 
- the trade mark must, at the time the application for a defensive registration is filed, 
already be registered in the name of the applicant; 
- the trade mark must have been used to such  an extent, in relation to all or any of the 
goods or services in respect of which it is registered, that its use on the goods or 
services sought by the defensive registra tion would be likely to be taken by 
purchasers as indicating a connection betw een those goods or services and the owner 
of the registered trade mark; 
- it is not necessary for the registered owner of the defensive trade mark to have an 
intention to use the trade mark  in respect of the particular goods or services specified; 
and 
- a trade mark may be registered as a defens ive trade mark in respect of particular 
goods or services even if it is otherwise regi stered in the name of the applicant in 
respect of those same goods or services. 
 
The procedure for filing a defensive trade mark app lication is the same as for “standard” trade marks 
but with two additional requirements.  The registration number of the registered trade mark upon which the defensive application is based should be  entered on the application form and evidence in 
support of the application must be filed.  In acco rdance with regulation 17.1, this evidence must be 
filed at the time of filing the application or as soon as practicable after filing the application. 
Question: Is there any special rule related to the use of defensive trade marks?  
Answer: As stated above, it is not necessary for the registered  owner of the defensive trade mark to have an 
intention to use the trade mark in respect of th e particular goods or services specified.  Section 85 
provides that a trade mark may be registered as a de fensive trade mark in respect of particular goods 
or services even if the registered owner does not u se or intend to use the trade mark in relation to WT/TPR/M/178/Add.1 
Page 176  
 
  those goods or services.  Consequent ly, paragraph 27(1)(b), which relate s to the intentions for use of a 
trade mark, does not apply because there is no require ment for a defensive trade mark to be used. 
However the applicant’s earlier registration must have been used to such an ex tent that the applicant 
has developed a widespread reputation the trade ma rk (see second dot point in paragraph (a) above). 
Question: 
Do general grounds for annulment apply for defensive trade marks?  Are there special grounds for its 
annulment?  
Answer: 
A ‘standard’ registered trade mark may be removed from the Register in the following circumstances: 
- cancellation of the registration is requested by the registered owner of the trade mark 
(section 84); a prescribed court may, on the application of an aggrieved person or the 
Registrar, order that the Register be r ectified by cancelling registration of a trade 
mark: 
- where a condition or limitation entered in the Register in relation to the trade mark 
has been contravened (section 86); 
- where the trade mark has become the genera lly accepted within the relevant trade as 
the sign that describes or is the name of an article, substance or service or is the only commonly known way to describe or identify an article formerly exploited under a 
patent, or a service formerly provided as a patented process, where the patent has expired more than 2 years (section 87); 
- under section 88 on any of the grounds on whic h the registration of the trade mark 
could have been opposed under this Act; an  amendment of the application for the 
registration of the trade mark was obtained as a result of fraud, false suggestion or misrepresentation; because of the circumst ances applying at the time when the 
application for rectification is filed, the use of the trade mark is likely to deceive or 
cause confusion a person has successfully applied to the Registrar or a prescribed 
court to have the registration removed because; 
− the registered trade mark had not been used for a continuous period of 3 
years, and/or when the trade mark app lication was filed, the applicant had no 
intention in good faith to use the trade mark in Australia.(section 92) 
 
A defensive registration may be removed in most of  the above circumstances.  However not all the 
grounds on which the registration of the trade mark could have been opposed under this Act apply to 
defensive trade marks.  For example section 59, which provides for a ground of opposition on the 
basis of lack of intention to use, does not apply to  defensive trade marks as there is no requirement for 
the applicant or registered owne r to use a defensive trade mark. 
 
Similarly section 92, removal for non use, does not apply to defensive marks for the same reason.  
Although Part 9 (removal for non-use) is not directly  applicable to defensive trade marks, it may 
indirectly be used to attack the defensive registra tion by action to cancel or remove the primary trade 
mark registration upon which the defensive regist ration is based, thus enabling the provisions of 
sections 88 and 189 to be invoke d for the purpose of cancelling the defensive registration.   
 
Special ground of cancellation  
 Under section 189 the Registrar may cancel the registra tion of a trade mark as a defensive trade mark 
if the trade mark is not otherwise registered in the name of the registered owner of the defensive trade 
mark.  WT/TPR/M/178/Add.1 
 Page 177 
 
 
  Question: 
 According to Paragraph 136, geographical indica tions are protected through the Trade Marks Act 
1995, as certification trade marks;  and through th e Australian Wine and Brandy Corporation Act 
1980, which establishes a "Register of Protected  Names" for the protection of geographical 
indications of Australian and foreign wines. 
 Could a foreign GI, non registered in Australia as a certification trade mark or a protected name, be 
protected through the Trade Practices Act 1974?  What conditions should be met?  
 
Answer:  
Yes, a foreign GI that is not registered in Au stralia as a certification trade mark nor placed on the 
Register of Protected Names may be able to be protected under the provisions of the Trade Practices 
Act 1974 (TPA).  Section 52  of that Act  provides that “a corporation shall not, in trade or commerce, 
engage in conduct that is misleading or deceptive or  is likely to mislead or deceive.”  Section 53 
provides that a corporation shall not “falsely represen t that goods are of a particular standard, quality, 
value, grade, composition, style or model ..” nor “make a false or misleading representation 
concerning the place of origin of goods”.  There ar e further provisions in the Act about supplying 
goods that falsely represent standards and quality as well as false or misleading representations about 
the origin of goods.   
 
In considering whether there has been a breach  of the Act, issues considered include: 
misrepresentation; prospective cust omers; injury to the business or goodwill of another trader; and 
actual damage to a business or goodwill of th e trader by whom the action is brought. 
 Question:  Could a foreign GI for wine be concurrently protected as a certification trade mark and as a 
protected name in Australia?   Answer: 
 
Yes, a foreign GI for wine can be concurrently protected as a certification trade mark and be placed 
on the Register of Protected Names in Australia.  An example of this relates to German wines.  Prior 
to the implementation of Australia/EC Wine Ag reement, numerous German GIs were protected 
through the certification trade mark system.  With the inclusion of these terms on the Register of 
Protected Names following the conclusion of the wi ne agreement, many of the terms subsequently 
were not renewed under the trade marks system.  A few of the terms, though, continue to have dual 
protection through the Register of Protected Names a nd the trade mark system.  In recent times there 
has been some interest in Australian GIs for wine  currently included on the Register of Protected 
Names also being protected as certification trade marks.   Question:  Once a GI for wine is registered as a protected name, what kind of protection is granted according to the Wine and Brandy Corporation (AWBC) Act 1980?  Does it include the same rights granted to a certification trade mark?    
 
Answer: 
 
Under the AWBC Act, the ability to use a GI is availa ble to all wine originating within the determined 
boundary, as is the case with the certification trad e marks covering GIs for wine.  As outlined in WT/TPR/M/178/Add.1 
Page 178  
 
  IP/C/W/117/Add19, 9 July 1999, Australian Wine and Brandy Corporation (AWBC) activities are 
directed at establishing a “culture of compliance” within the industry.  Given the requirement for 
maintenance of proper records, the absolute natu re of the determined geographical boundary and the 
availability to use the GI on all wine originati ng with the boundary, the scope for disputation is 
limited.  Dispute resolution in the first instan ce is through discussion with the AWBC and then 
through the Federal Court.  Similarly action can be taken through the courts in regard to certification 
trade marks.  As yet a comparison of the protection provided under each system has not been tested through the courts.   
Question: 
 
Is the enforcement system for GIs registered as a cert ification trade mark the same of a GI registered 
as a protected name?  If is not, please explain diff erences between them.  In case of infractions, what 
are their civil and criminal actions?   
Answer:  
See above.  As mentioned in IP/C/W/117/Add19, a ra nge of options are available to protect GIs in 
Australia, whether they are protected through the Regi ster of Protected Names, through the trade mark 
system or otherwise.  For instance, action to en force GIs protected under the trade mark system may 
be through the courts e.g. for infringement action or through the courts because of action by the 
Australian Competition and Consumer Commission for breaches of the Trade Practices Act 1974 .  
Action may be taken by the owners or on behalf of affected partie s by the Australian Competition and 
Consumer Commission (ACCC), or relevant st ate and territory fair trading bodies.  
 It may be noted that the AWBC 1980  prescribes certain conditions are to be met in the description and 
presentation of wine and there are substantial pena lties (including jail terms and fines) for applying 
false and misleading descriptions or presentation of wine involving the improper use of a registered GI.    In relation to the trade mark system, there is a re quirement for any wine trade mark containing a GI, 
including certification trade marks, to include an  endorsement by the owner to adhere to the 
conditions.  Under the Trade Marks Act 1995 , there are provisions addressing instances where trade 
marks may be contrary to law, or contain or consis t of a false GI.  Court action is available to cancel 
the registration of a trade mark in certain circumst ances.  In an action for infringement of a trade 
mark, a court may grant an injunction and damages or an account of profits.  If a registered trade mark 
has been falsely applied, penalties may include a fine and/or imprisonment.     
 
Question: 
 According to paragraph 142, para llel importation is explicitly forbidden for films (DVDs).  Could you 
explain the rationale for this restriction?   
Answer:  
The Australian Government's approach to the issue of parallel importation has been to consider the 
issue on an industry by industry b asis.  The Australia Government does not currently have any further 
plans to review its law in relation to parallel importation of copyright material. 
  WT/TPR/M/178/Add.1 
 Page 179 
 
 
  China:  
 Question: (Paragraph 127)   
It is indicated in the Secretariat Report that Australia has committed to acceding to both the 1996 
WIPO Copyright Treaty and the 1996 WIPO  Performances and Phonograms Treaty (WPPT).  
Is there a specific timetable for these accessions?  Answer: 
 
Australian copyright law is already consistent with the World Intellectual Property Organization 
(WIPO) Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT), known collectively as the Internet treaties.  
The Australian Government is well advanced in working towards formal accession to the Internet 
treaties and while we are unable to advise precisely on a timeframe it is antic ipated that this will 
proceed during 2007. 
 
Question: 
 
Does Australia impose criminal penalties on infringement and piracy over the Internet?  
 Answer: 
 
Copyright infringement over the Internet may attract criminal penalties in Australia.  The Copyright 
Act, as amended last year, provides for criminal penalties under a tiered system of indictable, 
summary and strict liability offen ces relating to copyright piracy.  
 The most serious offences are indictable.  They have default fault elements of intention and 
recklessness.  They have maximum penalties of 5 years imprisonment and/or between 550 ($A 60,500) to 850 ($A 93,500) penalty units for natural persons. 
 
The summary offences have a lower threshold, with most containing fault elements of intention (by 
default) and negligence.  They have maximum penalties of 2 years imprisonment and/or 120 ($A 
13,200) penalty units.  
Under the Crimes Act 1914 , a corporation may be fined up to 5 times the maximum fine. 
 In addition to traditional forms of reproduction, the criminal provisions of the Copyright Act  
specifically apply to an electronic reproduction, or an electronic copy of a work or other subject-matter.  The definition of an ‘article’ under the Act would include, for example, a hyperlink that 
facilitated downloading of infringing copies (see Universal Music Australia PTY Ltd v Cooper [2005] 
FCAFC 187) .  This would make it a crimin al offence to distribute online, or offer to sell, an infringing 
electronic reproduction.  It is also a criminal offence to infringe copyright on a commercial scale where such an infringement has a substantial prej udicial impact on the owner of the copyright. 
 
Question: 
 
What are the liabilities for ISPs in such cases? Do they include criminal liabilities? 
 WT/TPR/M/178/Add.1 
Page 180  
 
  Answer: 
 
There is no criminal liability for the authorisation of copyright infringement in Australia.  In order for 
an ISP to be held criminally liable, they must actually have committed the offence, e.g. they must 
distribute an infringing article for commercial advant age or profit.  Under Australian law, there is no 
distribution where an ISP acts as a mere conduit.  However, the normal criminal law in relation to 
aiding and abetting applies.  
Japan:
 
 
Question: 
(Paragraph 144)   
The Secretariat report states that for copyright offe nces, the maximum penalty is a fine of not more 
than AUD 93,500 together with imprisonment of not more than five years. The report also indicates 
that for trade mark offences, pe nalties may take the form of fines of up to AUD 55,000, and/or 
imprisonment for up to two years for individuals; monetary penalties for a company can be up to five 
times the penalty for individuals. 
 
In case Australia has penalties for the offence of intellectual property rights other than copyright and 
trademark, particularly patent and design, Japan would like to know further on maximum fines and imprisonment and whether fines and impris onment can be imposed together. 
 
Answer 
 
The Patents Act 1990  provides penalties for a series of miscellaneous offences (Chapter 18).  
However these relate to administrative matters (e.g . unauthorised disclosure of information) rather 
than issues of infringement.  The Designs Act 2003  also only provides penalties for similar offences 
(Chapter 11, Part 3).  Depending on the nature of the offence, the penalties can either be a fine or 
imprisonment, but not both.  The maximum penalty under the Patents Act 1990  is a fine of $A 6,600 
or imprisonment for 2 years, while under the Designs Act 2003 , the maximum penalty is a fine of $A 
6,600 or imprisonment for 12 months.      An action for infringement of a patent or a design is  dealt with by a prescribed court or in another 
court that has jurisdiction.  The relief which a court may grant for infringement may include an 
injunction (subject to such terms, if any, as the cour t thinks fit) and either damages or an account of 
profits.  
Question: 
 
Japan understands that upon acceptance of a notice of objection lodged by the IPR owner, customs 
may take measures to seize and hold imported goods  infringing copyright and trademark at the 
border. Japan would like to know whether cust oms may take measures to seize and hold imported 
goods infringing intellectual property rights other than copyright and trademark.  
Answer:  
The Trade Marks Act 1995 , Copyright Act 1968  and the Olympic Insignia Protection Act 1987, 
contain specific powers for Customs however, no sim ilar import provisions are included in the patents 
and design legislation.  
In addition to the above powers, Australian Cust oms has the ability to seize goods which bear a false 
trade description.  Under the Commerce (Trade Descriptions) Act 1905 , a trade description may  WT/TPR/M/178/Add.1 
 Page 181 
 
 
  amongst other things, include a claim that the goods are subject to an existing patent, copyright or 
other privilege.    A false trade description is defined as ‘a trade description which, by reason of 
anything contained therein or omitted therefrom, is fa lse or likely to mislead in a material respect as 
regards the goods to which it is applied, and includ es every alteration of a trade description, whether 
by way of addition, effacement, or otherwise, whic h makes the description false or likely to mislead in 
a material respect.’  As a result goods imported wh ich infringe patent, design or other privilege may 
be seized by Customs upon issue of a warrant from a magistrate. 
 
USA:  
 
Question: 
 Paragraph 127 on page 69 of the Secretariat report notes that Australia has not acceded to the 1996 
WIPO Copyright Treaty or the Performances and Phonograms Treaty.  
Please describe the timeline for Aust ralia’s accession to these treaties.  
 Answer: 
 
Australian copyright law is already consistent with the World Intellectual Property Organization 
(WIPO) Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT), 
known collectively as the Internet treaties. 
 The Australian Government is well advanced in working towards formal accession to the Internet 
treaties and while we are unable to advise precisely on a timeframe it is antic ipated that this will 
proceed during 2007. 
 
Question: 
 Paragraph 144 on page 72 of the Secretariat report discusses various mechanisms of IPR 
enforcement in Australia.  Is customs able to seize suspected infringing goods even without a notice of 
objection lodged by an IPR owner?   
 
Answer: 
 
To protect trademarks, or copyright material from counterfeit, pirated or una uthorised importation, the 
owner of those rights, or in some cases an authori sed user, must have a Notice of Objection in place 
with Australian Customs.  Under both the Trade Marks Act 1995  and the  Copyright Act 1968 , 
Australian Customs cannot seize infringing goods unl ess there is a Notice of Objection in place.  
 
Question:  What is the most effective way for rights holders to  quickly provide information to customs authorities 
regarding suspected imports of infringing goods?  
 Answer: 
 
Not every consignment of goods that enters Australi a presents a risk in terms of the border controls 
that Customs administers.  As mentioned above, a Notice of Objection must be in place for Customs 
to seize infringing goods.  Where rights owners are aw are of an imminent shipment that may infringe 
their rights they can provide information direct to iprights@customs.gov.au for further action.    WT/TPR/M/178/Add.1 
Page 182  
 
  Customs also encourages the public to provide information that will assist in identifying and 
intercepting suspected infringing goods by reporting it to Customs Information at: information@customs.gov.au..  
Question 
 
Please describe Australia ’s experiences in imposing additional da mages in criminal copyright cases 
since implementation of the Copyright Act amendmen ts (referenced in paragr aph 140 on page 72 of 
the Secretariat report). 
 
Answer: 
 
Australia has not yet used these provisions, so no information can be provided on Australia’s 
experience. 
  WT/TPR/M/178/Add.1 
 Page 183 
 
 
  CHAPTER IV.  TRADE POLICIES BY SECTOR  
 
Agriculture, livestock, forestry, and fisheries  
 
EC: 
 Question: (Paragraph 15)  
On which agricultural products does Australia apply the highest tariffs and how high are they?  
 
Answer:  
 
The highest applied agricultural tariff is the above -quota $A 1,220 per tonne duty imposed on certain 
cheese and curd products.  Product coverage for th e Cheese and Curd Import Quota Scheme includes:  
 
- Fresh cheese (unripened etc.) and curd  HS 0406.10.00 - Grated or powdered cheese   HS 0406.20.00 - Processed cheese not grated or powdered HS 0406.30.00 - Blue veined cheese – other    HS 0406.40.90  
- Other cheese nsa    HS 0406.90.90 
 However, the majority of products imported under these tariff lines enter duty free as the tariff quota does not apply to imports from Papua New Guinea, the Forum Islands countries or Australia’s free 
trade agreement partners - New Zealand, Singapo re, Thailand and the United States.  Developing 
countries are also accorded a 5 per cent preference on the above-quota duty, while imports from Least 
Developed Countries enter duty-free.  Cheese and curd imports originating from countries that are not exempt from the tariff quota, enter at the lower in-quota duty rate of $A 96 per tonne until the tariff quota volume of 11,500 tonnes is reached.  The above-quota duty rate is $A 1220 pe r tonne.  [Please note that Australia’s MA:2 
notification (which covers the Cheese and Curd Import  Quota Scheme) is expected to be submitted to 
the WTO shortly.]  A number of cheese types are also not covered by the tariff quota (these ente r Australia at a zero 
bound rate of duty).  Cheeses that are exempt from the tariff quota are: Roquefort and stilton (HS 
0406.40.10); cheese made wholly from goats’ milk, other than fetta or kasseri (HS 0406.90.10); and 
specified types of surface-ripened soft cheese,  including camembert and brie (HS 0406.90.10). 
 
Question: (Paragraph 17)  
Why does Australia apply export restrictions on some of its agricultural products? 
 On which products do these restrictions apply?   Are these measures applied on a perm anent basis or temporally?  
 
Answer: 
 
The Australian Government applies a number of arrangements to certain agricultural products to 
ensure exporters meet the import conditions imposed by other countries. This is regulated by the WT/TPR/M/178/Add.1 
Page 184  
 
  Australian Quarantine and Inspection Service whic h is responsible for granting export licences for 
meat, dairy products, eggs, live animals, fi sh, grains and some vegetables and fruit. 
 In addition, at the request of several industry gr oups, export licensing requirements are in place with a 
view to maintaining product quality and effective ma rketing.  These arrangements are outlined below. 
 
Wine and Brandy Products
 
 Export licensing requirements have been implemented at the request of industry on wine and brandy 
products in both bulk and bottled form.  The export license requirements are an industry-wide agreed 
set of conditions that act as a quality assurance m easure to ensure that all wines exported from 
Australia are sound and of merchantable quality (free of obvious faults).  These requirements are 
aimed at preserving the “Wine of Australia” brand and its internationally recognised reputation for 
quality and integrity.   
At 30 June 2006 there were 1,577 licensed exporte rs of wine and bra ndy products.  Non-wine 
producers comprise 34 per cent of all licensees.   These export licensing measures are administered by  the Australian Wine and Brandy Corporation 
and are applied on a permanent basis.  
Certain Horticulture Products
 
 Horticulture Australia Limited ( HAL), a peak industry marketing body, administers export licensing 
requirements for:   
- apples to all export markets; 
- pears to all export markets; - dried grapes to all export markets; - oranges to all export markets; and - mandarins, tangelos, grapefruit, lem ons and limes to the United States. 
 
The export licensing requirements establish industry- wide agreed set of conditions under which 
export trade can take place for specified products.  The respective industries agreed that HAL should 
administer these licensing requirements, which are intended to assist industry with the sustainable 
development of export markets while achieving less volatile returns for growers.  
The license restrictions relate predominantly to speci fying or registering the importers/distributors in 
the importing market with whom licensed Australia n exporters can deal and specifying the areas in 
Australia from which fruit can be exported.  These arrangements are applied on a permanent basis and 
have not been used to restrict the number of exporters. 
 
Question: 
(Paragraph.21) 
 Could Australia inform about the number of farmer s that have used the farm help re-establishment 
grant (FHRG) and the amount of money that has been paid out?   
 
Answer:  
The table below provides an indication of the amount of money distributed to farmers under the Farm Help Re-establishment Grant (FHRG) and the number  of recipients since the 1997-98 financial year. 
  WT/TPR/M/178/Add.1 
 Page 185 
 
 
   $A million Number of farmers 
1997-98 1.5 45 
1998-99 7.5 214 
1999-00 9.8 232 
2000-01 7.3 140 
2001-02 5.7 182 
2002-03 6.4 157 
2003-04 4.1 91 
2004-05 2.1 47 
2005-06 2.4 53 
2006-07 (as at 31/01/07) 1.0 21 
Total 1997–2007 47.8 1,182 
 
Switzerland:  
 In para. 6, the Secretariat’s Report mentions that, in recent years, around two thirds of the 
agriculture sector’s output was exported directly, ma king agriculture the most export-oriented sector 
after mining. Could the Australian authorities indicate, in view of the environmental problems 
encountered in some of the regions where a subs tantial agricultural activity appears to be 
concentrated, what measures are being taken or c onsidered to ensure that the interests of the agro-
exporters are reconciled with the needs of envi ronmental protection, notably to mitigate the 
environmental costs and to ensure the l ong term sustainability of agriculture?  
 
Answer: 
 Sustainable agricultural practices have an important role to play in Australia’s approach to natural 
resource management.  Some past agricultural pr actices, based on European experiences, were not 
suited to Australian conditions.  We have learned fr om these mistakes and in many areas Australia is 
now at the forefront of international best prac tice in environmental management.  For example, 
sustainable land management practices such as mini mum tillage and fencing of streams and remnant 
vegetation are now standard practice on many farms.  Sustainable agriculture in Australia is about being productive, profitable and competitive over the 
long term, and being environmen tally responsible so that off-farm impacts are minimal. 
 
The majority of national investment is made through three complementary programmes known as the 
National Action Plan for Salinity and Water Qualit y, the National Heritage Trust and the National 
Landcare Programme.  These programmes are designed to deliver natural resource management outcomes that are decoupled from farm production.  
Underpinning these measures is the provision of re levant and timely information to assist those 
making decisions about the most appropriate sustainable farming practices.  These measures also encourage innovative farming practices, such as increased on-farm biodiversity, that deliver 
environmental outcomes and productivity gains.  
Further information about programmes aimed at en suring the long term sustainability of Australian 
agriculture is available from the following websites:  
- National Action Plan for Salinity and Water Quality (www.napswq.gov.au) - National Heritage Trust (www.nht.gov.au) - National Landcare Programme (www.landcare.gov.au) WT/TPR/M/178/Add.1 
Page 186  
 
  Thailand:
 
Question: The Secretariat Report points out that two kinds of adjustment assistance have been provided for 
Australia’s dairy sector, namely (1) prior to th e year 2000, a combination of price and regulatory 
controls and (2) since the year 2000, a federal Dairy Industry  Adjustment Package (DIAP).  What are 
the key differences between these two kinds of assistance?  
Answer: 
The Australian dairy industry has undergone sign ificant reform over the past decade and is now 
completely deregulated in relation to price support measures, supply and distribution.   
Prior to July 2000, regulated drinking milk pricing arrangements guaranteed a set price to farmers for 
milk.  In 2000 the dairy industry requested the re moval of the existing price regulation arrangements 
to further the development of a more fl exible and export-orientated industry. 
Deregulation of the set pricing arrangements became effective from 1 July 2000.  At this time the 
Australian Government implemented a funding package called the Dairy Industry Adjustment 
Package (DIAP) aimed at easing the adjustment path  for dairy farmers and affected communities and 
businesses. 
The DIAP is funded by an 11 cent per litre consumer  levy on drinking milk and is expected to run 
until about 2009.  The levy will cover the cost of th e package including all administration costs.  It is 
imposed on all domestic sales of fluid milk products. 
Question: Please provide more details regarding the federal DIAP as follows: 
What are the requirements or guidelines that dairy producers with an existing dairy structural 
adjustment programme (DSAP) entitlement must or should follow to receive assistance under the 
supplementary dairy assistance programme (SDA)?  
Answer: 
The Supplementary Dairy Assistance (SDA) progra mme commenced on 21 May 2001, to assist those 
dairy farmers most severely affected by price move ments following the deregulation.  To be eligible 
for a payment under the SDA, a recipient must have been granted a DSAP payment right; have held an interest in a dairy farm enterprise at 21 Ma y 2001; and not have made an application for, or 
received payment under, the Dairy Exit Programme. 
Question: 
Under the DSAP, direct assistance of $A 1.63 billion is  available for eligible dairy farmers until 2008.  
Please clarify how this direct assistance is alloca ted to individual farmers? Is there any specific 
criteria? How much does an indivi dual farmer receive each year? 
Answer: 
To be eligible for a Dairy Structural Adjustment Programme (DSAP), dairy farmers must have had an 
interest in an eligible dairy farm enterprise at  28 September 1999 and the dairy farm enterprise must 
also have delivered milk to a company or ot her organisation during the 1998/99 financial year. 
  WT/TPR/M/178/Add.1 
 Page 187 
 
 
  Dairy farmers had to make an application during th e three month registration period (which ended on 
17 August 2000) and there is no longer an option to access the DSAP.  Payments granted to eligible 
dairy farmers commenced in the last quarter of 2000. Eligible farmers were  granted payment rights 
calculated on the basis of the quality of milk produced.  
The average DSAP was $A 55,000 and is being paid  quarterly over an eight year period (until April 
2008) with recipients receiving, on average, $A 6, 875 each year in four instalments of $A 1,718.  
 
Question: 
 
What are the additional benefits that producers wi th DSAP entitlement who also receive assistance 
under the SDA gain? Is the entire amount of $A 120 million that is allocated to farmers who have 
been severely affected by deregul ation also allocated to producers who apply for assistance under the 
SDA?  
Answer:  
Farmers who were granted SDA payments received  on average $A 15,000 in addition to payments 
under DSAP.  The $A120 million allocated to farmer s who were severely affected by deregulation 
includes the SDA payments.  Question:  What are the criteria for dairy producers with DS AP/SDA entitlement to apply for assistance under 
the exit programme (DEP) and farm he lp re-establishment grant (FHRG)? 
 
Answer:  
The Dairy Exit Programme (DEP) ended on 1 July 2002 and was replaced by the Dairy Type Grants 
under the Farm Help Re-establishment Grant Scheme  (FHRGS).  The FHRGS is expected to close 
30 June 2007.  DSAP entitlement holders, where el igible, are now able to  access exit assistance 
through the FHRGS. 
 
The FHRG Scheme provides time limited access to a grant of up to $A 50,000 to farmers in the dairy industry who decide to leave farming.  A retraini ng grant of up to $A 5,500 is also available to 
eligible farmers to assist finding an alternative caree r after exiting farming.  Under the basic eligibility 
criteria, a person is qualified to appl y for a Dairy Type Grant where they: 
 
- qualify for Farm Help income support; - have been a farmer in relation to the farm  enterprise for a continuous period of at 
least two years immediately before the application is lodged; 
- hold a right or interest in the land used for the farming enterprise; - have contributed capital to the value of $A 50,000 or more to the farm; 
- have been granted a payment right under the DSAP Scheme; and 
- have assets less than $A 175,000.  
 Recipients undertake to repay the dairy exit payment if they become a farm owner or operator within 
the following five years of receiving a dairy exit payment. 
 
More information relating to the FHRGS may be found at www.daff.gov.au/farmhelp.  WT/TPR/M/178/Add.1 
Page 188  
 
  Question: 
 Does the Australian government have any monito ring and assessment mechanisms in place to 
evaluate the Australian dairy industry after producers exit the industry? Please elaborate. 
 
Have Australian dairy farmers become  more competitive as a result of  the assistance programmes?  
How so?  
 Answer: 
 In November 2003, the South Australian Centre for Economic Studies (SACES) undertook an 
independent review to evaluate the effectiveness of the DSAP and SDA programmes.  This review found that both the DSAP and SDA programmes performed well on their delivery 
objectives.  The pace of structural adjustment in the industry, which was occurring well before 
deregulation, was hastened, as producers were given the option to exit the industry with dignity and 
those farmers that remained made the necessary changes to lower their unit cost structures and 
enhance their efficiencies.  This was achieved by increasing herd sizes, retiring debt and/or upgrading 
capital equipment.  According to the review, DSAP/SDA assistance made it easier for some farmers to leave the industry.  
In addition, DSAP/SDA claims were processed prompt ly, the programme delivery costs were kept to 
acceptable levels and the uptake of those eligible to apply for assistance was high, indicating that both 
programmes met their delivery objectives.   The Rural Industries Research and Development Co rporation has also undertaken analysis of the 
impact of total deregulation on the Australian dairy industry.  These detailed case studies are available 
from www.rirdc.gov.au.  At the time of industry deregulation on 1 July 20 00 there were approximate ly 12,896 dairy farms.  
Since that time approximately 4,052 farms have ceased producing milk, leaving approximately 8,850 
farms.  This equates to a national average exit ra te of about 5.2 per cent per annum.  Of these, 
approximately 1,050 (or 26 per cent) left  in the first year after deregulation. 
 Despite this trend, average herd sizes and produc tivity has been increasing significantly.  Over the 
past ten years total milk production has increased  11 per cent from 9 billion litres to 10 billion litres 
whilst the number of cows milked in Australia ha s increased by only around 0.4 per cent.  The 
increase in milk production per cow from 4,682 litres to 5,034 litres over the same period indicates 
that the dairy industry has become more effi cient and competitive.  The average proportion of 
manufactured milk production exported each year  has also increased following deregulation. 
 
Turkey:
 
 
Question: 
 It is noted that whilst the simple average MFN Tar iff for agricultural products remains low, at 1.4% 
and that most agricultural products  are imported duty-free, various levies and charges as well as 
export restrictions and licensing requirements are in effect in Australia, so me of them which is 
applied in a discriminatory manner such as the ex port prohibition of merino genetic materials. 
 We would like to ask the esteemed Australian Dele gation, their further elaboration of those wide-
spread non–tariff measures applied in the agricultural sector of such a country well known with her 
competitiveness of her agricultural exports.     WT/TPR/M/178/Add.1 
 Page 189 
 
 
  Answer:  
 
Information regarding Australia’s export licensing ar rangements has been provided in response to the 
question from the EC.  
Australia has export arrangements in place to limi t the export of live merino breeding stock and 
genetic material.  Arrangements allow the export of live merino breeding stock to MFN trading 
partners for up to 800 rams per year — this arra ngement has never been filled.  An additional 100 
head quota is reserved for studs to place rams on an export donor registry maintained by the 
Australian Association of Stud Breeders.  Unde r the Australia–New Zealand Closer Economic 
Relations free trade agreement, live merinos and merino genetic material can be exported to New 
Zealand without restriction.   Australia does not consider any of these arrangeme nts to be non-tariff measures as they have no 
impact on imports. 
 
Non-tariff measures applied to imports of agricultur al and food products are generally in place to 
maintain public food safety standards and protect Aust ralia’s human, animal and plant health status.  
Should Turkey have any queries regarding specific measures, Australia would be able to provide 
further details. 
 
Mining 
 China:
 
 Question: 
 
Australia requires that exploration reports of mi nes shall follow the 20 04 Australian Code for 
Reporting Exploration Results, Mineral Resource s and Ore Reserves, which means that reports 
produced by foreign services providers are not accepte d. In this case mining projects with Chinese 
investment can only turn to Australi an laboratories for exploration services.  
China would like to know how the Chinese exploration services providers can contribute to those 
projects with investment from Chinese enterprises. 
 Answer: 
 
In Australia, companies (foreign and domestic) are free to select and analyse ore samples and write 
exploration reports in any way they choose, for their own internal purposes.  They are also free to rely 
on geological exploration reports written by Austra lian or foreign institutes and mining companies, 
whether qualified or not, for their own internal purposes.  However, for companies listed on the 
Australian (and New Zealand) Stoc k Exchanges there are minimum standards for public reporting of 
geological reports of exploration results and mineral and ore reserves.  These minimum standards are 
embodied in the 2004 Australasian Code for Reporti ng of Exploration Results, Mineral Reserves and 
Ore Reserves.  This Code is commonly referred to as the Joint Ore Reserves Committee (JORC) 
Code.  The JORC Code is designed to underpin investor c onfidence in statements made by publicly listed 
companies.  The Code ensures that investors ar e able to interpret and compare the resource and 
reserve estimates reported by companies.  The Code  does not dictate what tests are undertaken or 
what facilities are used.  The Code only governs th e language that is used to describe the findings 
when they are reported to the ASX and the compet ency of the person who prepared the report.  
 WT/TPR/M/178/Add.1 
Page 190  
 
  The JORC Code requires reports to be signed by a “competent person”.  A “competent person” is 
defined as a Member or Fellow of the Australasian  Institute of Mining and Metallurgy (AusIMM) or 
the Australian Institute of Geoscientists (AIG), or a member of any Recognised Overseas Professional 
Organisation (ROPO).  To be accepted as a "com petent person" under the JORC Code, a Chinese 
geologist can become a member of one of the Aust ralian institutes or of an existing ROPO, or an 
appropriate Chinese professional body c ould apply for recognition as a ROPO. 
 
Question:   
(Paragraph 35)  
 
It is mentioned in the Secretariat Report that th e effective rate of assistance (ERA) for mining was 
virtually zero in 2003/04. It is also indicated that in 2004/05 mining received 5% of total budgetary assistance.   Does it imply that the assistance from the governme nt to the mining sector is increasing? Is such 
assistance available only to local enterprises?   
 
Answer: 
 
The two concepts of effective rate of assistance  (ERA) and budgetary assistance are related but not 
directly comparable measures.  Budgetary assistance is the dollar value of budgetary outlays and tax 
concessions given to industry, such as research and development (R&D) assistance and competitive 
grants.  The ERA to an industry is the percentage ch ange in returns per unit of output to an activity’s 
value-adding factors due to the assistance stru cture (this includes support such as budgetary 
assistance, the effect of tariffs and regulation).  It is possible, therefore, for one of these measures to change without significantly impacting on the other. 
 
Budgetary assistance and the ERA to the Australian mining sector has remained relatively constant 
for some time, with the ERA to the mining sector around zero for the last decade.  Various forms of budgetary assistance are available to all firms and industry sectors, including those 
in the mining sector.  For instance, the R&D tax co ncession is available to both eligible domestic and 
international firms. 
 
Japan:
 
 
Question: 
(Paragraph 34-35)  Could Australia explain rules and regulations con cerning approval and control of foreign investments 
in resources and energy sectors? Ar e there local contents and ot her performance requirements 
imposed on foreign investors by local governments?  Is there a legal framework which allows the central  government to intervene in  the activities of local 
governments concerning mineral and energy devel opment? When doubts or problems arise, 
concerning the rights of mining and development of projects, is it the state government to which the 
Japanese government or Japanese companies should appeal?  
 
Answer: 
 
Under Australia's system of government, the Au stralian and State/Territory Governments have 
separate roles and responsibilities. 
  WT/TPR/M/178/Add.1 
 Page 191 
 
 
  The States and Territories manage and allocate mine ral and petroleum explor ation and development 
rights on their lands ("onshore") and within the first th ree miles of the territorial sea.  In these areas, 
the States and Territories have primary responsibilit y for land administration, the regulation of 
exploration and development opera tions (including environmental,  and occupational health and 
safety) and the collection of royalties on the minera ls produced.  The sole notable exception to this 
onshore arrangement is that the Australian Governme nt owns uranium and other nuclear materials in 
the Northern Territory but, even so, by agreement, the day to day administration of the exploration 
and development of these materials is carried  out by the Northern Territory Government. 
 Aside from nuclear materials in the Northern Terr itory, the Australian Government's jurisdictional 
involvement in resource explorati on and development is limited to resources located beyond the first 
three nautical miles of the territorial sea ("o ffshore").  While these offshore resources are the 
responsibility of the Australian Government, by agre ement, the resources are jointly administered by 
the Australian Government and the relevant Stat e/Territory Government for each offshore area.  
Significant decisions (such as allocation of explorat ion rights and development approvals) are made 
jointly while day to day administration is handled by the adjacent State or Territory Government.  
 More generally, under powers confer red either directly or indirectly by the Australian Constitution, 
the Australian Government sets national policies, including fiscal, monetary, and taxation policy, 
foreign investment guidelines, immigration, comp etition policy, trade and customs, company law, 
international agreements and native title. 
 
The Australian Government's constitutional power s over, for example, trade (exports), trading 
corporations (companies) and external affairs (tr eaties) mean that it may have a veto over some 
resource development proposal or some aspect of it.  For example, any action that is likely to have a significant impact on a matter of national environmental significance is subject to the Australian 
Government's environmental law.  The seven matte rs of national environmental significance comprise 
the offshore marine environment, World Heritage  properties, National Heritage places, Ramsar 
wetlands of international importanc e, nationally threatened species, migratory species and nuclear 
actions.  In the first instance a proponent of a resource expl oration or development proposal should raise any 
doubts or problems with the relevant State or Territory Government. 
 
Question: 
 Can foreign investors, engaging in development, sales, exportation and other related activities 
concerning mineral resources and energy, enjoy National  Treatments? If National Treatments are not 
fully accorded to foreign investors, could Austra lia explain to what extent and in what activities 
National Treatments are given to foreign investo rs, and clarify the areas in which Australian 
companies are given better treatment than foreign investors? 
 
Answer: 
 
While welcoming foreign investment in the mine rals and energy sector, Australia operates a pre-
establishment screening regime of investments, pr eventing it offering national treatment.  However, 
Australia effectively provides national treatment wi th respect to the post-establishment operations of 
investments. 
 
Question: 
 When the Australian authorities make a judgment on  compatibility of a foreign investment with the 
national interest, do they guarantee an opportunity of hearing for foreign investors beforehand?  WT/TPR/M/178/Add.1 
Page 192  
 
  Answer: 
 
Consistent with the principles of natural justice,  should the Australian Government consider that a 
proposal is contrary to the national interest, th e investors would be advised of the grounds for 
reaching this conclusion before a final decision is  taken.  This provides the investors with an 
opportunity to respond to those concerns. 
 
Question: 
 In recent years, the demand for mineral resources in Asian count ries such as China has grown 
rapidly. What are Australia’s policies on exploit ation and supply energy resources to meet the 
growing demand in the ASEAN region? 
 
Answer: 
 It is Australia's objective to be a reliable and co mpetitive supplier of mineral and energy resources to 
customers, both long-standing and new.  The unprecedented increase in global demand for mineral 
and energy resources over the last five years has pla ced pressures on supply.  It is a priority for the 
Australian Government to provide an operating envir onment that is conducive to  investment so that 
supply can readily increase to meet demand.  To this  end, Australia offers social and political stability, 
low sovereign risk, secure property rights, accountab ility of public services, investment facilitation 
(including fast tracking of major projects), sound physical infrastructure, transparent and predictable 
regulatory requirements and an operating envi ronment that welcomes foreign investment. 
 
Question: 
 
Australia and China signed a Nuclear Transfer Agreement and a Nuclear Cooperation Agreement in 
2006. How does the Australian government secure pe aceful uses of uranium for the sake of the 
securities of the Asia Pacific region?   
 
Answer: 
 Australia has a longstanding policy of only selling uran ium to countries that are parties to the Nuclear 
Non-Proliferation Treaty and which have a bilateral safeguards agreement in place with Australia.  To 
further strengthen Australia's safeguards policy, th e Australian Government recently made ratification 
of the Additional Protocol a condition of ur anium supply to non-nuclear weapon states.   
 
On 4 January 2007, Australia and China ratified th e Australia-China Nuclear Transfer Agreement and 
the Nuclear Cooperation Agreement.  The Agreements  are now in force.  Once the list of designated 
facilities for the processing and use of Australian nuclear  materials is agreed to by parties, exports of 
Australian uranium to China could begin.  The tim ing and quantities of exports will be a matter for 
commercial negotiation.  The Nuclear Transfer Agre ement is as stringent as the other 19 safeguards 
agreements already in place which permit the use of Australian uranium for peaceful purposes only.  
Australia has the right to suspend or cancel further transfers of nuclear material should China fail to 
comply with the provisions of the Nuclear Material Transfer Agreement or IAEA safeguards arrangements.  Contracts negotiated between an  Australian uranium producer and a Chinese entity 
must be approved by the Australian Government to  ensure alignment with the list of designated 
facilities.  As well, each and every shipment of uranium requires Australian Government approval. 
 
Question: 
 Some state governments prohibit uranium exploitation now. How are the policies on uranium (exploitation and export) reviewed?"    WT/TPR/M/178/Add.1 
 Page 193 
 
 
  Answer: 
 
The States of Western Australia and Queensland prohi bit mining of uranium; and legislation in New 
South Wales and Victoria prohibits the explorati on and mining of uranium.  In South Australia, 
further uranium mine development is constrai ned by the existing 'no new mines' policy. 
 
The recent bipartisan inquiry by the House of Representatives into the strategic importance of 
Australia's uranium resources has called on states to lift existing bans or restrictions on uranium mining.  
The recent reports of the Prime Minister's Nucl ear Taskforce and the Uranium Industry Framework 
Steering Group have also pointed to the need for states to address policy and legislative impediments to expansion of the uranium mining industry.  
Electricity
 
 
Chinese Taipei:  
 Question: 
(Paragraph 37) 
 We note that the Australian National Electricity  Market (NEM) was established in 1998 to break 
down barriers to inter- and intra-state competiti on in New South Wales, Queensland, South Australia, 
Tasmania, Victoria, and the Australian Capital Territory.   
 
Could Australia please explain why the Northern Territory and Western  Australia did not join the 
NEM? Is there any plan for these two states to join  the NEM in the future, thus setting up a nation-
wide electricity market? 
 Answer: 
 
Due to the significant geographical distance between  Northern Territory and Western Australia and 
the States that make up the NEM, it has been cons idered more economically efficient for Northern 
Territory and Western Australia to supply their own electricity.  While national electricity legislation 
does not preclude these states from joining the national framework, there is no plan at this stage for 
Northern Territory and Western Australia to join the NEM, Western Australia is currently developing 
its own wholesale electricity market.    
Question:
 
(Paragraph 40) 
 In order to create a competitive na tional electricity market, Australia  has made reforms continuously 
in the electricity sector.  To simplify the regulato ry framework for the transmission and distribution of 
electricity, the Australian Energy Regulator (AER) and Australian Energy Market Commission 
(AEMC) commenced operation on 1 July 2005. 
 
Could Australia please help us better understand exa ctly how, under the MOU signed by the AER, the 
AEMC, and the ACCC, the two above-mentioned organizations communicate and cooperate in 
practice when directing and monitoring the Natio nal Electricity Market Management Company 
Limited (NEMMCO)?  WT/TPR/M/178/Add.1 
Page 194  
 
  Answer: 
 
The operational roles of the Australian Energy Re gulator (AER), the Australian Energy Market 
Commission (AEMC) and the National Electric ity Market Management Company Limited 
(NEMMCO) were determined by cross-governmental agreement.  The AER is the national regulator 
in the Australian energy industry and also has ma rket monitoring and enforcement functions.  The 
AER monitors and enforces compliance with the electricity legislation (Law and Rules).  The AEMC 
acts as the industry rule-maker, and makes and ame nds the electricity rules in accordance with a 
specified process.  NEMMCO acts independently of these two bodies and is the system operator of 
the NEM.   
There is an operational split between the AER, AEMC and NEMMCO.  As such, the AER and the 
AEMC do not direct and monitor NEMMCO as part of their day-to-day duties.  However, the AER, in 
accordance with its enforcement role, may occa sionally investigate the actions of NEMMCO.  
Furthermore, the AEMC may make rules that affect the way in which NEMMCO carries out detailed 
market operations.  In doing so, the AER and AEMC act independently of each other.   
 Question: (Paragraph 40)  
The Report indicates that the AER has been resp onsible for market surveillance and regulation 
enforcement in the electricity sector  since July 2005, and is expected to become the sole regulator in 
the electricity and gas market by the end of 2010.   Could the Australian Government please describe 
the progress that has been achieved up to now?  
 
Answers:  
Prior to 1 July 2005, the AER's market surve illance and regulation enforcement functions were 
carried out by the National Electricity Code Ad ministrator (NECA).  NECA was responsible for 
market monitoring, enforcement and rule-making.  The Ministerial Council on Energy considered it 
appropriate to separate the rule-making and enfo rcement functions, and therefore replaced NECA 
with the AEMC and AER.   
 The AER is also responsible for the economic regulati on of parts of the electricity industry.  Since 1 
July 2005 it has been responsible for the regulation of transmission networks.  It will be responsible 
for the regulation of distribution (economic regul ation) and retail (non-ec onomic regulation) after 
these regulatory functions have been transferred fro m State regulators.  The Ministerial Council on 
Energy is in the process of transferring these functions to the national framework. 
 
Question: 
 
Have there been any difficulties in  the integration process?   
 
Answer:  Energy market decision-making and governance struct ures in Australia require the agreement of the 
Commonwealth and all States and Territories on issues of energy market reform.  This requires regular negotiation and consultation betw een the Commonwealth and States.   
 
Question: 
 
How will the AER coordinate with the corresponding aut horities of each state after becoming the only 
national energy regulator?  WT/TPR/M/178/Add.1 
 Page 195 
 
 
  Answer: 
 
In accordance with the Australian Energy Market Agreement, the distribution economic regulatory 
functions of state-based regulators will be transfer red to the AER.  This will ensure a consistent 
framework and approach to the regulation of energy networks.  These reforms are intended to 
centralise economic regulation into one body in orde r to limit the regulatory institutional burden on 
industry in instances where these businesses operate in more than one jurisdiction.  In conducting its 
regulatory functions, the AER can consult with the re levant authorities and industry more broadly.   
 
Japan:  
 
Question: (Paragraph 40) 
 
To what extent does the central government engage  in the establishment and current management of 
NEMMCO?  
 
Answer: 
 
NEMMCO is the independent system operator of  the NEM established by cross-governmental 
agreement.  NEMMCO is jointly funded by the States that make up the NEM.  Each jurisdiction elects a member for the NEMMCO Board.  The Commonwealth Government does not sit on the Board or engage in the day-to-day management of NEMMCO. 
 
Question: 
 According to paragraph 40, page 82 of the Secret ariat report, the AER is required to monitor and 
enforce compliance by NEMMCO with  its obligations under the National Electricity Law and Rules, 
and the NEMMCO functions as the operator and admi nistrator of the wholesale electricity market. 
What is the relationship between the AER and the central government, regarding the regulations 
against NEMMCO?  
 
Answer: 
 
The AER is a Commonwealth-funded statutory body, established as a separate legal entity.  The AER 
carries out its functions in accordance with its obligations under the National Electricity Law and 
Rules.  It operates independently of the Commonwea lth and State and Territory Governments.  This 
includes the execution of its monitoring and enfo rcement functions with regard to NEMMCO. 
 Water
 
 
Chinese Taipei:  
 
Question: 
(Paragraphs 41-43)  The stated overall objective of Australia’s on-going re form programme in this sector is to establish a 
system where water users pay the full cost of th e infrastructure and services provided. In urban areas 
this has been largely achieved, whereas in rural area s a number of inefficiencies remain. For 
example, approximately 20~40% of the water used for irrigation is lost due to leakage and 
evaporation from open channels. 
 WT/TPR/M/178/Add.1 
Page 196  
 
  We would be interested in learning more about whet her differential pricing policies apply to water 
used for irrigation, for manufacturing and by urban consumers?  Answer: 
 In the National Water Initiative (NWI), Australian States and Territories have agreed to bring into 
effect pricing policies for water storage and delivery in rural and urban systems that incorporate full 
cost recovery for water services and provide cons istency in pricing policies across sectors and 
jurisdictions.  The pricing principles agreed in  the NWI deal with the rural and urban sectors 
separately, recognising these sectors start from a very different base, for example, as a consequence of 
different legacies in infrastructure investment.  
 The States and Territories and the Australian Governme nt have prepared stocktakes of water storage 
and delivery charges and water pla nning and management costs in the rural and urban water sectors in 
Australia.  Early indications from the stocktake suggest that differences in approaches between 
jurisdictions and between the urban and rural wa ter sectors are most marked in the areas of: 
 
- recovery of capital expenditure; - tariff structures in the urban water sector; and, - approaches to identifying and recovering the costs of water planning and 
management. 
 
The stocktakes are a first step by the States and Territories and Australian Government to achieve 
consistency in the way water charges are set across jurisdictions.  The stocktakes are available on the 
National Water Commission website at http://www.nwc.gov.au  
 
Question: 
 And, who will bear the cost of the above-mentioned lost water. 
 
Answer: 
 Poor efficiency in the irrigation sector occurs at  different phases in the irrigation delivery and use 
chain.  Who bares the cost of the losses will va ry depending on where the losses occur and may 
impact on individual irrigators and end users, the infrastructure operator (which may be incorporated 
into the overall fixed costs of its operation) the environment and broader community.   
 
The Prime Minister’s National Plan for Water Secu rity (the Plan) (January 25 2007) describes the 
situation as follows:  In an average year irrigated agriculture uses 14,00 0 gigalitres (GL), which is about 70 per cent of all 
water use in Australia.  However, this wate r is not used as efficiently as it could be: 
 
- between 10 and 30 per cent of the water divert ed from rivers into irrigation systems is 
lost before it reaches the farm gate; 
- up to 20 per cent of water delivered to th e farm gate may be lost in distribution 
channels on-farm and around 60 per cent of  water used for irrigation on farms is 
applied using high volume, ineff ective gravity irrigation methods; 
- more than 10-15 per cent of water applied to crops is lost through over watering, 
whereas scheduling tools and observational data could more pr ecisely match water 
application to crop water requirements; and 
- inaccurate measurement of water diversi ons from rivers and water use on farms is 
leading to unintentional and intentional over use.  WT/TPR/M/178/Add.1 
 Page 197 
 
 
  A focus of the Prime Minister’s Plan will be to  invest $A 5.9 billion over 10 years to modernise 
Australian irrigation by improving the efficiency  in water delivery and use.  The proposed 
modernisation programme has four inter-related elem ents, which are designed to alleviate the high 
cost of inefficient water delivery, use and mana gement.  Details of the Plan are available at 
www.pm.gov.au/news/speeches/speech2341.html.  Th e Plan is based on implementing the NWI 
agreed to by the Council of Australian Governments (see above). 
 
Japan:  
 Question: 
(Paragraph 6-8) 
 Water shortage caused by drought is a serious pr oblem, which is also a menace for the agriculture 
industry. How does the Australian government tackle it in both short term and long term? 
 
Answer:  
 
Australia's State and Territory Governments have a number of programmes in place to assist the agricultural industry to deal with immediate wate r shortage problems caused by one of the worst 
droughts affecting Australia in the last 100 years.  Further information about the Australian Government's drought assistance measures can be  found at http://www.affa.gov.au/droughtassist. 
 
In addition to the drought assistance measures, thre e programmes exist which are aimed at addressing 
longer term water management issues.  These complementary programmes —the National Action 
Plan for Salinity and Water Quality, the Nati onal Heritage Trust a nd the National Landcare 
Programme — are designed to deliver natural re source management outcomes that are decoupled 
from farm production. Further information about these programmes is available from the following 
websites:  
- National Action Plan for Salinity and Water Quality (www.napswq.gov.au) - National Heritage Trust (www.nht.gov.au) - National Landcare Programme (www.landcare.gov.au) 
 
In addition to these measures, the National Water Initiative (NWI) aims to increase the productivity 
and efficiency of water use and the health of river and groundwater systems in Australia though 
cooperation between the State and Territory Governme nts and Australian Govern ment.  In particular, 
the NWI encourages a more productive and efficient use of water.  It allows irrigators to purchase and 
sell water as it is needed, giving them flexibility to make decisions about what they grow and when, in 
line with commodity and climatic forecasts a nd other circumstances affecting their businesses. 
 Detailed information about Australia's water re form process can be found at the National Water 
Commission's website at http://www.nwc.gov.au/.  Question:  Please show specific evaluation by Australia of th e impact of the drought on the Australian economy, 
in particular on the export of farm  products, including dairy products. 
 
Answer: 
 
Australia is currently in a severe drought that  has reduced the production of many agricultural 
commodities in 2006-07.  Summer crop production is forecast to be down by around 60 per cent to around 1.9 million tonnes in 2006-07, making it the smallest crop in more than 20 years.  For WT/TPR/M/178/Add.1 
Page 198  
 
  example, in 2006-07, Australia’s rice production is expected to be down by 90 per cent to 106,000 
tonnes, grain sorghum down more than 50 per cent to 996,000 tonnes, and cotton down 58 per cent to 250 000 tonnes.  Similarly, Australia’s winter crop production is al so down by more than 60 per cent to 15.7 million 
tonnes.  Wheat production is estimated to have d eclined by 61 per cent to 9.7 million tonnes in 2006-
07, barley by 62 per cent to 3.7 million tonnes and canola production down by 64 per cent to 513,000 tonnes.  While milk production is estimated to be down by more than 10 per cent to 9.05 billion litres, 
production of other commodities such as beef and sh eep meat has increased as farmers seek to reduce 
stock levels.  In 2006-07, beef a nd veal production is estimated to ha ve increased by 5 per cent to 2.2 
million tonnes and lamb production is estimated to have increased by 2 per cent to 390,000 tonnes.  
Low pasture availability and high feed prices associated  with severe drought are expected to result in 
increased slaughter of cattle and sheep and higher meat production.  In 2006-07, cattle numbers are 
projected to fall by 2.4 per cent to 27.9 million head , while sheep numbers are projected to fall by 4 
per cent to 96 million head.  Despite the considerable drop in production of many agricultural commodities.  Total agricultural 
exports to major trading partners are unlikely to decline significantly for a number of reasons.  For 
example, Australia has a considerable carry-over stock of grain.  In 2006-07, wheat exports are 
forecast to fall by only 16 per cent to 12.7 million tonn es, beef and veal exports are forecast to be up 
by 7 per cent to 952,000 tonnes and lamb exports down by 1 per cent to 144,000 tonnes.  For dairy 
products, exports of cheese are forecast to fall by 9 per cent to 183,000 tonnes, skim milk powder 
down 12 per cent to 160,000 tonnes and butter down by 22 per cent to 64,000 tonnes.  Question:  In particular, does Australia consider current practice in agricultural production to be a cause of this 
issue? What are the measures whic h Australia is taking to promot e sustainable and environmentally-
friendly agriculture? 
 
Answer:  
 
Australia is the driest inhabited continent on ear th.  It has unique land, water vegetation and 
biodiversity resources.  The Austra lian continent supports a wide ra nge of agricultural and forestry 
industries and the way we manage our natural res ources is one of Australia’s greatest challenges. 
 
Drought and associated water shortages are a part of life for Australian farmers.  Australian farmers have been successful in adapting to the inevitable ‘booms and busts’ that occur in agriculture by 
developing flexible farm business plans that assist  in managing the risks presented by changes in 
prices and seasonal conditions.   
The Australian Government however has taken a leadi ng role in the management of natural resources 
and works with the State and Territory governments to promote the conservation and sustainable use 
of Australia’s natural resources through the Natura l Resource Management Ministerial Council.  The 
Council develops national approaches to the con servation, sustainable use and management of 
Australia’s land, water, vegetation and biolog ical resources and oversees natural resource 
management programmes. 
 Australia understands that sustainable use and manage ment of our natural resources is the key to our 
agriculture, fisheries and forestry industries continui ng to generate production and profit.  Evidence is  WT/TPR/M/178/Add.1 
 Page 199 
 
 
  now available that farmers involved in natural r esource management work are reaping productivity 
and conservation benefits and su rviving drought periods better. 
 To date the government has invested more than $A 4 billion in natural resource management through 
the Natural Heritage Trust, the National Action Pl an for Salinity and Water Quality and the National 
Landcare Programme flagship programmes. 
 More information about these programm es may be obtained from www.nrm.gov.au. 
 
Switzerland
 
 
Question:  In paragraph 14 of the section (iii) dealing w ith Assistance under the Agriculture heading, the 
Secretariat’s report mentions the existence of an assi stance in the case of drought. In paragraph 42 of 
the section (iii) dealing with Water, water reform is being described. Could the Australian authorities 
provide information about the agricultural part of this reform and indicate how they intend to achieve 
a rational and sustainable use of resources,  notably of water, in this context? 
 
Answer: 
 Drought assistance measures are being implemented as a response to one of the worst droughts 
affecting Australia in the last 100 years.  Furt her information about the Australian Government's 
drought assistance measures can be found at http://www.affa.gov.au/droughtassist.  
 Regarding water reform more gene rally, through the National Water Initiative (NWI) the Australian 
Government is encouraging State and Territory governments to improve management of water 
resources and to minimise the effects of water shor tages.  The NWI, agreed to by the Council of 
Australian Governments in 2004, aims to increase th e productivity and efficiency of water use and the 
health of river and groundwater systems in Australia.  Elements of the NWI include creating more secure water entitlements, creating the capability to trade 
water quickly and easily, establishing a clear risk assi gnment framework for any future reductions in 
water availability, addressing overallocation and substantially improving water resource accounting 
and planning frameworks.  Full cost recovery pricing is  also an integral part of the total water reform 
package, aiming to provide for more efficient water use, efficient levels of infrastructure utilisation 
and the right investment signals for new infrastructure. 
 
Water trading is another key element of the NWI and encourages more productive and efficient use of 
water.  It allows irrigators to purchase and sell wa ter as it is needed, giving them flexibility to make 
decisions about what they grow and when, in line with commodity and climatic forecasts and other 
circumstances affecting their businesses.  
Detailed information about Australia's water re form process can be found at the National Water 
Commission's website at http://www.nwc.gov.au/.   On the 25th of January 2007 the Prime Minister a nnounced A National Plan fo r Water Security.  The 
Plan is a $A 10 billion package of initiatives desi gned to ensure rural water use is placed on a 
sustainable footing within the next decade by acceler ating the implementation of the NWI.  This will 
significantly improve water management across the na tion with a special focus on the Murray Darling 
Basin, where the bulk of our agricultural water us e takes place.  The Prime Minister’s speech and a 
copy of the Plan can be downloaded at www.pm.gov.au/news/speeches/speech2341.html.   
 WT/TPR/M/178/Add.1 
Page 200  
 
  Question: 
(Paragraphs 41-44)  Given the water crisis in Australia and knowin g that Sydney, for example, has no waste water 
treatment plant, what are the Australian plans to have wastewater cleaning plants and how open are 
Australian markets to other countries' imports of soft and hardware in this field ?   
Answer: 
 
An overarching objective of the National Water Initia tive (NWI) is to encourage water use efficiency 
and innovation in urban and rura l areas, including specific commitments to encourage the reuse and 
recycling of waste-water where cost effective.  All governments are working to develop national 
guidelines to ensure the safe use of recycled wate r for a range of purposes, including for drinking 
purposes.   
Many observers have suggested that the demand fo r non-traditional sources (e.g. recycled water) has 
been inhibited by artificially low or subsidised water prices for traditionally sourced potable water 
(primarily surface water fed dams and groundwater bores).  The NWI commits signatory governments to a range of further water sector pricing reforms.  Clearly, more cost-reflective pricing of traditional 
sources could be expected to increase the attractiven ess of alternative sources such as recycled water 
and desalinated sea water.  
 
The NWI also commits governments to develop prici ng policies for (metropolitan) recycled water and 
stormwater that are congruent with pricing for potabl e water.  The objective here is to ensure that the 
pricing arrangements facilitate adoption of the least cost long-term combinati on of options to balance 
supply and demand. 
 
The Australian Government is also investing in practical onground projects that trial and demonstrate 
innovation in water supply, use and management.  Recently, the Australian Government announced 
that it will provide up to $A 15.75 million (towards a total project cost of more than $A 31 million) 
for the Beenyup Reverse Osmosis Groundwater Replenishm ent Project, the first project of this type in 
Australia.  Details of the project are availa ble on the National Water Commission’s website 
(http://www.nwc.gov.au/). 
 Note: Also, according to the Sydney Metropolitan Wa ter Plan (2006), there were 14 recycled water 
schemes in greater Sydney recycling approximately 15  billion litres of wastewater per year and “This 
recycling volume will almost double with an extra 15 billion litres through new schemes currently 
under construction and coming on line in the next few years.” 
 
Textiles, clothing, and footwear
 
 
Chinese Taipei:  
 Question: 
(Paragraphs 48 & 49) 
 As the Report states, “the effective rate of assist ance (ERA) for the textiles, clothing, and footwear 
(TCF) industry was 24.2% in 2003/04, when the overall ERA for the manufacturing sector was 
4.5%.”   
Our questions are as follows: 
 
Could Australia please elaborate further on the formula used to calculate the ERA?  WT/TPR/M/178/Add.1 
 Page 201 
 
 
  Answer: 
 
Australia's effective rate of assistance concept is  discussed further in the Productivity Commission's 
Methodological Annex A to the 2001-02 Review which is accessible at http://www.pc.gov.au/ 
research/annrpt/tar0102/annexa/index.html  Question:  
Does Australia plan to reduce th e level of ERA in the TCF sector? 
 Answer: 
 
Australia's legislated tariff reduc tions in 2010 and 2015 are expected to reduce the level of ERA in the 
TCF sector. 
 
Question: 
(Paragraph 52) 
 
Would Australia kindly provide us with the deta ils of its TCF structural adjustment programme 
effective from 1 July 2005 for the next ten years  and aimed at supporting industry consolidation and 
labour market adjustment?   
Answer: 
 Details of the TCF Structural Adjustment Program are accessible at www.industry.gov.au/tcf. 
 Turkey:
 
 Question:  According to the Secretariat Report, budgetary assi stance is provided to textiles, clothing and 
footwear industry in Australia. It is further not ed that the assistance to the TCF industry is 
transitional and aimed at facilitating the indus try to adjust to the reduced tariffs. 
 Could the Delegation of Australia further inform us  on the consistency of this sector-based assistance 
with the rules set forth within the WTO Ag reement  of Subsidies and Countervailing Measures? 
We would also like to learn if the notificatio n is made to the Committee on Subsidies and 
Countervailing Measures.  
 
Answer: 
 
The WTO Agreements allow Members to provide assi stance to specific industry sectors.  As such, 
Australian assistance to its TCF sector is consis tent with the WTO Agreement on Subsidies and 
Countervailing Measures.  Australia has notified its assistance to the TCF sector (the latest full 
notification is contained in WTO document G/ SCM/N/123/AUS/Rev.1, dated 23 September 2005).  
Australia also draws Turkey’s attention to the ra nge of questions and responses in relation to TCF 
assistance provided previously by Austra lia in the WTO Subsidies Committee. 
 WT/TPR/M/178/Add.1 
Page 202  
 
  Automotive
 
 Japan:
 
 
Question: (Paragraph 55) 
 
Could Australia explain the prospect for tariff reduction on automobiles, including components and 
parts?   
 
Answer  
 
Australia has legislated to reduce to tariffs on automobiles, including components and parts to no 
higher than 5 per cent by 2010.  Korea:
 
 Question: 
(Paragraphs 5, 24) 
 
Australia temporarily conducts the Automotive Competitiveness and Investment Scheme (ACIS) 
during the term, lowering its customs rate in order to protect the domestic vehicle industry. 
However, as an industry-specific assistance progr am, Korea believes that ACIS violates the WTO 
regulations in that it substantially harms impor ters. Accordingly, ACIS must be modified or 
abolished. Korea hopes that ACIS is improved to enc ourage fair competition. What is Australia's view 
on this? Does Australia have plans to abolish the scheme? 
 
Answer: 
 
In December 2002, the Australian Government announ ced the extension of the ACIS program to 
2015.  In the second stage (2006-10), assistance is capped at $A 2 billion, but will reduce to 
$A 1 billion in the third stage (2011-15).  The WTO Agreements allow Members to provide assistance 
to specific industry sectors.  As such, assistance to the automotive sector provided through ACIS 
program is consistent with the WTO Agreem ent on Subsidies and Countervailing Measures.  
Australia has notified this assistance to the WTO S ubsidies Committee (the latest full notification is 
contained in WTO document G/SCM/N/123/AUS/Rev.1 , dated 23 September 2005).  Australia also 
provided written responses to a range of written ques tions posed about the ACIS program in the WTO 
Subsidies Committee.  
 Mexico:
 
 Question: 
(Paragraph 60) 
 With a view to complementing tariff reductions by promoting firms' competitiveness, participants in 
the Automotive Competitiveness and In vestment Scheme receive quarterly duty credits which can be 
used to discharge customs duty. 
 
What, exactly, are these cred its?  How do they operate?  
  WT/TPR/M/178/Add.1 
 Page 203 
 
 
  Answer:  
 
ACIS duty credits can be used by recipients to  discharge customs duty on subsequent eligible 
automotive imports, or sold or transferred.  The e ligibility criteria for these credits are explained in the 
footnotes to paragraph 60.  More detail on the ope ration of the ACIS program is available at  
http://www.ausindustry.gov.au/content/level3inde x.cfm?ObjectID=75AFC6C0-A9D9-4953-8B4C50 
DE1EA042DB 
  
Question: (Paragraph 62) 
 
Automobiles purchased by the governme nt must be made in Australia. 
 Are there any plans to do away with this requirement?  If so, what is the time-frame?  
Australian government agencies when purchasing vehicles as part of their vehicle fleet or under the 
Executive Vehicle Scheme are required to select vehicles from manufacturers registered as a motor 
vehicle or component producer in the Automotiv e Competitiveness and Investment Scheme that are 
either: 
- made in Australia; or - have an engine capacity of 2000 cc or less. 
 
The Australian Government has no plans to alter this policy.   
Services
 
 
China:  
 Question:  Visa procedures of Australia are cumbersome and time-consuming and create barriers to the 
movement of natural persons which is an import ant mode of trade in services. Chinese companies 
operating in Australia have long been frustrated in  obtaining visas for thei r employees. Complaints 
from them include that it takes at least 2 to 3 mont hs to obtain a visa for an employee. In some cases it 
took even up to 10 months.  
China attaches great attention to this issue and hop es that Australia could, from the perspective of 
promoting and facilitating bilateral trade, place a priority on finding a solution.  
 Answer: 
 
It is true that the average processing time  for PRC applicants for  Temporary Business (Long Stay) 
visas is longer than the service standards that Australi a would like to achieve.  In part, this is due to 
delays on the part of some Chinese applicants in  providing the appropriate documentation.  The 
Australian Government is interested in exploring wa ys to improve this situation with the cooperation 
of the Chinese Government.  
 A large number of Temporary Business Residence visa applications are processed within the service 
standard of six weeks.  In 2005-06 25 per cent of applications were processed within 24 days and 50 
per cent of applications were processed within 7 weeks.  There was a dramatic improvement in 
processing times in 2003-04 when Australia introdu ced e-Visa applications and onshore processing 
for Chinese applicants. 
 WT/TPR/M/178/Add.1 
Page 204  
 
  It is important to note that under Au stralia’s system, a visa grants the ri ght to enter, work and reside in 
a single immigration formality.  This one-stop shop  arrangement is not common in most countries, 
including China.   Improving access to one another’s markets for temporary business entrants is one of the issues under 
negotiation in the Australia-China Free Trade Agr eement and we look forward to continuing those 
discussions.  
Question: 
 
In respect of the Vocational List of Australia  concerning foreign labour, what are the specific 
provisions?  
 Answer: 
 
Australia’s Temporary Business (Long Stay) visa (the 457 visa) aims to provide fast and flexible visa arrangements for skilled overseas employees of Au stralian and overseas businesses.  It is a 
requirement of this visa that positions nominated by employers seeking to sponsor an employee for 
the visa must meet the minimum skill level for the relevant occupation.  
 To enable employers to quickly and easily determin e if the occupation of the position they intend to 
nominate is a skilled occupation, a gazetted list of e ligible occupations is published by the Department 
of Immigration and Citizenship and available on the website: www.immi.gov.au.  This list is called 
the Employer Sponsored Temporary Entry Li st (ESTEL). The ESTEL gives a detailed list of 
approximately 400 occupations that may be approv ed for the 457 visa.  Employers must nominate 
occupations listed in the ESTEL when nominating a pos ition to be filled by an overseas worker.  The 
major groups covered by the ESTEL are:  
- Managers and Administrators 
- Professionals 
- Associate Professionals - Tradespersons and Related Workers. 
 
Columbia:
 
 
Question:  The Report by the Secretariat contains no ref erence to professional services.  Consequently, 
Colombia would appreciate answ ers to the following questions: 
 
How does Australia regulate this sector, specific ally as regards engineering, architectural, 
accounting, health, and educational services?  Answer: 
 
In Australia, professions set their own standards and requirements for admission to practice.  Even where professions are regulated by law, it has genera lly been accepted in Australia that the legislated 
requirements are established on the basis of advice  from the profession concerned.  Adding to this 
quite high degree of autonomy is the fact that higher education programs in professional disciplines 
are generally accredited by the relevant professi onal bodies, which maintain close ties with the 
academic institutions involved. 
  WT/TPR/M/178/Add.1 
 Page 205 
 
 
  Professions in Australia can be divided into four categories.  
 
 Regulated professions . Admission to practise requires registration/licensing under 
state/territory law in all Australian states and territories. 
 
 Partially-regulated professions .  These  fall into three categories: either some states or 
territories require registration/licensing under state /territory law; or some  activities carried out 
by that profession are regulated under state/territory  law; or some activities carried out by that 
profession are regulated under Commonwealth law; and in jurisdictions where no such legal 
requirements exist, these professions are otherwise considered self-regulated. 
 
 Self-regulated professions have no requirement for registration/licensing under law, but clear 
entry requirements to the profession are established by the profession and employment may be dependent upon demonstrati on of eligibility for membership of the key professional body. 
 
 Unregulated professions.  These have no requirement for registration/licensing under law.  
Professional bodies may exist but do not have control over professional standards. 
 Professional regulation has implications for overseas-trained individuals seeking to practise their profession in an Australian jurisdiction on a tempor ary basis or for those seeking to migrate to 
Australia.  Individuals must meet the standard s and requirements for admission required in the 
jurisdiction in which they wish to practise thei r profession, plus meet relevant Australian visa 
requirements.  Australia submitted a paper to th e WTO Working Party on Domestic Regulation on 
professional recognition in Australia (S/WPDR/W/28 of 22 June 2004) which contains examples. 
 
Question: 
 
Is the temporary movement of persons for the provision of pr ofessional services permitted?  Under 
what conditions?  Answer: 
 Australia allows natural persons to enter tem porarily to provide professional services subject to 
employer sponsorship, minimum skill and salary thr esholds.  The skill threshold is regulated using a 
gazetted list of occupations that includes most occupations in the categories of managerial, 
professional, associate professional and trade occupa tions as defined in the Australian Standard 
Classification of Occupations.  This includes ma ny skilled occupations in the engineering, 
architectural, accounting, health and education service sectors.  
 
Question:  What agreements on the recognition of diplomas, pr ogrammes or licences are in  force in Australia?  
 
Answer: 
 
The Australian Government does not have the author ity to enter into mutual recognition arrangements 
on behalf of professions, as professions are regulated (if at  all) at the state/territory government level.  
Peak professional bodies in Australia either set or contribute to formulation of national standards for 
their profession, and are, in some  cases, also assessing authorities fo r skilled migrants seeking entry to 
Australia, they are best-placed to discuss mutual recognition with thei r international counterparts.   
 The Australian Government supports arrangements that seek to improve international professional 
mobility.  It encourages the adoption of fair and tr ansparent assessment prac tices and the development WT/TPR/M/178/Add.1 
Page 206  
 
  of mobility frameworks and recognition arrangements by Australian professional bodies and 
international counterparts. 
 
EC:
 
 
Question: 
(Paragraph 72) 
In the report it is mentioned that in Australia's  existing GATS commitments "postal/courier" services 
are not yet covered. 
Could Australia provide an update on the current legislation on postal/courier services in Australia? 
Answer: 
Australia’s Uruguay Round commitments do not include  commitments on postal and courier services.  
Australia’s postal and courier services sector is s ubstantially liberalised other than postal services 
reserved for Australia Post principally, carriage within Australia of letters weighing less than 250 
grams and the issuance of postage stamps.  Austra lia has no intention of removing Australia Post’s 
right to exclusively supply postal services (the reserved service) either through changes to the 
domestic regulators environm ent or GATS commitments.  
India:  
Question: 
Educational services constitute a growing internatio nal business for Australia. Since the beginning of 
the 2000, the number of Indian students studying in Australia has more than doubled, meaning that 
there are currently some 25000 Indian students en rolled in Australian colleges and universities. 
Will Australia please the tuition fee payable by I ndian students and how is it calculated? Does the 
tuition fees vary depending on the nationality of the student? Will Australia consider giving merit 
cum-needy scholarships to Indian students, given th at a number of Indian students have to take hefty 
loans? 
Answer: 
All international students studying in Australia ar e required to pay the full fee for their individual 
course, which is determined by the edu cation institution providing the course.  
All international students may apply for a wide range  of scholarships offered by the Australian, State 
and Territory Governments; individual education institutions; private organizations or business and 
non-government not for profit organizations.    
Question: 
Mutual recognition of services (which at present is not  recognized in Australia).  For purpose of trade 
in Services between the two countries all Juridical Pe rsons registered in Australia or India should be 
allowed practice irrespective of ownership or control.  
Could Australia please clarify this issue?  Answer: 
Foreign professionals seeking recognition of their qualif ications must be able to demonstrate that they 
meet Australian standards specific to the relevant profession.  Australian professionals must meet the 
same standards.  WT/TPR/M/178/Add.1 
 Page 207 
 
 
  In Australia, professional bodies are the relevant au thority for professional recognition and set their 
own requirements and standards for admission.  Th is is undertaken at the state and territory 
government level.  Although some activities various  professions engage in can be regulated under 
Commonwealth law, the professions themselves are not. 
As professions are self-regulating in some cases,  for example, engineering and accountancy, the 
Australian Government does not have the authority to enter into mutual recognition arrangements on 
behalf of professions, but works closely with the professions to facilitate recognition arrangements. 
Question: 
We have been informed that there is a requirem ent of minimum salary for IT professionals of 
A$ 57,300/- to be paid to IT professionals from forei gn countries.  This represents a 60% increase in 
the minimum salary requirement in four years.  Furth er, this is much higher than the minimum salary 
requirement for professionals in all other categories (A$ 41,850/-).     
Could Australia please clarify the issue and lower this minimum salary requirement?  
Answer: 
Minimum Salary Levels have been in place since 1 July 2001 and have been indexed from time to 
time to reflect general movements in Australian salaries.  On 11 February 2004, a separate minimum 
salary level was set at $A 46,620 per annum fo r Information and Communication Technology (ICT) 
professionals.  The present minimum salary level for ICT professionals is $A 57,300 per annum.  The 
ICT minimum salary level recognises that ICT pr ofessionals in Australia attract higher average 
salaries than in other industries.  On average, salaries paid to ICT professionals in Australia on a 
Subclass 457 visa are much higher than the minimum sa lary level and have been steadily rising.  The 
average salary paid to a Subclass 457 ICT professi onal in 2003-04 was $A 63,70 0; in 2004-05 was $A 
66,300; in 2005-06 was $A 70,100; and in the first six months of 2006-07 was $A 73,300.  
Question: 
There are stringent immigration norms (restric ting movement of businessmen from India in 
Australia). We have been informed  that Australian visa norms/immigration rules are very stringent 
and this is hindering the business travel. The visa procedures for Indians travelling to Australia are 
cumbersome and unsatisfactory.  For instance the Australians require production of Income Tax and 
bank statements even in respect of business visitors, whereas if we were to ask for these in respect of 
Australian visitors they would perhaps site Austra lian privacy laws.  These documents are asked for 
even in respect of repeat visitors. 
Answer: 
The number of business visitor visas granted to Indians has increased from around 12 000 in 2002-03 
to over 23 000 in 2005-06.  The visa approval rate for Indian business visitors is almost 96 per cent 
and is increasing. 
Prior to granting any visitor visa, the Australian De partment of Immigration and Citizenship (DIAC) 
must be satisfied that the applican t intends to comply with the conditi ons of that visa. One of the ways 
in which DIAC can verify the credentials of busin ess persons wishing to visit Australia is to examine 
the financial circumstances of the visa applicant and their business activities.  
Question: 
May we request Australia to info rm the steps it proposes to take to facilitate travel by the Indian 
business community to Australia to promote trade  and investments between the two the countries.   WT/TPR/M/178/Add.1 
Page 208  
 
  Answer: 
 
The Australian Government is keen to facilitate the entry of business visitors from India, and has 
implemented a number of initiatives to improve visa processes:  Business Fast Track (BFT) 
The Australian Department of Immigration and Ci tizenship (DIAC) has signed agreements with 16 
well known IT companies that guarantee 24 hour processing of business visitor visa applications.  BFT companies complete a recommendation sheet which states what checks they have completed on the applicant, what documentation has been sighted and attached and is signed by an authorised 
signatory of the company.  These cases are audited annually.  DIAC plans to extend the BFT program. 
 
Preferred Aussie Specialists (PAS) 
Like BFT companies, Preferred Aussie Specialists ar e travel agents who have been trained by DIAC 
in visa processes and entered into an agreement.  In exchange for vetting potential visa applicants 
agents receive 24 hour processing of busin ess visitor and tourist visa applications.  
 
Service Delivery Partners 
DIAC has engaged a Service Delivery Partner with 9 outlets throughout India in order to provide 
greater access to DIAC information and services.  Electronic visas 
In August 2006, the Australian Government introdu ced an electronic tourist visa service (e676) which 
allows Indian tourists to apply for their visa ove r the internet through selected travel agents.  The 
Government is also working toward a new electr onic visa platform (eVisitors) in 2008, which will 
allow both tourists and business visitors  to apply over the internet.    
 
Question: 
 In February 2001, arrangements were made by the Au stralian Government to allow easier travel of 
IT professionals from overseas countries including India.  On 16 July 2002, the Australian Government announced suspension of priority vi sa processing arrangements for Information and 
Communication Technology (ICT) workers.  It is fe ared that the new visa regime would have an 
adverse impact on movement of IT professionals/personne l, who may be required to visit Australia at 
short notice in connection with their on-site assignm ents on behalf of their Indian software employer 
firms or on behalf of their Australian IT  emplo yer firm(s) as services providers/IT professionals.   
We request Australia to inform of the situation in  respect of priority visa processing arrangements for 
information and communication technology (ICT)  workers/professionals from overseas including 
India.  
 Answer: 
 
A key objective of the Subclass 457 visa programme is to facilitate Australian businesses’ access to 
skilled overseas workers when need ed quickly, whilst maintaining a ppropriate standards and checking 
procedures.  Differentiation in processing priority is not made with respect to particular industries.  Document fraud and false references are a significant problem and necessary checks contribute substantially to longer processing times.  If genui ne, full documentation is lodged with the initial 
application this can contribute to shorter processing times.  In the first six months of 2006-07, the 
median Subclass 457 processing time for Indian nati onals in the ICT industry was 18 days, 10 days 
less than the median for all nationa ls and occupations under Subclass 457.  
  WT/TPR/M/178/Add.1 
 Page 209 
 
 
  Question: 
 The horizontal limitation regarding restriction of fo reign investment subject to “national interest” 
considerations as committed by Australia in its th e GATS schedule of specific commitment is not only 
restrictive but overtly discretionary. 
 
We request Australia to inform what would be c onsidered national interest in  respect of Australia’s 
Mode 4 commitment?.   Answer: 
 
There is no national interest limitation in Australia ’s GATS commitments in respect of mode 4.  Of 
course nothing in the GATS commitments prevents Australia from applying immigration procedures, 
including health, character and national security requirements. 
 
Japan:
 
 Question: 
(Paragraphs 69-71) 
 Construction company licenses 
 
Construction companies must obtain different business li censes in each state to  undertake contracts. 
The coverage of such licenses and their requirement s for approval vary from state to state. Most 
states further require construction companies to s ubmit financial statements to be audited by an 
Australian accounting firm. These procedures are costly, cumbersome and time-consuming for 
companies. Could Australia explain the rationale for maintaining this system? 
 
Answer: 
In Australia, the constitutional responsibility for bu ilding regulation and licensing resides with the 
States and Territories.  The Commonwealth has no c onstitutional powers to regulate these matters and 
has no authority to formally instruct States and Te rritories to do so.  Harmonisation of the licensing 
arrangements for individual licence holders, as opposed to corporate licence holders, is a matter that is currently being examined by Builders Licensing Aust ralia.  A mutual recognition system between the 
States and Territories is in place for individual licence hol ders.  It is also worth noting that local firms 
are exposed to the same system of state-based licensing. 
Question: 
Movement of natural persons Regarding the description “Australia submitted a rev ised services offer in  May 2005, which proposes 
improvements to its existing sche dule of commitments in areas su ch as mode 4”, Japan would like 
Australia to explain further the improvement of measures relating to the movement of natural persons 
from the aspect of domestic regulations. 
Answer: 
Australia’s revised services offer tabled in th e WTO in May 2005 reflected several changes to 
Australia’s domestic regulations that had been implemented since the conclusion of the Uruguay 
Round.  WT/TPR/M/178/Add.1 
Page 210  
 
  Reflecting legislative change, the revised offer rem oved the requirement for Labour Market Testing.  
There is a requirement for CSS applicants to be sponsored. Sponsorship for the CSS category can be 
by Australian-based companies or by forms based in  other countries which have a contract to supply 
service in Australia.  The sponsorship requirement is designed to ensure compliance with migration 
laws, Occupational Health and Safety (OHS) a nd other employment laws  and protect against 
exploitation for service suppliers.  
The offer made specific reference to a comprehens ive list of occupations and professions that had 
been implemented in domestic regulations to in crease the transparency and widen the coverage of 
Australia’s Temporary Business Residence arrangement s.  This list includes relevant skill and salary 
thresholds and is publicly available from the Depa rtment of Immigration and Citizenship website – 
www.immi.gov.au. 
The revised offer included a new “Other” category.  This provides for the granting of full work rights 
for spouses of qualifying temporary entrants who have  been granted stay greater than 12 months.   
Question: 
Legal advisory services 
With regard to Patent Attorney Services, what is  the precise definition of “ordinarily resident”? 
Why is this requirement not scheduled in the Australian WTO services offer? 
Answer: 
Australia does not regulate patent attorneys as lawyers.  It is not a requirement to be a lawyer in order 
to be a patent attorney in Australia.  Therefore Au stralia does not consider patent attorney services to 
be legal services.  Further, Australia has not made any Uruguay Round commitments or tabled any 
offers in relation to patent attorney services.  Consequently, there is no limitation entered in 
Australia’s schedule in relation to patent attorneys.   
To be eligible for registration as a Patent Attorney, section 198(4) of the Patents Act 1990  requires a 
person to be “ordinarily resident” in Australia.  Section 198(7) defines the term as follows: 
(7) For the purposes of this section, a person is taken to be ordinarily resident in Australia if:  
(a) the person has his or her home in Australia; or (b) Australia is the country of his or her permanent abode even though he or she is 
temporarily absent from Australia; 
but the person is taken not to be ordinarily resident in Australia if he or she resides in 
Australia for a special or temporary purpose only. 
 Australia has maintained this requirement given th e need for specialised knowledge of Australian IP 
laws.  We understand that Japan may also have su ch requirements for registration as a Benrishi.   
 
Question: 
 
By the same token, why is the citizenship requirem ent for a migration agent not scheduled in the 
offer? Or is the migration advice services not included in legal services?  
 
Answer: 
 
The requirement is not scheduled because Australia has not made any Uruguay Round commitments or tabled any offers in relation to migration agen t services.  Australia does not consider migration 
agent services to be included in legal services.  WT/TPR/M/178/Add.1 
 Page 211 
 
 
  Question: 
 What is the rationale for the ban on partnership between foreign and local lawyers in SA?  
 
Answer: 
 South Australia does not currently have a foreign lega l consultant category.  Work in this jurisdiction 
is focused mainly on local work.  This situation will change when South Australia implements the 
model laws under the National Legal Profession Project  (see ‘practice of foreign law in Australia’ 
below).  Question:  Is the harmonization process among states evolving? More specifically, is a qualification 
acquired in one state recognized in other states?  
Answer: 
 
The National Practising Certificate Scheme has ma de it unnecessary to have a practising certificate in 
each State or Territory where the lawyer has a prac tising certificate from another State or Territory.  
 The National Practising Certificate Scheme initiate d by the Law Council of Australia (the peak 
federal legal professional body) in 1996 and endor sed by the Standing Committee of Attorneys-
General provides for lawyers entitled to practise in one State or Territory to practise in another 
without a practising certificate in the latter jurisdic tion.  It also negates the need to incur costs 
associated with registration in the latter jurisd iction under the mutual recognition scheme.   
 
The national practising certificate scheme operate s in every State and Territory, but has been 
superseded in jurisdictions which have implem ented the model reforms which are described under 
‘practice of foreign law in Australia’ below.  Details on Australia’s regime
 
 Practice of Foreign Law in Australia 
 
Australian government policy is to ‘encourage and fa cilitate the internationalis ation of legal services 
and the legal services sector by providing a framework  for the regulation of the practice of foreign law 
in Australia by foreign lawyers as a recognised aspect  of Australian legal practice’.  This policy has 
been adopted by the Standing Committee of Atto rneys-General which is comprised of the law 
Ministers of the Australian Government and all Au stralian States and Territories.  The particular 
foreign lawyer regulatory framework being adopt ed in Australia is to provide a uniform 
comprehensive approach based on the limited licensing model advanced by Australia in the WTO 
GATS negotiations.  Under this model, foreign lawyers are able to: 
 
- practise foreign law (home-country, third- country and international law) without 
having to undertake an unnecessarily burden some process to meet admission criteria 
for the practice of host-country law in order to practise foreign law; 
- have the freedom to voluntarily enter in to commercial association and partnership 
with host-country lawyers and law firms; and 
- have the right to use their own firm name. 
 
Access provided to foreign lawyers does not generally ex tend to providing them with a right to appear 
before courts on behalf of client s.  However, in addition to providing legal advisory services in WT/TPR/M/178/Add.1 
Page 212  
 
  foreign law generally, they are permitted to provide legal services, including appearances, in relation 
to arbitration proceedings, conciliation, mediation a nd other forms of consensual dispute resolution. 
 The Australian, State and Territory governments have  been working together for a number of years on 
a National Legal Profession Project and have agreed to a set of model laws to form the basis for 
consistent regulation of the legal profession acr oss all Australian jurisdictions.  The Bill and 
Regulations are available at:  www.lawcouncil.asn.au (Model Reforms).  While the regulation of legal 
practice is a responsibility of the States and Territori es, the creation of a single legal services market 
will allow for nationally consistent  regulation gove rning admission, professional standards, discipline 
and the administration of legal practices generally.  The States and Territories have undertaken to pass 
legislation based on the model laws and to  maintain uniformity into the future. 
 Ministers are assisted in this project by a work ing party of officials from all jurisdictions and 
representatives of the Law Council of Australia, whic h monitors implementation of the model laws 
and brings forward proposals for amendments where necessary. 
 
Under the model laws foreign lawyers have a numbe r of options for practice in Australia, including: 
 
- seeking to be admitted as an Australian legal practitioner - taking advantage of ‘fly-in fly-out’ provisi ons to practise foreign law on a short term 
basis without the need for registration, and or 
- seeking to be registered as a foreign lawyer. 
 
To date New South Wales, Victoria and Queensla nd have commenced legislation based on the model 
laws.  This represents over 80 per cent of the Aust ralian legal services market.  It is expected the 
remaining States and Territories will introduce their legislation this year. 
 
When these model provisions are adopted by all Australian States and Territories, it will further 
enhance the current hospitable foreign lawyer re gulations in Australia by creating a nationally 
consistent system governing the entitlements of fore ign lawyers to practise foreign law, including the 
law of their home country, in Australia.  Practice of Australian Law 
 
There are no citizenship or nationality requirement s to gain admission to practise in Australia.  
Therefore, subject to admission requirements, a fore ign lawyer can practise Australian law, including 
appearance before courts, in the same way as an Au stralian lawyer.  Admission to practise Australian 
law is based on the capacity to satisfy three elements: 
 
1. Knowledge (academic) requirements – generally, a tertiary academic course 
including 11 areas of legal knowledge specified in the Australian Uniform Admission Rules (generally a four year degree, or a three year degree for those with a prior 
degree) or such course of studies resulti ng in areas of knowledge recognised in an 
Australian jurisdiction. 
2. Practical legal training requirements – completion of an approved practical legal 
training course and/or articles of clerkship that typically would cover a period from six months to one year.  
3. Suitability requirements – person must be  a fit and proper person for admission as 
determined by the Supreme Court or cer tifying body of the relevant State or 
Territory. 
 Accordingly, a Japanese lawyer can gain admission to practise Australian law by satisfying the 
requirements identified in the above three areas.  For foreign qualified lawyers from common law  WT/TPR/M/178/Add.1 
 Page 213 
 
 
  jurisdictions, satisfying the academic requirement s for admission would be much easier than for 
lawyers from a civil or other legal system as they would only be required to complete a few Australia-
specific subjects.  Australia’s International Legal Services Advisory Council (ILSAC) www.ilsac.gov.au has prepared a 
research paper on admission to domestic practice of overseas qualified lawyers, particularly in terms 
of uniformity of process between States and Territories and transparency.  The paper and its recommendations will be considered by the Australia n Standing Committee of Attorney-Generals in 
the first half of 2006.  Question:  Accounting, auditing and book-keeping services 
 
Why are auditors and liquidators limited to natural persons? What is the rationale for the 
requirement that at least one equity partner in a firm must be a permanent resident?  
 
Answer: 
 
Auditors
 
 It is possible to establish an ‘authorised audit company’ to conduct audits under the Corporations Act 
(section 1299A).  However, the directors of the company must all be registered company auditors and the shareholders of the company must be individu als (that is, natural persons) and the majority of 
shareholders must be registered company audito rs (section 1299B).  ASIC may refuse to register 
someone as a company auditor if they are not a resident (section 1280(4)) and ceasing to be a resident may result in an individual being disqualified ( section 1292(1)).  These requirements exist to facilitate 
enforcement of the requirements.  Penalties have a stronger deterrent affect on natural persons and are 
easier to enforce on permanent residents.    
 
Liquidators
 
 The requirement that liquidators are natural pers ons relates to disciplinary measures that may be 
applied to registered liquidators and official liqui dators.  Disciplinary measures such as fines, banning 
and imprisonment often have a reduced  deterrent effect when applied to  a body corporate compared to 
application of the same penalties to a natural person. 
 
Question: 
 
Media  
In this sector, all investment proposals by foreign persons require prior approval. Please provide the 
rationale for sustaining the regulation and rationale.  
Answer:  
Australia's foreign investment screening regime is premised on the assumption that foreign investment 
is beneficial to Australia.  Particular restric tions, including limits on equity participation, are 
maintained in a few sensitive ar eas - such as the media, where foreign investment generates 
community concern.  The policy provides for forei gn investments to be approved or in some cases 
approved subject to particular conditions designed to protect the national interest. 
 WT/TPR/M/178/Add.1 
Page 214  
 
  Question: 
 Distribution Services 
 
There is a restriction on commission agents’ services on the sales of food products and wholesale trade services of agricultural products.  Could Aust ralia explain the rationales for such restrictions? 
 
Answer: 
 
Australia’s domestic distribution services sector is relatively open.  Federal, state and territory and 
local governments regulate the activities of the dist ribution sector.  Australia reserves the right to 
adopt or maintain any measure with respect to whol esale and retail trade services of tobacco products, 
alcoholic beverages, or firearms. 
 
Question: 
 Is there any restriction for foreign distribut ors of automobiles to  provide services? 
 
Answer:  
Australia's revised offer covers CP C61112 (retail sales of motor vehicles). 
 
Question: 
 
Education services 
 
Japan notes further, that the ESOS Act serves to  impose residency requirement on the providers of 
education and training services to overseas students. Please explain whether Aust ralia is prepared to 
relax these limitations.   
 Answer: 
 
One of the objectives of the ESOS Act  is to provide consumer pr otection and tuition assurance to 
overseas students studying in Australia.  The residenc y requirement is designed to ensure that the 
protections in the ESOS Act  are effective and that appropriate compliance and enforcement can be 
carried out when required to maintain Australia's  reputation as a preferred destination for a quality 
education and training experience.  Question:  
Insurance and insurance-related services 
 With regard to the life insurance services, why is approval of non-resi dent life insurers restricted to 
subsidiaries?  
 
Answer: 
 
This requirement was introduced in a context of  major prudential reform  which saw, among other 
things, the establishment of new, technically deta iled liability valuation and capital requirements, and 
detailed requirements in respect of the equitable allocation of company profits (Surplus) between 
shareholders and policyholders.  In view of th ese reforms (the details of which were innovations  WT/TPR/M/178/Add.1 
 Page 215 
 
 
  somewhat unique to Australian practice) it was cons idered that satisfactory prudential supervision 
could best be achieved where the life comp any is an Australian incorporated entity.  
 
Question: 
 
Recreational, cultural and sporting services 
 
Australia has reserved the right to adopt or mainta in any measure with respect to the creative arts, 
cultural heritage and other cultural industries includi ng, inter alia, entertainm ent services, libraries 
and archives. Japan would like to have a more detailed explanation and/or clarification on the 
reserved rights.    
 Answer: 
 
The Australian Government reserves the right to pr ovide a broad range of support measures in those 
areas which underpin its key cultural policy objective to develop a rich and stimulating cultural sector 
which reflects Australian identity, character and cultural diversity.  
Australia’s support for cultural activities has the tw in objectives of enabling arts organisations and 
practitioners to achieve excellence in their art form while enhancing the community’s access to 
cultural activities and collections.  Market forces alone are rarely sufficient to allow cultural organisations and individuals to be fully 
self-sufficient.  This is true for the cultural sect or worldwide, but in Australia’s demographic and 
geographic circumstances it is particularly the case.  
 
Question: 
 
Research and development services 
 Australia makes commitment in R&D services only on social science and humanities.  What is the 
rationale for the limitation?  
 Answer: 
 
The Australian Productivity Commission has recently  issued a report on the economic impact of 
public support for science and innovation.  The an alysis covers all key elements of the innovation 
system, including research and development, taking into account interaction with private support for 
science and innovation.  The Government has yet to respond to the report.  Question:  Packaging services 
 
Japan regards packaging services as crucial to manufact uring sectors.  In this regard, Japan would 
be grateful if Australia would provide informa tion on possible limitations in this sub-sector. 
 Answer: 
 
No barriers exist (apart from general Foreign Investment Review Board and Corporations Law 
regulations) to foreign entry into the packaging services sector in Australia.  This sector is under 
consideration by the Australian Government for in clusion in a revised GATS offer in due course. 
 WT/TPR/M/178/Add.1 
Page 216  
 
  Mexico:
 
 Question: (Paragraph 76)  
The Thailand-Australia Free Trade Agreemen t takes a positive-list approach to scheduling 
commitments on services, while th e agreements concluded with Singapore and the United States use a 
negative-list approach. 
 
On what reasons or criteria does Australia base its decision on the approach (positive or negative) to 
be adopted in its negotiations on services?  
Answer: 
 
Australia’s preference is for a negative list appro ach as it tends to result in more comprehensive and 
liberalising services commitments, enhanced tran sparency and better domestic and international 
governance structures.  A positive list can be compre hensive in coverage and deliver the same net 
result as a negative list, but this outcome via a positive list is generally harder to achieve.  
 
Pakistan:
 
 
Question: 
 In their services horizontal commitments no equity limitation is recorded while in national treatment 
it is stipulated that at least two of the directors mu st be ordinarily resident in Australia even in case of 
100%  ownership in all sectors across the board. What  is the rationale for such a limitation? Is there 
any time-frame for doing away with this?  
Answer: 
 
Under Australian Corporations Law at least two dir ectors of a public company must be ordinarily 
resident in Australia to ensure appropriate accountab ility and liability.  Ordinarily resident is not the 
same as citizenship.  There is no timeframe for doing away this requirement. 
 
Question:  Australia’s revised offer in Mode 4 of Services is appreciated as one in which efforts have been made 
to cover developing countries dem ands. The coverage states that ma rket access recorded is to the 
extent of the list of gazetted occupations and their immigration website gives the lists, which include 
professional services covering most sectors, though not fully, as this is a positive list approach. However, the requirement of sponsorship as well as requirement of contract in their revised offer, 
made during the period under review, lack clarity . Both ensure that a temporary person has 
legitimate means of support and some one is responsible  for the stay. In other words, a person in the 
possession of a valid job contract is as good as sponsored or vice versa. Would the Australian 
delegation explain the difference between a valid job contract that includes terms and conditions, 
salary package and duration of job and a ‘sponsorship’ in the context of a temporary service provider?   
 
Answer:  
Sponsorship is the first of 3 steps in the Subc lass 457 programme (sponsorship, nomination and visa).  
The sponsorship process allows the Australian Depart ment of Immigration and Citizenship (DIAC) to 
check that the business is actively a nd lawfully operating, that they would be directly employing the  WT/TPR/M/178/Add.1 
 Page 217 
 
 
  overseas workers and that they are able to meet  their responsibilities under Australian law.  These 
responsibilities are described in a series of undertaki ngs that the business must make for sponsorship 
to be approved.  Essentially, th ese undertakings reinforce workpl ace and other laws that operate 
equally for overseas and Australian workers.  Th e undertakings also provide important minimum 
protections for overseas workers, such as the minimum salary level.  
 
Sponsorship arrangements importan tly allow DIAC to check that the employer is meeting their 
responsibilities under Australian law following the arri val of the overseas worker.  Where the business 
is found to be in breach of their sponsorship undert akings, DIAC can take action against the sponsor 
by cancelling their sponsorship and/or preventing them from accessing the programme for a period up 
to 5 years.  Other penalties could also apply.  
 Sponsorship is distinct from the standard cont ractual process between employer and employee in 
Australia.   Financial services
 
 
China:  
 Question:  
Australia allows for mixed financial services.  
 Could Australia please share with Members its exp erience in how financial institutions engaged in 
mixed services are administered and supervised?  
Australia has been supporting and encouraging financial innovations.  
 Could Australia please introduce how the new financ ial services emerged in the domestic markets are 
licensed and supervised?  It has always been difficult for regulatory authority  to monitor and supervise cross-border delivery of 
financial services .  
 Could Australia please introduce its regulato ry framework and experiences in this respect? 
 
Answer: 
 
Australia considers that the functional approach to regulation, combined with the Council of Financial 
Regulators, aids in the facilitation and regulation of in stitutions that operate in more than one part of 
the financial sector and adapts more readily to mark et developments than an institutional approach.  
While this may mean that an institution could be s ubject to regulation by two agencies, each of the 
regulators focuses on different aspect of  a financial institution’s business. 
 
Prior to 1998, Australia’s regulatory regimes was in stitutionally based (e.g. separate regulators for 
insurers and banks) and undertaken by a variety of Commonwealth and State regulatory agencies.  
This structure had resulted in functionally simila r institutions, such as banks, building societies and 
credit unions, which all offer deposits, being subject  to different regulation.  It also involved 
significant duplication of resources and did not provide a sound basis for regulating financial 
conglomerates.  In 1996, the Government commissioned the Financial System Inquiry (Wallis Inquiry) to make recommendations on regulatory arrangements that w ould respond to the developments and regulatory WT/TPR/M/178/Add.1 
Page 218  
 
  issues arising in the post-deregulation period and ensure an efficient, responsive, competitive and 
flexible financial system.  The Wallis Inquiry’s key recommendation was for fina ncial sector regulation to  be brought under the 
Commonwealth and based on functional objectives.  This included establishing a single prudential 
regulator, the Australian Prudential Regulation Au thority (APRA), for authorised deposit-taking 
institutions, insurers and superannuation entities.   The Australian Securities and Investments 
Commission (ASIC) became responsible for consum er protection and market integrity issues across 
the financial sector.  The Reserve Bank of Australi a (RBA) remained the institution responsible for 
systemic stability and payments (See figure 1). 
 
Figure 1:  Key regulatory agencies in Australia
Reserve Bank of 
AustraliaAustralian Securities and 
Investments CommissionAustralian Prudential 
Regulation Authority
Key 
roles▪  Market integrity
▪  Consumer protection
▪  Corporations▪  Prudential regulations of:
    -  deposit taking institutions
    -  life and general insurance    -  superannuation▪  Monetary policy
▪  Systemic stability▪  Payments
    system
    regulation Payments 
System
Board
 
 
The Government implemented the new regulatory st ructure in 1998.  To effectively perform their 
role, the regulators were given a clear charter of  objectives with accountabilities laid out in their 
enabling legislation.  Responsibility for the opera tional or day-to-day supervision of financial 
institutions and markets lies with the regulators, while accountability for the broad framework for the 
regulation of the financial sector rests with the Federal Government.   
 
APRA is responsible for:  
- licensing prudentially regulated entities; - conducting ongoing prudential regulation of licensed entities; - failure management, including acting in  the interests of depositors, insurance 
policyholders and super fund members in the event of financial difficulties being 
experienced by prudentially regulated entities; and  
- responsibility for collection of all financ ial sector data to reduce the burden on 
industry of responding to multiple agencies.  AP RA uses the data to assist it in the 
prudential regulation of bodies in the fina ncial sector, the RBA for its financial 
stability and monetary policy functions and the Australian Bureau of Statistics (for 
national statistical publications). 
 ASIC regulates:  
- Australian companies, including registration and reporting; 
- financial markets, such as stock and futures exchanges; 
- financial services organisations; and  WT/TPR/M/178/Add.1 
 Page 219 
 
 
  - professionals who deal and advise in i nvestments, superannuation, insurance, 
deposit-taking and credit. 
 The Council of Financial Regulators was also esta blished to contribute to the efficiency and 
effectiveness of financial regulation by pr oviding a high-level forum for co-operation and 
collaboration among its members.  Its membership  comprises the head and a deputy from the RBA, 
APRA, ASIC and Treasury.    The Council operates as an informal body in which me mbers are able to share information and views, 
discuss regulatory reforms or issues where responsibiliti es overlap and, if the n eed arises, co-ordinate 
responses to potential threats to financial stability .  The Council also has a role in advising the 
Government on the adequacy of Australia’s fina ncial system architecture in light of ongoing 
developments.  These arrangements provide a flexible, low-cost appr oach to co-ordination among the main financial 
regulatory agencies.  The Council is non-statutory an d has no regulatory functions separate from those 
of its members.  The regulatory agencies also have a number of othe r arrangements in place to facilitate cooperation.  
These include Memorandums of Understanding to facilita te information sharing between the agencies 
and regular coordination meetings.   
 
The ability of financial institutions to provide more  than one type of business and the facilitation of 
innovation in the financial sector have also been facilitated by:  
- legislation that allows the establishment of non-operating holding companies for 
banks and allows these holding companies to own more than one bank or other 
licensed entities; 
- APRA’s risk-based approach to pruden tial supervision, which places emphasis on 
prudentially regulated institutions devel oping and implementing risk management 
plans, rather than placing strict prohibiti ons on the activities of prudentially regulated 
entities; and 
- streamlining the process of licensing with ASIC through the Financial Services 
Reform Act.  This legi slation harmonised licensing, disclosure and conduct 
framework for all financial products, markets and service providers.  It is designed to develop a more efficient and flexible re gime for financial products and markets 
within an integrated framework. 
 
Question: 
 Industrial and Commercial Bank of China (ICBC) es tablished its representative office in Sydney in 
June 1999, and applied fo r changing the office in to a branch  in February 2000. Since 2005 major 
reform steps have been taken by ICBC, which have tr ansformed it into a joint stock limited company 
listed now both in Shanghai and Hong Kong, China. Th is has enabled ICBC to meet the regulatory 
criteria and standards in Australia.   What specific steps will Australia take to res pond positively to the ICBC branch application? 
 
Answer:   
 
Foreign deposit-taking institutions  (including foreign banks) are pe rmitted to operate in Australia 
through a locally incorporated authorised deposit-taki ng (ADI) subsidiary or an authorised branch.  A 
foreign bank can operate both a locally incorporated subsidiary and an authorised branch at the same WT/TPR/M/178/Add.1 
Page 220  
 
  time in Australia.  The prudential requirements for a foreign owned locally incorporated subsidiary 
are broadly equivalent to those applied to locally owned ADIs.  Since a foreign owned branch is not subject to the depositor protection provisions of Australia’s 
Banking Act 1959  and its solvency is not subject to dir ect oversight by the Australian Prudential 
Regulation Authority, foreign owned branches ar e not permitted to accept ‘retail’ deposits in 
Australia.  If a foreign bank wishes to operate in the retail de posit market in Australia, it is required to seek 
authorisation as a locally incorporated subsidiary to do so.  The rationale is to protect retail depositors 
through Australia’s depositor preference provisions a nd direct APRA supervision, which also apply to 
Australia owned ADIs.    Foreign ADIs (as opposed to foreign bank locally-inc orporated ADI subsidiaries), consistent with 
their branch status, are not subject to local capital or local large exposure requirements.  This enables 
them to trade more effectively as branches. 
There are no current plans to eliminate this measure.  The ICBC, like any other bank, is free to lodge an application with APRA which will be assessed 
against APRA's standard licensing criteria.  All applications are considered promptly and in 
accordance with transparent prudential and regulatory standards.  Chinese Taipei:
 
 
Question: 
(Paragraph 82)  
As indicated, foreign banks may operate in Australia  through locally incorporated subsidiaries and/or 
authorized branches; although branches are not s ubject to minimum capital requirements, they are 
not permitted to accept initial deposits of less than $A 250,000 from Australian residents and non-
corporate institutions. 
 
It would be appreciated if Australia could please elaborate further on its rationale for maintaining the 
above-mentioned measure, and advise us as to whet her there are plans to eliminate the measure? 
 
Answer: 
 Foreign deposit-taking institutions  (including foreign banks) are pe rmitted to operate in Australia 
through a locally incorporated authorised deposit-taki ng (ADI) subsidiary or an authorised branch.  A 
foreign bank can operate both a locally incorporated subsidiary and an authorised branch at the same 
time in Australia.  The prudential requirements for a foreign owned locally incorporated subsidiary 
are broadly equivalent to those applied to locally owned ADIs.  
Since a foreign owned branch is not subject to the depositor protection provisions of Australia’s 
Banking Act 1959  and its solvency is not subject to dir ect oversight by the Australian Prudential 
Regulation Authority, foreign owned branches ar e not permitted to accept ‘retail’ deposits in 
Australia.  
If a foreign bank wishes to operate in the retail de posit market in Australia, it is required to seek 
authorisation as a locally incorporated subsidiary to do so.  The rationale is to protect retail depositors 
through Australia’s depositor preference provisions a nd direct APRA supervision, which also apply to 
Australia owned ADIs.     WT/TPR/M/178/Add.1 
 Page 221 
 
 
  Foreign ADIs (as opposed to foreign bank locally-inc orporated ADI subsidiaries), consistent with 
their branch status, are not subject to local capital or local large exposure requirements.  This enables 
them to trade more effectively as branches.  There are no current plans to eliminate this measure. 
 
Columbia:
 
 Question:  
The contribution of financial services to GDP was 7.8 per cent in 2005/06, up from 7.5 per cent in 
2001/02 (Table I.2).  Australia's financial services se ctor is based on three main institutional groups:  
authorized deposit-taking institutions (ADIs), wh ich include banks, building societies, and credit 
unions;  non-ADI financial intermediaries, includi ng money market corporations, finance companies, 
and securitization vehicles;  and funds managers and insurers, including life and general insurance 
companies, superannuation and approved deposit funds (ADFs) (Table IV.3). 
 How do you explain the increase in the contri bution of the financial sector to GDP? 
 Answer: 
 Australia’s financial sector has been one of the fastest growing industry sectors in recent times and 
has outpaced overall GDP growth.  This has been built on factors such as the rapid growth in 
Australia’s compulsory superannuation (pension f und) savings and Australia’s open, best practice 
regulatory environment.  In particular, Australia ’s open approach to investment and efficient 
principles-based regulatory approach has contributed to a strong, sophisticated and innovative 
financial system which has grown to meet changi ng demand for financial servi ces.  Similar ‘financial 
deepening’ trends are also evident in many ot her economies as growth in the demand for financial 
services outpaces GDP.  
 
Question: 
 
Life insurance companies are supervised by APRA und er the Life Insurance Act 1995.  Australia has 
no public life insurers.  Superannuation business has th e largest share of life insurance companies' 
assets, accounting for 89 per cent as at 30 June  2006, and around 90 per cent of premiums in 
2005/06.  Around 22 per cent of all superannuation asset s are held in life insurance policies as at 
30 June 2006. 
Were there, in the past, any public life insurers?  If so, what are the reasons behind the current 
situation, i.e. no public life insurers? 
 
Answer 
 
Public life insurers have previously been  owned and operated by state governments 
and were privatised in the 1990s.  An example was the New South Wales Government Insurance 
Office (GIO) which came into existence in 1926.   Following the enactment of the Government 
Insurance Office (Privatisation) Act 1991, GIO was priv atised by way of a public float.  Today, GIO 
is a wholly-owned subsidiary of Suncorp-Metway Ltd.  The non-existence of public life insurers in 
the current market is a product of the trend towa rds privatisation of government-owned enterprises 
and the demutualisation of the Australian life insurance industry in the 1990s.  
 WT/TPR/M/178/Add.1 
Page 222  
 
  Question: 
 As at December 2005, there were 133 private genera l insurers in Australia, of which 112 are direct 
insurers and 21 are reinsurers.  They are prudentia lly supervised by APRA under the Insurance Act 
1973.  The general insurance sector is also highl y concentrated, with the top three groups accounting 
for 45 per cent of total industry assets, and the top ten representing 61 per cent of total assets.  There 
are also 14 public general insurers in Australia:  not subject to th e Insurance Act nor regulated by 
APRA, they are regulated by state level legislation. According to the above paragraph, public general insurers are not subject to the Insurance Act or 
regulated by the APRA.  Does this mean that th e requirements for setting up such companies are 
different from the requirements for private companies?  
Answer: 
 
Yes.  Most public general insurers are state b ased insurers established and regulated under state 
legislation.  As a result they are subject to diffe rent requirements when setting up than private general 
insurers, who are regulated by APRA under the Insu rance Act.  The requirements to set up a public 
general insurer will vary depending on which state they are established in and under what state Act.  
Generally, most offer only workers’ compensation and/or compulsory third party motor vehicle 
insurance.  EC:
 
 Question: (Paragraph 84)  
The revised prudential standards and guidance notes are applicable to all authorized deposit taking 
institutions (ADIs) since 1 July 2006.  In this respect, could Australia elaborate on th e major changes relevant for foreign service suppliers? 
 Answer: 
 
The Australian Prudential Regulation Authority upda ted its prudential standards and guidance notes in 
July 2006 to reflect the adoption of International Financial Reporting Standards (IFRS).  The revised 
standards de-couple the definition of capital instru ments eligible for Tier 1 capital from Australian 
accounting standards and bring APRA's approach to  innovative capital instruments into line with 
international practice. The revised standards al so de-couple the assessment of securitised assets for 
capital adequacy purposes from the acco unting treatment of these assets.   
 Australia’s capital adequacy standards apply equa lly to all locally incorporated ADIs, including 
locally incorporated subsidiaries of foreign banks.   
 
Question: 
(Paragraph 90)  As stated in the report, APRA is strengthening its prudential requirements for general insurance 
companies with a view to providing a clearer pict ure of reinsurance contracts, including annual 
disclosure requirements, business plans and prior approval requirements.  
 In this respect, could Australia inform about the recent Australian practice associated with 
application of such requirements? Could Australia clarify whether there is a difference in treatment 
between domestic and foreign investors and between foreign investors and investors from the US?   WT/TPR/M/178/Add.1 
 Page 223 
 
 
  Answer: 
 
In February 2006, APRA released a prudential st andard and an associated non-binding prudential 
practice guide on reinsurance managements for authori sed general insurers.  This new standard came 
into effect from 1 October 2006. 
 
The standard aims to ensure that all general insu rers authorised under the Insurance Act 1973 have in 
place a specific reinsurance management framewo rk to manage the selection, implementation, 
monitoring, review, control and documentation of its reinsurance arrangements.  The prudential 
standard includes requirements that a general insurer must: 
 
- have in its reinsurance management  framework a documented Reinsurance 
Management Strategy (REMS), sound re insurance management policies and 
procedures and clearly defined mana gerial responsibilities and controls; 
- submit its REMS to APRA on an annual  basis and resubmit the REMS when any 
material changes are made; 
- submit a reinsurance arrangements statemen t detailing its reinsurance arrangements to 
APRA at least annually; and 
- submit to APRA an annual reinsurance declaration. 
 The standard aims to provide consistent treatment for domestic and foreign insurers.  However, where 
appropriate, minor adjustments have been made to reflect the different corporate structure and risk 
profile of a foreign insurer.  For example, a foreig n insurer, as well as any insurer that is part of a 
corporate group, must in its REMS provide inform ation regarding the linkages between its local and 
group reinsurance arrangements.  
No distinction was made between a US insurer and other foreign in surers with respect to this 
prudential standard. 
 
Question: (Paragraphs 99-103)  
The WTO Secretariat's report refers to assistance prov ided through the tax system as well as grants 
and concessional loans. One of the sectors benefiting from this support is the financial sector.  
 Does Australia have specific provisions to help banks in difficulties? If not, does the state normally 
intervene to prevent failure? If so , how? Where there many such cases in the recent past?  Does 
Australia have specific provisions for banks – for example, is it normal that banks receive guarantees 
or financing by the state?  Answer: 
 
The Australian Prudential Regulation Authority (APR A) has a broad range of powers to manage the 
potential failure of an authorised deposit-taki ng institution (ADI) including the power to give 
directions ensuring the protection of depositors’ inte rests, the power to assume control of an ADI in 
certain circumstances, the power to transfer an ADI’s business under the Financial Sector (Transfers 
of Business) Act 1999 and the power to apply to the Federal Court for an ADI to be wound up. 
 
As the institution in charge of financial stability and monetary policy, the Reserve Bank of Australia 
(RBA) also is Australia’s lender of last resort  (LOLR).  The RBA’s mandate to uphold financial 
stability does not equate to a guarantee of solven cy for financial institutions.  In exceptional 
circumstances, however, the RBA may act to help  minimise the costs of systemic financial 
disturbances.  In responding to such an event, th e RBA may use its balance sheet to provide liquidity WT/TPR/M/178/Add.1 
Page 224  
 
  to the financial system.  It does so, wherever possibl e, by making funds available to the market as a 
whole through its domestic market operations.  Th e Bank would lend directly to an illiquid deposit-
taking institution authorised by APRA only if it was of  the view that the failure of the institution to 
make its payments could have serious  implications for the rest of the financial system.  In principle, 
the RBA may also be willing to consider appli cations for emergency liquidity support from non-
APRA supervised institutions that have been prov ided with an exchange settlement account by the 
RBA.  The RBA does not see its balance sheet as bei ng available to support insolvent institutions. 
 Bank failures have been rare in Au stralia in recent history and Aust ralia’s strong prudential regime 
has ensured that where failures have occurred, depos itors have been protected.  Since the early 1930s, 
banking sector problems have been resolved without  losses to depositors.  The most recent experience 
of bank failure in Australia occurred when the Stat e Banks of Victoria and South Australia failed in 
the early 1990s.  In these cases the relevant St ate governments, as owners, had unconditionally 
guaranteed the banks’ liabilities.  Question: (Paragraph 84)  The revised prudential standards and guidance notes are applicable to all authorized deposit taking 
institutions (ADIs) since 1 July 2006.  
In this respect, could Australia elaborate on th e major changes relevant for foreign service suppliers? 
 
Answer: 
 
The Australian Prudential Regulation Authority upda ted its prudential standards and guidance notes in 
July 2006 to reflect the adoption of International Financial Reporting Standards (IFRS).  The revised 
standards de-couple the definition of capital instru ments eligible for Tier 1 capital from Australian 
accounting standards and bring APRA's approach to  innovative capital instruments into line with 
international practice.  The revised standards al so de-couple the assessment  of securitised assets for 
capital adequacy purposes from the acco unting treatment of these assets.   
 
Australia’s capital adequacy standards apply equa lly to all locally incorporated ADIs, including 
locally incorporated subsidiaries of foreign banks.    
Question: 
 
WTO Secretariat's Report, page94, para.90 
 As stated in the report, APRA is strengthening its prudential requirements for general insurance 
companies with a view to providing a clearer pict ure of reinsurance contracts, including annual 
disclosure requirements, business plans and prior approval requirements.  In this respect, could Australia inform about the recent Australian practice associated with 
application of such requirements? Could Australia clarify whether there is a difference in treatment 
between domestic and foreign investors and between  foreign investors and investors from the US?   
 
Answer: 
 
In February 2006, APRA released a prudential sta ndard and an associated non-binding prudential 
practice guide on reinsurance managements for authori sed general insurers.  This new standard came 
into effect from 1 October 2006. 
  WT/TPR/M/178/Add.1 
 Page 225 
 
 
  The standard aims to ensure that all general insu rers authorised under the Insurance Act 1973 have in 
place a specific reinsurance management framewo rk to manage the selection, implementation, 
monitoring, review, control and documentation of  its reinsurance arrangements.  The prudential 
standard includes requirements that a general insurer must: 
 
- have in its reinsurance management  framework a documented Reinsurance 
Management Strategy (REMS), sound re insurance management policies and 
procedures and clearly defined mana gerial responsibilities and controls; 
- submit its REMS to APRA on an annual  basis and resubmit the REMS when any 
material changes are made; 
- submit a reinsurance arrangements statemen t detailing its reinsurance arrangements to 
APRA at least annually; and 
- submit to APRA an annual reinsurance declaration. 
 The standard aims to provide consistent treatment for domestic and foreign insurers.  However, where 
appropriate, minor adjustments have been made to reflect the different corporate structure and risk 
profile of a foreign insurer.  For example, a foreig n insurer, as well as any insurer that is part of a 
corporate group, must in its REMS provide inform ation regarding the linkages between its local and 
group reinsurance arrangements. 
 No distinction was made between a US insurer and other foreign in surers with respect to this 
prudential standard. 
 
Hong Kong:
 
 
Question:  It is noted that under the Financial Sector ( Shareholdings) Act 1998, financial sector companies are 
subject to a 15% shareholding limit, although th e Treasurer may approve a higher percentage on 
“national interest” grounds.  Could Australia advi se on the compatibility of the subject limitation 
with its existing GATS commitments?  What are th e factors that the Treasurer will take into account 
in deciding whether to approve a higher percentage  and what are those “national interest” grounds 
based on which the Treasurer will make such a decision? 
 
Answer: 
 
These measures are prudential and are non-discrimin atory.  They apply equally to Australian 
investors.  It should also be noted that share holding above 15 per cent can be allowed with the 
approval of the Treasurer.  The Government’s policy is  that foreign investment in banking needs to be 
consistent with the Banking Act 1959 and the Fina ncial Sector (Shareholdings) Act 1998, and banking 
policy, including prudential requirements.  
 
Any proposed foreign takeover or acquisition of an  Australian bank would be considered on a case-
by-case basis and judged on its merits.  
India:
 
 
Question:  Foreign banks operating as branches in Australia can only accept deposits exceeding A$250,000 and 
this restriction is intended to protect retail depos itors, as foreign bank branch operations are subject 
to more liberal regulatory requiremen ts. Further, such a high limit en sures that no bank, at least from WT/TPR/M/178/Add.1 
Page 226  
 
  a developing country can set up shop because of an almost scenario where deposits would be 
negligible.  We request Australia to explain the rationale behind the application of different regulatory 
requirements to foreign bank branches from those applied to domestic banks.  Would Australia 
consider doing away this limita tion for developing countries?  
 
Answer: 
 
Foreign deposit-taking institutions  (including foreign banks) are pe rmitted to operate in Australia 
through a locally incorporated authorised deposit-taki ng (ADI) subsidiary or an authorised branch.  A 
foreign bank can operate both a locally incorporated subsidiary and an authorised branch at the same 
time in Australia.  The prudential requirements for a foreign owned locally incorporated subsidiary 
are broadly equivalent to those applied to locally owned ADIs.  
Authorised branches of foreign banks are not permitt ed to accept ‘retail’ deposits in Australia because 
they are not subject to the depositor protection provisions of Australia’s Banking Act 1959  and their 
solvency is not subject to direct oversight by th e Australian Prudential Regulation Authority (APRA).  
Except for 'retail deposit-taking', authorised branches of foreign banks are perm itted to engage in all 
other activities open to locally-incorporated ADIs.  
In relation to other regulatory requirements, aut horised branches of foreign banks (as opposed to 
foreign bank locally incorporated ADI subsidiaries)  are not subject to local capital or local large 
exposure requirements.  This enables them  to trade more eff ectively as branches. 
 If a foreign bank wishes to operate in the retail de posit market in Australia, it is required to seek 
authorisation as a locally incorporated subsidiary to do so.  The rationale is to protect retail depositors 
through Australia’s depositor preference provisions a nd direct APRA supervision, which also apply to 
Australian owned ADIs.  No consideration is currently being given to a ltering the restrictions on foreign bank branches. 
 Mexico:
 
 Question: Paragraph 82  
A foreign bank is not allowed to raise deposit funds or undertake business in Australia, unless 
authorized by the Australian Prudential Regulation Authority. What requirements must a foreign bank meet in  order to be allowed to carry out financial 
transactions in Australia?  
 
Answer: 
 
Subsidiaries of foreign banks are subject to the same legislative and prudential requirements as 
locally-owned banks.  Although the prime responsibilit y for oversight of the Australian operations of 
a foreign bank rests with local management and its  head office as well as with the foreign bank’s 
home supervisor, the foreign bank is still required to submit its lo cal operations to the prudential 
supervision of the Australian Prude ntial Regulation Authority (APRA). 
 There are no restrictions on the number or size of operations of foreign banks in the Australian market.  A foreign bank may also hold a dual authority to operate both as a locally incorporated subsidiary and a foreign bank.  WT/TPR/M/178/Add.1 
 Page 227 
 
 
  Foreign banks (operating through branches) are not allowed to accept initial deposits from Australian 
resident individuals of less than $A 250,000.  No  other specific restrictions are placed on the sources 
of funding or the use of funds by a foreign bank.  
Communications 
 
China:
 
 Question:  
The Australian Government used to have 51.8% own ership of Telstra, which in 2006 was reduced to 
17%. However, foreign ownership of Telstra is still limited to 35% in aggregate, and up to 5% 
individually.  Did the reduction of the government ownership in 2006 imply launch the further privatization process 
of Telstra? If the foreign participation is still cappe d, is there a national treatment problem in the 
privatization process?  What is the shareholding structure of Telstr a now (by the end of January 2007)? What is the 
individual ownership respectively?  
Does Australia have any plan of relaxing th e foreign ownership limitation in Telstra?  
 
Answer: 
 
On 19 November 2006, the Minister for Finance and Administration announced that the final public 
offer of the Government’s Telstra shares (T3) had successfully concluded with around 4.25 billion 
shares allocated (around 35 per cent of total Telstra shares).  As a result Telstra is no longer an 
Australian Government controlled company.   The Government’s remaining Telstra shares are around 17 per cent and are expected to be transferred 
to the Future Fund in early 2007.  Under the Telstra Corporation Act 1991 , Telstra shares held by the 
Future Fund will be considered as being held by  a person other than the Australian Government.  
 The Future Fund is an independent arm’s length i nvestment fund, staffed by experts in portfolio 
management.  The Australian Government consider s that the Fund is well-placed to manage this 
shareholding and to sell down the holding in line w ith its objective of maximising the return on its 
assets over the long term. 
 Telstra shares held in the Future Fund will be s ubject to an escrow period of around 24 months.  After 
the escrow period, the Fund will be free to manage  its shareholding as it sees fit.  The Australian 
Government has indicated it will not be directing th e Fund on the timing or structure of a sell down, 
or setting a target price for Telstra shares held by the Future Fund.  
 
The Australian Government’s policy is to restrict fo reign ownership of Telstra so that Telstra remains 
majority Australian owned.   Under the Telstra Corporation Act , Telstra is subject to ownership restrictions that limit foreign 
groups to 35 per cent of Telstra's listed capital a nd a maximum holding of 5 per cent for individual 
foreign entities.  Australia has scheduled these market access restrictions in its existing GATS 
commitments.  Telecommunications-specific foreign ownership restrictions do not apply to any other 
telecommunications companies in Australia.  WT/TPR/M/178/Add.1 
Page 228  
 
  The Australian Government has indicated that these pr ovisions will continue to  apply irrespective of 
the ownership structure of the Telstra.  
Colombia
 
 
Question: 
 Competition in the telecommunications market has  been supported by the national access regime 
(Chapter III(4)(iii)(a)), contained in the Trade Practices Act 1974.  The telecommunications 
competition framework was refined by the Telecomm unications Competition Act passed in 2002, with 
a view to, inter alia:  speeding up access to core telecommunicati on services;  facilitating investment 
in new infrastructure;  and building up a mo re transparent market.  In September 2005, the 
Parliament passed another package of further reg ulatory adjustments to the telecommunications 
regime, leading up to the divestiture of the Government 's remaining stake in Te lstra (paragraph 95).  
The package included the operational separation of Telstra's retail and wholesale and network 
business areas, with full effect from 1 December  2006;  operational separation involves measures 
dealing with both price and non-price conduct, with a view to ensuring that Telstra does not use its 
dominant wholesale/network position to give advantage to its own retail business in an anti-competitive manner.  What mechanisms are used to promote competition in the sector? 
 
Answer:  
 
Sustainable competition is underpinned by a teleco mmunications specific competition regime in the 
Trade Practices Act 1974 (TPA), which is administered by th e Australian Competition and Consumer 
Commission (ACCC).  The competition regime includes strong powers to prevent dominant carriers 
from behaving anti-competitively (Part XIB) and the ability to mandate access to ‘bottleneck’ 
telecommunications services (Part XIC).   Regulated access to a particular service can be obtained if the ACCC ‘declares’ the service. The ACCC must hold a public inquiry prior to declaring a service, and must be satisfied that the 
declaration of the service is in the long-term inte rest of end-users.  Once a service is declared, the 
access regime encourages the access seeker and provider to engage in commercial negotiations to determine the terms and conditions of the supply of the service.  If commercial negotiations are not 
successful, either party can apply to the ACCC to arbi trate the dispute.  Access prices arbitrated by the 
ACCC are fair and reasonable to acc ess providers and access seekers, and take into acc ount, inter alia, 
the provider’s costs, need for i nvestment incentives and risks.  
 The anti-competitive conduct provisions in Part XIB of the TPA enable the ACCC to issue a 
competition notice to carriage service providers wi th significant market power that the ACCC has 
reason to believe are engaging in anti-competitive conduct.  Issuing a competition notice is designed 
to promptly stop the conduct and opens the way for substantial penalties and damages.  
 
The Australian Government has also introduced th e operational separation of Telstra, the former 
incumbent.  Operational separation promotes transp arency and equivalence in the supply of services 
to Telstra’s wholesale customers.  Operational separation contains a number of elements that are intended to more readily identify anti-competitive c onduct, or to reduce Telstra’s capacity to engage 
in such behaviour.  For example, operational separation requires Telstra to: 
 
- have separate retail, wholesale and network services business units, with separate 
staff and premises and internal contracts; 
- improve its responsiveness and information provision to its wholesale customers;  WT/TPR/M/178/Add.1 
 Page 229 
 
 
  - apply the same standards to the supply of  services to wholesale customers that apply 
to the supply of services to its own retail business units; and 
- test material changes in wholesale and/ or retail prices for anti-competitive effect. 
 
Question: 
 
What are the obligations of a wholesale supplier like Telstra?  Answer: 
 A wholesale supplier is obliged to comply with the Standard Access Obligations (SAO) for services to 
which access has been d eclared by the ACCC under Part XIC of the Trade Practices Act 1974  (TPA) .  
SAOs are (s.152AR) oblige the access provider to:  
- supply the service upon request (to the access seeker); 
- ensure the technical and operational quality of the service is equivalent to that which 
it supplies itself; and 
- provide equivalent fault detection, handli ng and rectification to that which it provides 
to itself in relation to the declared service.  
 For services that are not declared under Part XIC of the TPA, the terms and conditions of access are 
commercial matters for the access seeker and provider to negotiate. 
 
Hong Kong:
 
 Question: 
 
We note from Australia’s revised offer that it is currently maintaining an MFN exemption on 
audiovisual services concerning its co -production programmes.  We woul d be grateful to know if the 
measures under the exemptions are applied by nat ional origin of the audiovisual works; and if so, 
how the national origin is applied, whether by th e origin of the funding party, the production crew, 
the place of production, etc.  Would Australia also  advise whether it would consider removing the two 
MFN exemptions currently maintained  by it in its future offers?   
 
Answer: 
 
The principal purpose of Australia’s Official Co-pr oduction Program is to foster cultural development 
and cultural exchange between co-operating count ries.  In this environment, co-production 
agreements are individually negotiated with the aim of sustaining and developing Australian creative 
resources and production.  Under these agreements, a project approved as an o fficial co-production is regarded as a national 
production of each of the co-producing countries and is therefore eligible to apply for any benefits or 
programs of assistance available.  Eligible project s are those which are initiated, developed or scripted 
by the identified co-producers - nationals or residents of Australia and the co-producing country.  Applications are assessed on a case-by -case basis, not an industry-wide basis, and in conjunction with 
the provisions of the applicable agreement.  
Australia’s MFN exemptions are not intended to prev ent trade in audiovisual services.  The Australian 
Government remains committed to preserving the ri ght to regulate audiovisual media to achieve 
cultural and social objectives, and to maintain  the broad matrix of support measures for the 
audiovisual sector that underpin cultural policy.  Since the conditions which created the need for these WT/TPR/M/178/Add.1 
Page 230  
 
  MFN exemptions still prevail, the Australian Govern ment is not planning to remove them in any 
future offers.  
Japan:
 
 
Question: 
(Paragraph 92) 
 
Please indicate the number of telecommunicati ons carriers and service providers, and the number of 
foreign telecommunications carriers and service provid ers?  Also, Japan would like to know the 
results of Australia’s analysis of the openness of its  telecommunications markets compared to that of 
other major markets. 
 
Answer: 
 
At the end of June 2006 there were 157 licensed telecommunications carriers, and 1170 registered 
carriage service providers, up from 378 at the end of June 1997.  The data reported by the Australian 
Communications and Media Authority does not dis tinguish between domestic and foreign service 
providers.   Providers with a major proportion of foreign owne rship include SingTel Optus, AAPT, Vodafone, 
Hutchison and Primus.  Australia’s open market has attracted a significant level of foreign investment. 
 Question: (Paragraph 92-97) 
 
(1) Could Australia elaborate on the conditions of  a license to foreign telecommunications service 
providers? Are the conditions different between dom estic and foreign providers? In what areas is 
national treatment not acco rded to foreign providers? 
 
Answer: 
 
The Australian telecommunications market was fully  deregulated in 1997, offering simple licensing 
procedures for carriers and licence-fr ee entry for service providers.  Apart from Telstra, no industry-
specific foreign ownership restrictions appl y, nor any line-of-business restrictions.  
 Sections 61-7 of the Telecommunications Act 1997 (TA) require carriers to comply with the licence 
conditions imposed by Schedule 1 of  the TA and section 152AZ of the Trade Practices Act 1974 , as 
well as any conditions contained in a licence issued under the Radiocommunications Act 1992  and any 
other conditions imposed by the relevant Minister.  
 
Question: 
 
Regarding Mode 3, Japan notes that there are restric tions on: (i) the foreign ownership of Telstra, 
more specifically, the limitation of the maximum aggregate foreign ownership to 17.5 percent of all 
shares (35 per cent of the privately held shares, i.e. those not owned by the Australian Government) 
and to 5 per cent for individual or associated group s of foreign investors; and (ii) the form of the 
legal entity permitted to hold a new carrier license.  Japan would be grateful if Australia could 
provide Japan with rationale for these limitati ons on foreign ownership and governmental 
involvement and the future prospect of pote ntial elimination or relaxation thereof. 
  WT/TPR/M/178/Add.1 
 Page 231 
 
 
  Answer: 
 
The Government’s policy is to restrict foreign ownership of Telstra so  that Telstra remains 
predominantly Australian owned.  The Government has indicated that these provisions will continue 
to apply irrespective of the ownership structure of the Telstra. 
 According to section 52 of the Telecommunications Act 1997 , a person may apply to the ACMA for a 
carrier licence, so long as the person is:  
a) a constitutional corporation; or 
b) an eligible partnership; or 
c) a public body. 
 
Question: 
 
Services covered by the Broadcasting Services Act 1992 are excluded from Australia’s GATS 
commitments for telecommunications. Please clarify the exact scope of coverage under the Act so 
Japan can better understand the regulation concerni ng the participation of foreign persons or 
entities. 
 
Answer: 
 
The Broadcasting Services Act 1992 (BSA) defines the term “broadcasting service” in subsection 6(1) 
to mean: 
 
“a service that delivers television programs or radio programs to persons having equipment 
appropriate for receiving that service, whether the delivery uses the radiofrequency spectrum, 
cable optical fibre, satellite or any other means or a combination of those means, but down not 
include: 
 a) a service (including a teletext service) that pr ovides no more that data, or no more than 
text (with or without associated still images); or 
b) a service that makes programs available on demand on a point-to-point basis, including 
a dial-up service; or 
c) a service or a class of services, that the relevant Minister determines, by notice in the 
Gazette , not to fall within this definition.” 
 
On 12 September 2000, the then Minister made a determination under paragr aph (c) of subsection 
6(1) of the BSA, providing that a service that ma kes available television or  radio programs using the 
Internet (other than a service th at utilises the broadcasting servic es band), does not fall within the 
definition of a broadcasting service.  
 
Question: 
(Paragraph 94) 
 In Australia, digital services are included in the universal service as DDS. Could Australia provide 
the rationale for and the details of this system? 
Answer: 
The Digital Data Service Obligati on (DDSO) was introduced under the Telecommunications 
(Consumer Protection and Service Standards) Act 1999  to provide a regulatory safety-net for 
consumers wanting higher speed Internet access.  It is  designed to ensure that digital data services are WT/TPR/M/178/Add.1 
Page 232  
 
  reasonably accessible, on request, to all people in Au stralia on an equitable basis, wherever they 
reside or carry on business.   
The DDSO has two components the General DDSO and the Special DDSO.  The General DDSO 
requires the General DDSO provider, Telstra, to en sure the availability of digital data services 
operating at a specified minimum speed of approximately 64kbps.  Digital data services are provided via an Integrated Services Digital Network (ISDN) se rvice to at least 96 per cent of the population at a 
commercial price.  The remaining four per cent of  the population are entitled to digital data services 
under the Special DDSO, details of whic h are provided in Question 2 below. 
In practice the DDSO has largely been superseded by new Governme nt funded broadband programs, 
Broadband Connect and Metropolitan Broadband Connect , but it has been retained as a low impact 
regulatory safety-net. 
Question: Suppliers are required to provide “Special DDSO” as DDSO
 in rural areas, and if a supplier 
cannot fulfil this obligation, alternative measures can be taken. Japan would like to know further 
information on what alternative measures actua lly are, and if such measures include wireless 
communications technologies.  
Answer: 
The Special Digital Data Service Obligation (Speci al DDSO) is a legislative obligation requiring a 
designated provider to suppl y a special digital data service to the less than four per cent of the 
population who cannot receive an ISDN service.  
The Special DDSO scheme provides a rebate of 50 per cent of the price of satellite equipment and 
installation, capped at $A 765.  Telstra is curren tly the sole provider of the Special DDSO, however, 
the provision of special digital data services is open to all service providers in Australia.  The sum of rebates paid each year is funded by industry via the USO levy.  The level of SDDSO funding has 
always been low, as indicated in the following table: 
Table 1: Number of Special DDSO services provided per annum 
 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 
Telstra 84 366 463 488 307 69 6 
HotKey n/a n/a n/a n/a 3 0 0 
 
Source: Australian Communications Media Authority.  
 
Historically the Special DDSO has been delivered  via one-way satellite, however, the legislation is 
not technology specific and therefore, it coul d be provided over wireless infrastructure. 
 
Question: 
(Paragraph 95) 
 
Japan welcomes Australia’s ongoing effort to reduce the Government shareholdings of Telstra; Japan 
would however like to know what plans are in the works to sell off the remaining shares. Japan also wishes to know whether Australia recognizes the fact  that foreign investment restrictions on Telstra 
are still in place. Japan would like to know what plan has been put in place and what progress has 
been made concerning relaxation a nd removal of such restrictions. 
Please provide the reasons why forei gn investment restriction in Telstra is limited to up to 35% in 
aggregate and up to 5% individually.  WT/TPR/M/178/Add.1 
 Page 233 
 
 
  Please explain the reasons and prov ide further information on which Ministry owns Telstra stock and 
which Ministry is in charge of such stock holdings. 
Japan understands that there are nationality requiremen ts for the chairperson and the majority of the 
board directors under section 8BT, section 8BU, and section 36 of the Telstra Corporation Act 1991. 
Are such laws and regulations still relevant? If so, what reservations are correspondent to such restrictions on Australia’s GATS revised offer and schedule of commitment 
Answer: On 19 November 2006, the Minister for Finance and Administration announced that the final public 
offer of the Australian Government’s Telstra sh ares (T3) had successfully concluded with around 4.25 
billion shares allocated (around 35 per cent of total Telstra shares).  As a result Telstra is no longer a 
Australian Government controlled company.  
The Australian Government’s remaining Telstra shar es are around 17 per cent and are expected to be 
transferred to the Future Fund in early 2007.  Under the Telstra Corporation Act 1991 , Telstra shares 
held by the Future Fund will be considered as be ing held by a person other than the Australian 
Government.  The Future Fund falls  within the Treasury portfolio.  
The Future Fund is an independent arm’s length i nvestment fund, staffed by experts in portfolio 
management.  The Australian Government consider s that the Fund is well-placed to manage this 
shareholding and to sell down the holding in line w ith its objective of maximising the return on its 
assets over the long term. 
Telstra shares held in the Future Fund will be s ubject to an escrow period of around 24 months.  After 
the escrow period, the Fund will be free to manage  its shareholding as it sees fit.  The Australian 
Government has indicated it will not be directing th e Fund on the timing or structure of a sell down, 
or setting a target price for Telstra shares held by the Future Fund.  
The Australian Government’s policy is to restrict fo reign ownership of Telstra so that Telstra remains 
predominantly Australian owned.  
Under the Telstra Corporation Act , Telstra is subject to ownership restrictions that limit foreign 
groups to 35 per cent of Telstra's listed capital a nd a maximum holding of 5 per cent for individual 
foreign entities.  The Telstra Corporation Act  also requires that the Chairperson and a majority of the 
Board members must be Australian citizens, that Tels tra must remain incorporated in Australia and its 
head office and base of operations must remain in Australia.  The Australian Government is 
considering revising its GATS offer to refl ect the full privatisation of Telstra. 
The Australian Government has indicated that these pr ovisions will continue to  apply irrespective of 
the ownership structure of the Telstra. 
Question: 
(Paragraphs 96 & 117) 
It is indicated in the Secretariat Report that op erational separation of Telstra’s retail and wholesale 
and network business areas has been in fu ll effect since 1 December 2006 under the 
Telecommunications Legislation Amendment (Com petition and Consumer Issu es) Act 2005, and that 
appropriate measures which prevent Telstra from us ing its dominant position in an anti-competitive 
manner have been taken.  Please provide further detailed information on dom estic laws and regulations that prevent Telstra’s 
anti-competitive actions from the viewpoint of cons istency with the Competitive Safeguards stipulated 
in GATS Reference Paper. WT/TPR/M/178/Add.1 
Page 234  
 
   
What is the legal base of OSP (Operation Separat ion Plan) which ensures operational separation of 
Telstra? Is it correct to assure there are no pena lties imposed on Telstra wh en Telstra’s action run 
counter to OSP?  
Answer:  
Operational separation is implemented as a statutory condition of Telstra's carrier licence, specified in Part 8 of Schedule 1 to the Telecommunications Act 1997 .  This required Telstra to prepare a draft 
plan for operational separation, undertake public c onsultation, and submit the draft plan to the 
Minister for Communications, Information Technology and the Arts (the Minister) for approval.  The 
draft plan was required to meet the legisla tive requirements set out in Schedule 1 to the 
Telecommunications Act  and in two Determinations made by the Minister under the Act: the 
Telecommunications (Requirements for Operational  Separation Plan) Determination (No. 1) 2005  
and the Telecommunications (Operational Separation—D esignated Services) Determination (No. 1) 
2005 .   
 After consultation with Telstra and the Austra lian Competition and Consumer Commission (ACCC), 
and taking into consideration the views of indus try stakeholders and members of the public, the 
Minister approved the draft plan on 23 June 2006.  The operational separation regime commenced on 
approval of the draft plan, and took full effect on 1 December 2006. 
 
Penalties can be imposed on Telstra if it breaches ope rational separation, but priority is given to 
having Telstra correct its behaviour as a preferred outcome.  Compliance with a final operational separation plan  is not a condition of Telstra’s carrier licence 
(subclause 55(3) of Schedule 1 to the Telecommunications Act ).  However, if Telstra contravenes the 
plan, the Minister can direct Telstra to prepare a draft rectification plan (subclause 60(2)).  Telstra must submit the draft within 90 days – if approved, it becomes a final rectification plan.  Once the final rectification plan is in place, Tels tra must comply with it (clause 65).   
 Telstra would be in breach of its carrier licen ce conditions if it did not comply with a final 
rectification plan or with any of the ‘process’ re quirements in the operational separation provisions, 
i.e. directions by the Minister in relation to the pr eparation of rectification plans or variations to the 
plan, or requirements relating to publication or consultation.    If Telstra is in breach of its carrier licence cond ition, the following enforcement options exist: 
 
- the ACCC or the Australian Communications and Media Authority (ACMA) may 
issue Telstra with a formal warning under section 70 of the Telecommunications Act ; 
- the ACCC (section 69A) or ACMA (section 69)  may give Telstra a remedial direction 
requiring Telstra to take specified action to  ensure that it does not contravene its 
licence condition in the future.  Failure to comply with a remedial direction would in 
itself be a breach of a carrier licence condition; or 
- the ACCC, ACMA or the Minister could commence proceedings in the Federal Court 
seeking recovery of a civil penalty in re lation to the breach of the carrier licence 
conditions. 
The maximum penalty that could be imposed on Telstr a for failure to comply with a carrier licence 
condition would be $A 10 million fo r each contravention (section 570). 
  WT/TPR/M/178/Add.1 
 Page 235 
 
 
  Question: 
 Please explain the reasons why OSP has been approved by the DCITA which is not the regulating and 
licensing authority.  
Answer:  
The Operational Separation Plan (OSP) was approved by the Minister for Communications, Information Technology and the Arts, not the Department of Communications, Information 
Technology and the Arts (DCITA).  DCITA advises the Minister on such matters, but does not have 
power to approve regulatory instruments. 
 Operational separation models range  in scope from enhanced reporting of internal processes through 
to full internal reorganisation of business units and transfer prices.  A decision on the preferred model 
to be used in the Australian context is a po licy and law-making matter on which the Minister is 
primarily advised by the Department of Commun ications, Information Technology and the Arts, 
rather than by the Australian Competition and Consumer Commission (ACCC).    The ACCC’s role as regulator involves monito ring the operational separation regime, and 
investigating possible contraventions  of the Operational Separation Plan  
 
Question: 
 It is said that OSP will be reviewed by July 2009.  Who will make a decision on the competition status 
and Telstra’s market domination?  
 
Answer:  
Section 61A of the Telecommunications Act 1997  states that a review of the operational separation of 
Telstra must be conducted before 1 July 2009.  At this stage, a decision has not been made about how 
the review would be conducted or by whom.  S ection 61A contains a number of matters to be 
considered by the review.  We anticipate considerin g a range of inputs concerning Telstra’s status in 
the market.  
 
Question:  Japan understands that an equal balance between w holesale business areas and retail business areas 
is the aim of the “notional contract”. Please pr ovide further information on how its appropriateness 
of the “notional contract” itself is ensured. Also, are improvements orders issued by the regulatory 
body applied to the “notional contract”?  Answer: 
 In accordance with subsection 14(1)(b)  of the  Telecommunications (Requirements for Operational 
Separation Plan) Determination (No. 1) 2005 , clauses 5.7-5.14 of Telstra’s Operational Separation 
Plan (OSP) established notional contracts betw een the key network services business unit and the 
wholesale business unit, and the key network ser vices business unit and the retail business unit. 
 
These contracts serve as a means of achieving e quivalence in the operati onal quality of designated 
services supplied to wholesale customers and the re tail business unit and the standard of the delivery 
of fault detection, handling and rectification and service activati on and provisioning in relation to 
designated services supplied to wholesale cu stomers and the retail business unit.   
 WT/TPR/M/178/Add.1 
Page 236  
 
  Clause 5.10 of the OSP requires Telstra to comply wi th the commitments in the notional contracts.   
 It follows from this that Telstra will set notional c ontracts which ensure its retail business is provided 
with a high level of service, thus setting a high le vel benchmark for service for wholesale customers.  
If Telstra contravenes the provisions of the notional contracts, and therefore contravenes its OSP, the 
Minister can take the steps detailed above to ensure  compliance with those provisions.  A rectification 
plan requested by the Minister could relate to those notional contracts.  
Question: 
 
Is there a dominant supplier or suppliers in the m obile market? If so, please provide information on 
rules for interconnections and on dominant regulations.  
 
Answer: 
 There are four mobile network operators in Aust ralia which own mobile network infrastructure and 
operate at the wholesale and retail levels.  These are Telstra, Optus, Vodafone and Hutchison.  The 
mobile services market also consists of resellers of mobile services, mobile virtual network operators 
and retailers.  In 2005 there were almo st 90 resellers of mobile services.  
 As the market comprises four competing networks, it  is inclined to deliver competitive outcomes in 
downstream markets.  To ensure any-to-any conn ectivity between mobile networks, and given the 
‘calling-party-pays’ system, access to the mobile te rminating access service is regulated.  This is the 
only regulated service in the mobile market.    
Question: 
(Paragraph 96) 
 Japan is of the opinion that sufficiently unbundled Te lstra’s local loops ensure further development of 
the broadband market in Australia.   
In August 2006, ACCC issued the final decisi on on Telstra’s ULLS (U nconditioned Local Loop 
Services) charges undertaking submitted by Telstr a which proposed uniform charges throughout the 
country. With respect to charges for unbundled local loops, please provide further detailed 
information on domestic laws and regulations to ensu re “cot-oriented rates” stipulated in the GATS 
Reference Paper. In addition, Japan would like to know what measures the Australian Government 
will take to ensure “cot-oriented ra tes” through future decisions. 
 Answer: 
 
In August 2006, the Australian Competition a nd Consumer Commission (ACCC) issued a final 
decision rejecting Telstra’s ULLS access undertaking,  in which Telstra had proposed to provide 
access to the ULLS for a geographically uniform (c alled “geographically averaged”) ULLS access 
charge.  The ACCC requires Telstra to charge geographically de-averaged ULLS access charges.  
This means that a different access charge applies in each of the four zones, known as Bands, which 
are classified according to population density and teledensity.  (Band 1 = central business districts, 
Band 2 = suburbs, Band 3 = larger towns, Band 4 = rural and remote areas.)  The access charge in 
each Band reflects Telstra’s costs of providing the U LLS in that Band.  The costs are lowest in Band 1 
and highest in Band 4.  The ACCC’s decision rejecting Telstra’s ULLS access undertaking is currently undergoing merits 
review by the Australian Competition Tribunal (ACT). 
  WT/TPR/M/178/Add.1 
 Page 237 
 
 
  The ACCC adopts the “TSLRIC+” (total service long-r un incremental cost plus an appropriate share 
of common costs) pricing methodology for determining ULLS access charges.  This is a cost-based methodology.  
Question: 
 
It is indicated in the Secretariat Report that Austra lia has introduced a pri ce control arrangement and 
that this price control arrangement covers not only local but also long-distance and international 
services. Does this mean that the long-distance and in ternational service sectors are not sufficiently 
competitive? 
 
Answer: 
 
Australia has had price control arrangements for consumer protection in place since 1989.  Following 
a comprehensive review of the telecommunications  competition regime in 2005, new price control 
arrangements were introduced in January 2006, to expire in 2009.  
 The price controls apply to Telstra in relation to national and long distance services to provide a 
safeguard for consumers.  The supply of  these services is highly competitive.  
 
Question: 
 
Japan understands that Telstra anno unced “Telstra’s strategy for growth” in November 2005 and 
that a plan for installation of FTTN is set out in th is strategy. Japan would li ke to know what plan has 
been put in place and what progress has been made  concerning installation of FTTN. Please provide 
further information on whether the FTTN networks installed by Telstra will be opened to other 
operators or not. In addition, are the FTTN netwo rks included in the scope of access obligations? If 
so, please explain the rea sons for this.     
 
Answer: 
 
Telstra had announced a plan to build a FTTN networ k in 2005.  It launched talks with the Australian 
Competition and Consumer Commission (ACCC) shor tly after this announcement, to discuss the 
regulation of a FTTN network.  On  7 August 2006 Telstra withdrew from talks with the ACCC, and 
announced that had put its FTTN plans on hold.   Part XIC of the Trade Practices Act 1974  (TPA) sets out a telecommunications industry-specific 
access regime.  There is no general right of access to telecommunications services.  The ACCC must 
first 'declare' the relevant service (Division 2 of Pa rt XIC of the TPA).  Upon declaration, standard 
access obligations (Division 3 Part XIC of the TPA) apply.  The access provider is obliged to supply 
the service to an access seeker upon request.   Before it declares a service, the ACCC must hold a public inquiry and give access providers, access 
seekers and consumers the opportunity to comment.  Th is is the process that the ACCC will have to 
follow for regulation of FTTN networks.   
Question: 
 
Please provide further detailed information on the “S peed Reach” which is the entity established for 
co-operative approach to build FTTN networks propo sed by Telstra competitors. Also please let 
Japan know whether Telstra will jo in “Speed Reach” or not and whether “Speed Reach” will be 
obliged to install FTTN networks or not. 
 WT/TPR/M/178/Add.1 
Page 238  
 
  Answer: 
 
A consortium of competitive carriers called the G9 is  developing a proposal to build a FTTN network.  
It proposes that the FTTN network will be funded and owned by a FTTN Acce ss Network Ownership 
Company.  
 
The G9 currently proposes that the FTTN netw ork would be controlle d by an independent 
organisation called ‘SpeedReach’, which will be r esponsible for operating and managing the network 
on behalf of the owners and access seekers.  De tailed arrangements concerning the operation of 
SpeedReach are still under development by the G9. 
 
Telstra has so far indicated that it will not join  the consortium.  This is a commercial decision for 
Telstra.  The G9 is under no obligation to build a FTTN network.   
Question: 
 
The Secretariat Report states that the market share of broadband in Australia is 44%. However, 
considering that there are many case DSL subscrib ers to Telstra which provide services to other 
operators as wholesale services, we  consider Telstra’s total DSL market share would be higher than 
44%. If any survey has been conducted on the sha re including wholesale services, could Australia 
provide Japan appropriate data? Japan would also like to know what is the common way when 
competitors provide DSL services in Australia, and whether co-location services of DSLAM in 
Telstra’s building are provided or not.  
 
Answer: 
 There are currently no publicly available surveys th at detail Telstra’s wholesale and retail DSL market 
share.  Telstra’s competitors provide DSL services by rese lling Telstra’s or other service providers wholesale 
DSL services, or through either accessing the Unc onditioned Local Loop Service or the Line Sharing 
Service, both of which are declared services, and th e co-location of their DSLAMs in Telstra’s local 
telephone exchanges.   
 
Question: 
 Japan anticipates progress in Australia’s competiti on policy, it is however reported in ITU reports 
that Australia is ranked 48th among all 75 co untries under review with respect to broadband prices 
per 100kbit/s. Japan therefore considers that prices  are still high. Japan would like information on 
what measures are being taken to lower the price of broadband services, if any. 
 
Answer: 
 The Government’s principal stra tegy to improve communications services, including the price of 
broadband services, has been to encourage comp etition between as many service providers and 
carriers as possible.  Open competition in Australia’s telecommunications ma rket has delivered real benefits for consumers 
in the form of more choice and lower prices.  Increased competition has contributed to significant 
growth in the broadband market. 
The telecommunications-specific a ccess regime supports the deployment of DSL networks through 
open market entry and regulated access to the Un conditioned Local Loop Service and the Line  WT/TPR/M/178/Add.1 
 Page 239 
 
 
  Sharing Service.  There are now over nineteen se rvice providers that have rolled out their own 
ADSL2+ networks.    Competing cable networks also pass an estimated 2.4 million homes, and there are four competing 3G network operators in metropolitan areas and there w ill be two networks cove ring 96 percent of the 
population. 
 Australia’s regulation of radio spectrum suitable for the provision of broadband services is also 
resulting in the rapid deployment of competitive wireless broadband networks. 
 
In high-cost areas where the delivery of equitabl y priced broadband services by the market has been 
slow, the Government has facilitated access to thes e services through targeted financial assistance.  
The Government’s $A 878 million Broadband Connect program is one amongst a number of targeted 
programs that is facilitating the delivery of equitably priced broadband services.  
 Question:  Please provide information on the penetrati on rate of FTTH. Are the FTTH services provided 
commercially? And are there any ot her competitors in the market?  
 
Answer: 
 
To date there has been limited deployments of FTTH networks in private estates and a number of 
commercial and technical trials.  
 
Question: 
 
In the audio-visual services sector, measures for which foreign providers do not enjoy equal 
treatment include:  
- local content quotas for television; 
- subsidies for Australian firms; and - preferential film co-production arrangemen ts for film and television products with 
selected countries. 
 
Is there a plan to relax the regulation? If  not, could Australia explain the reasons? 
 
Answer: 
 
The Australian Government is not planning to relax the local (Australian) content quotas for 
television, nor does it plan to change the current approach in relation to the other measures listed 
above. 
 Australia’s audiovisual sector is critical to the ac hievement of the Australian Government’s broader 
social and cultural policy objectives – to develop and reflect a sense of national and cultural identity.  
The mix of subsidy, tax concessions and regulation (such as local content quotas for television) that 
forms Australia’s support for the audiovisual sector  is not designed to present barriers to market 
access, but is a necessary subvention in the national in terest to sustain Australian creative resources 
and to ensure that Australians have access to their own images and stories in cinemas and on television. 
The object of the Broadcasting Services (Australian Content) Standard 2005 (the Standard) is to 
promote the role of commercial television broadcasting services in developing and reflecting a sense WT/TPR/M/178/Add.1 
Page 240  
 
  of Australian identity, character and cultural di versity by supporting the community’s continued 
access to television programs produced under Australian creative control. 
 The successful achievement of Australia’s cultura l objectives in the audiovisual sector depends in 
large measure upon the existence of a vibrant local film and television produc tion industry to develop 
Australian programs for broadcast and exhibition.  Government support for the sector is therefore 
provided in areas of greatest market failure—those links in the value chain where activity would not 
occur, or would fall to levels likely to threaten i ndustry sustainability in the absence of subsidy.  This 
support complements and underpins the growth that is  occurring in the more commercially sustainable 
sectors of the industry. 
 
Australia also maintains an MFN exemption coveri ng official film co-productions.  The principal 
purpose of Australia’s Official Co-production progra m is to foster cultural development and cultural 
exchange between co-operating countries.  In th is environment, co-production agreements are 
individually negotiated w ith the aim of sustaining and developing Australian creative resources and 
production.  Film co-production agreements are no t industry-wide agreements.  They can only be 
accessed by makers of individual films on a case-by -case basis, through appropriate certification. 
 
Question: 
 If there was a pay-cable TV channel specialized fo r transmitting animation, would Australia impose 
the same local content quotas?  
 Answer: 
 
Australia has no specific content requirements for pa y TV (subscription television) services other than 
expenditure requirements under Part 7 of the Broadcasting Services Act 1992 (BSA) which was 
introduced in 1999.  If a subscription television licensee offers a drama channel, either the licensee or the person providing 
the channel to the licensee is required to spend a minimum of 10 percent of total program expenditure 
on new Australian drama programs.  
Question: 
 
Japan asked Australia to explain whether the nat ionality requirement of the chairperson and the 
majority of the board members of Telstra are still stipulated in the Telstra law, and what reservation 
in the Australian revised offer in the services negotiations corresponds to these requirements. 
Australia answered that the Australian Government is  considering revising its GATS offer to reflect 
the full privatization of Telstra.  In this regard, Japan would like to clarify the following points. 
 
(1) Are there any considerations to revise the pr ovision of the Telstra Corporation Act, which 
stipulates these nationality requirements? If it is th e case, please indicate the outline and schedule of 
the revision. (2) What sort of reservation in the Australian sch edule of commitment under the GATS corresponds to 
these nationality requirements?  
 
Answer: 
 
The Australian Government is not planning to re vise the nationality requirements contained in the 
Telstra Corporation Act.  Australia notes that the provisions of the Telstra Corporation Act 1991 , to 
which Japan referred in its original question, were  enacted as part of the privatisation process  WT/TPR/M/178/Add.1 
 Page 241 
 
 
  foreshadowed in Australia’s Uruguay Round GATS comm itments (that is, they did not appear in the 
Telstra Corporation Act  when it was originally enacted in 1991). 
 The privatisation of Telstra is now complete.  Aust ralia is currently reviewing its GATS offer, with a 
view to ensuring that all consequent market access and national treatment restrictions are 
appropriately scheduled.  Australia notes that the pr ivatisation of Telstra has created significant new 
market access opportunities for foreign investors.  Moreover, foreign e quity restrictions or nationality 
requirements apply only in relation to Telstra.  They do not apply to any other telecommunications company operating in Australia.  At the end of J une 2006 there were 157 licensed telecommunications 
carriers, and 1170 registered carriage service provide rs operating in Australia, many of them foreign 
owned.  
 
Mexico:
 
 Question: 
Paragraph 96 
 In April 2004, the Minister for Communications, In formation Technology and the Arts designated the 
ACCC to review the operation of Telstra's reta il price controls, leading to new price control 
arrangements on Telstra commencing on 1 January 2006, and remaining in effect until 30 June 2009. 
 
What are the new price controls applied to Telstra?  What are they for other operators?  
 
Answer: 
 In Australia retail price controls have been app lied to Telstra since 1989.  The price controls are 
imposed on Telstra under Part 9 of the Teleco mmunications (Consumer Protection and Service 
Standards) Act 1999.  They are intended to driv e efficiency improvement s, allow adjustments 
between line rentals and calls prices to encourage competition in the telecommunications market, and 
to protect low-income consumers.   
The Australian Government introduced new price c ontrols on Telstra, commencing on 1 January 2006 
and expiring on 30 June 2009.   
Under these arrangements, a basket of Telstra’s line rentals, local calls, STD, international and fixed 
to mobile calls will be subject to an overall pr ice freeze (Consumer Price Index (CPI) minus CPI) and 
Telstra is required to offer the same local call pric es and a basic line rental service (including those in 
service packages) to both metropolitan and regional area s.  Telstra is therefore required to offer a 
basic line rental service at the same price of $A  31.95 nationally, and with a cap of 22 cents on 
untimed local calls. 
 The price controls protect consumers, but allow Te lstra and other companies to offer innovative new 
packages, such as subscription pricing packages.  Pr ice controls do not appl y to other operators.  
 
Mexico:
 
 
Question: (Paragraph 98)  On 18 October 2006, the Australian Parliament passed the media reform package, under which the 
current media-specific and newspaper-specific foreign ownership restrictions would be removed from 
2007. WT/TPR/M/178/Add.1 
Page 242  
 
  Mexico would appreciate a more detailed explana tion of the object and scope of these reforms.  
 
Answer: 
 
As part of a broader media reform package in 2006, the Australian Government removed foreign 
ownership restrictions on free to air commercial, subscription television and newspaper businesses.  
The reforms to foreign investment in me dia and broadcasting, as provided under the  Broadcasting 
Services Amendment (Med ia Ownership) Act 2006,  came into effect on 4 April 2007. 
 Foreign companies wishing to invest in Australia’s  media sector now have greater opportunities to do 
so.  The Act:  
 
- removes broadcasting-specific restric tions on foreign control of free to air 
commercial and subscription television licences that were contained in the Broadcasting Services Act  (BSA);  
- removes foreign investment restricti ons on investment in newspapers; and 
- removes from the BSA the objective of Aust ralian control of the more influential 
broadcasting services. 
 Foreign investment in broadcasting and media re mains subject to the provisions of Australia’s 
Foreign Acquisition and Takeovers Act 1975  (FATA).  Broadcasting and media remains a sensitive 
sector and any takeover proposals will be subject to  national interest provisions and screening.  
Portfolio investments in the media of 5 per cent or more and all non-portfolio investments in the 
media, will require screening.  
US:
 
 
Question:  Australia retains foreign equity limits in Telstra, capped at 35 percent.  Do es Australia have plans to 
eliminate these foreign ownership restrictions?  If so, when?   
 
Answer: 
 
The Australian Government does not propose to ch ange the current foreign ownership limits in 
Telstra.  Telecommunications-specific foreign ownership limits do not apply to any other 
telecommunications companies in the Australian market  and currently all major competitors of Telstra 
are foreign owned. 
 
Transport
 
 
Canada:  
 Question: (Paragraph 103)  
The Secretariat Report mentions the Trade Prac tices Act 1974 in regards to Maritime transport. 
Australia announced in August 2006 that they woul d amend Part X of the Trade Practices Act 1974 
(dealing with anti-trust immunity for liner shipping conferences) to:   
- clarify its objectives; - remove discussion agreements from its scope;  
- protect individual confidential service cont racts between carriers and shippers; and   WT/TPR/M/178/Add.1 
 Page 243 
 
 
  - introduce a range of penalties for brea ches of its procedural provisions.  
 However, no time-table was given in this announcement.  
Does Australia have a time-table for the introd uction of amendments to remove Discussion 
Agreements from Part X of the Trade Practices Act 1974 and to protect individual confidential service 
contracts between carriers and shippers?  
Answer: Legislation is introduced into Federal Parlia ment according to the Australian Government’s 
legislation programme.  A bill to amend Part X of the Trade Practices Act 1974 - the Trade Practices 
(International Liner Cargo Shipping) Bill  - is listed for introduction in the Autumn sitting period 
(February/ March 2007).  Listing does not, however, guarantee that a bill will be introduced during a 
particular sitting period; introduction will depend on th e bill’s priority compared to other legislation 
on the programme.  Bills listed for introduction to th e Australian Parliament during a particular sitting 
period may be found at: http://www.pmc.gov.au/parliamentary/index.cfm . 
China:
 
Question: 
China would be grateful if Australia could sha re detailed information on its vessel registration 
system.  
Are there laws and regulations that would allow different treatment to be  accorded to vessels 
registered in Australia and foreign-fla gged vessels? If yes, what are they? 
Answer: 
The Shipping Registration Act 1981  only allows majority Australian ow ned ships to be registered in 
Australia, and also requires that majority Aust ralian owned ships be registered in Australia. 
The laws and regulations would differ in that Aust ralia is the flag state for vessels registered in 
Australia but the port state for vessels registered overseas. 
Question: 
Foreign participation of airports in Australia is subject to case-by-case approval. It shall not go 
beyond 49% for foreign ownership and, with onl y 5% permitted for foreign airlines and cross-
ownership between Sydney, Melbour ne, Brisbane, and Perth airports. 
Could Australia please explain reasons for these limits? Is there any plan of relaxing these limits?  
Answer: Underpinning the Government’s approach to airpor t privatisation was the decision to move from a 
single centrally controlled network to a diverse owne rship situation, particularly with the view to 
enabling the airports to be an integral part  of the competitive promotion of local business 
infrastructure.  
The Australian Government wishes to see a diversity of airport ownership, control and management in 
Australia while ensuring the airports remain major ity Australian owned and controlled.  This ensures 
that Australians are the primary beneficiaries of  the privatisation process while allowing scope for 
major international players to become involved at  both the investment and management levels. WT/TPR/M/178/Add.1 
Page 244  
 
  The Airports Act 1996  (the Act) lists particular objectives for the Act including ss.3(e) to ensure 
majority Australian ownership of airports; ss,3(f) to  limit the ownership of airports by airlines; and 
ss.3(g) to ensure diversity of ownership and cont rol of certain major airports.  This reflects the 
Australian Government’s policy intent ion in regard to the privatisa tion of federally leased airports. 
 The policy intention behind the airline ownership pr ovisions of the Act is to maximise competition in 
the aviation industry by separating airport ownershi p from airline ownership.  Any ownership by an 
airline raises concerns about market influence and the possibility of influencing operational decisions 
in a way that favours that airline at the expense of its competitors.  The airline ownership limit 
frustrates any favourable treatment of an airline (domes tic or foreign) by an airport, and ensures that 
airports behave fairly and equitably towards airport users. 
 
The Government has ensured that the previous gov ernment run network was not replaced by a private 
sector monopoly by imposing cross ownership limits of 15 per cent in relation to Sydney/Melbourne, 
Sydney/Brisbane and Sydney/Perth.  The cross-owners hip provisions ensure that airports continue to 
facilitate innovative management and greater local involvement in the opera tion and development of 
their airport, by maintaining diversity of airpor t ownership.  The Act contains cross ownership 
restrictions which encompass both an objective test (15 per cent maximum stake in either of the 
respective paired airports) plus a ‘practical control’ test (ss.54-57 of the Act).  
The Government has not given any indication that  it wishes to amend their policy position, and 
consequently no indication of a desire  to amend the Act or Regulations. 
 Chinese Taipei:
 
 Question: 
(Paragraph 105 ) 
 The Report notes that: “For example, the Expor t and Infrastructure Taskforce found capacity 
constraints at most of Australia's bulk ports for the export of coal and iron ore.”  
 Bearing in mind that Australia is a major trader of minerals and agricultura l products, we would be 
interested to know whether there are any plans in  place to expand Australia’s inland railway and port 
infrastructure, so as to increase the capac ity of its handling and storage facilities? 
 
Answer: 
 
Export and Infrastructure Taskforce
 
 Under Australia’s federal system , the development, maintenance and management of ports and 
harbours fall within state and territory jurisdiction.  The Australian Government’s focus is directed at 
the coordination and integration of transport services including ports.  State and territory governments 
have differing ownership and opera tional arrangements for the management of ports.  However, in 
general, ports have been corporatised to be mo re responsive, are expandi ng capacity and have long 
term expansion plans in place.  The Australian Government provides leadership where necessary 
through the Council of Australian Gove rnments (COAG) and other forums. 
 In 2005 the Export and Infrastructure Taskforce inves tigated whether any bottlenecks of a physical or 
regulatory kind were impeding Australian exports , taking into account the differing regulatory 
regimes between state and territory jurisdictions .  The taskforce found that there is not an 
infrastructure crisis in Australia, but emphasised that ‘without action to remove impediments to 
efficient investment in infrastructure, Australia’s ex port potential over the next five to ten years risks 
being compromised’.  WT/TPR/M/178/Add.1 
 Page 245 
 
 
  In response, at the February 2006 meeting of  COAG, a Competition and Infrastructure Reform 
Agreement (the Agreement) was adopted.  The Ag reement provides a simpler and more consistent 
national system of economic regula tion for nationally-significant infrastructure, including ports.  The 
Agreement aims to:  
- reduce regulatory uncertainty and compliance costs for owners, users and investors in 
significant infrastructure; and 
- support the efficient use of national infrastructure. 
 AusLink
 
 
Australian Government transport infrastructure investment is primarily undertaken through the 
AusLink programme.  Port Capacity
 
 
In the current AusLink programme (2004/5-2008/ 9), the Australian Government will make the 
following financial contributions towards port-related rail infrastructure works: 
 
- $A 14 million to improve rail capacity to the Port of Fremantle; - $A 110 million for a new rail link between the Dynon intermodal terminal and the 
Port of Melbourne; and 
- $A 38.75 million for a new rail link to the Port of Adelaide. 
 In addition, the Australian Rail Track Corporat ion (ARTC), an Australian Government owned 
company, will invest over $A 900 million in rail infrastructure for the Hunter Valley to directly assist 
coal exports through the Port of Newcastle.  Th e ARTC will also be constructing the over $A 200 
million Southern Sydney Freight Line that will pr ovide a dedicated freight rail line through southern 
Sydney to Sydney Port.  
Question: 
(Paragraph 110 ) 
 We note that under the bilateral Air Services Agre ement Australia allows consecutive cabotage for 
New Zealand Airlines only. Our questions are:  
 Could we please be informed of the conditions for airlines designated as single aviation market 
(SAM) carriers?    
Answer: 
 
For an airline to be authorised as a Single Av iation Market (SAM) airline under the Agreement 
between the Government of Australia and the Gove rnment of New Zealand Re lating to Air Services, 
it must meet the following criteria:  
a) the airline is majority owned and effectively  controlled by nationals of either or both 
Parties: and 
b) the airline has, as members of its board, at  least a two-thirds majority of nationals of 
either or both Parties;  and 
c) the airline has, as chairperson of its board, a  national or either Party; and 
d) the airlines has its head office in th e territory  of either Party; and 
e) the airline has its operational base in the  territory of either Party; and WT/TPR/M/178/Add.1 
Page 246  
 
  f) the airline is qualified to meet the conditi ons  prescribed under the laws, regulations 
and rules normally applied to the  operation of air transport by the Party considering 
the application or  applications; and 
g) the airline holds the necessary operating  permits; and 
h) the standards set forth in Article 5 (Safet y) and  Article 6 (Security) [of the Air 
Services Agreement] are being  maintained. 
 
Question: 
We would like to seek Australia's view on this grant ing of consecutive cabotage to one airline only in 
the context of Article 7 of the 1944 Chicago Con vention, which stipulates each contracting State 
undertakes not to enter into any arrangements whic h specifically grant any such privilege on an 
exclusive basis.  
Answer: Under Australia's air services agreement with New Zealand, airlines authorised as SAM Airlines may 
operate between points in Australia and/or New Zealand, that is, they may operate consecutive 
cabotage and stand alone cabotage services.  These ri ghts have not been granted to one airline only 
but are available to airlines authorised as SAM carrier s by either Australia or New Zealand.  There is 
no limit on the number of airlines that may be authorised as SAM airlines. 
The Australia-New Zealand air services agreement do es not grant these rights exclusively to the other 
Party.  It is open to either Party to negotiate si milar rights with other contacting states where there are 
national interest benefits in doing so. 
Australia allows foreign persons (i ncluding foreign airlines) to acquire up to 100 per cent of the equity 
of an Australian airline, unless this is contrary to the national interest.  This allows foreign airlines 
that are prepared to invest over the longer term  to establish a domestic network within Australia. 
Hong Kong:
 
Question: 
(Paragraph 102)  We note that both domestic and foreign-flagged vessels a re required to obtain a licence or a permit to 
operate in Australia’s coastal shipping.  It is however stated in the Secretariat Report that “permits 
are almost always related to foreign-flagged vessel s”.  We would appreciate if Australia could 
elaborate the rationale behind this phenomenon. Gratef ul if Australia could also clarify whether there 
are restrictions on commercial presence with resp ect to foreign equity holdings in domestic shipping 
liner.   
 
Answer: 
 
Vessels engaged in the coastal trades are require d to either obtain a licence or a permit.  The 
requirement applies to both domestic and foreign flagged vessels.  The decision to operate under a licence or permit is  a commercial one for each individual shipping 
company.  It is a matter of fact, not policy, that most foreign flag ships have chosen to operate under 
permits.  There are no restrictions on foreign equity in dom estic shipping lines.  However, there is a broad 
regulatory framework for foreign investment in domestic entities which is detailed in the Foreign 
Acquisitions and Takeovers Act 1975 .  WT/TPR/M/178/Add.1 
 Page 247 
 
 
  Japan:  
 Question: 
(Paragraph 103) 
 What is the rationale for the regulation requiring international liner cargo shipping operators to and 
from Australia to be represented by an Australian resident? Is there a plan to review the 
requirement?  
Answer: 
 
The Part X provision of the Trade Practices Act 1974 requires that an ocean carrier have a registered 
agent who is a resident of Australia is long sta nding.  An ocean carrier’s registered agent is 
responsible for receiving important information, such  as the legal notices, on behalf of the carrier.  
Part X requires the agent to be a resident of Aust ralia, whether or not the carrier is a member of a 
conference.  This is important to ensure that th e notices are brought to the attention of ocean carriers 
quickly and with assurance, particularly where a r esponse is time critical.  There are no plans to 
review the requirement.  Question: (Paragraph 105)  In recent years, the demand for coal in Asian countries has grown rapidly. Australian processing 
facilities, however, are not sufficient to respond to  increasing demand. Demurrage has consequently 
become a serious problem, particularly in Newc astle, New South Wales – Australia’s largest coal 
shipping port. For suppliers, th e increase of demurrage affects revenue, while delays in shipping 
schedules prove a burden for recipients. Overall, this  problem serves as an impediment to trade. What 
measures will the Australian Governme nt take to solve this problem?   
 
Answer: 
 
As mentioned above, under Austra lia’s federal system the development, maintenance and 
management of ports and harbours falls within state and territory jurisdiction.  In general, ports are 
expanding capacity and have long term expansion plans in place. 
 For example, at the Port of Newcastle, the New So uth Wales Treasurer, Minister for Infrastructure 
and Minister for the Hunter launched the complete d Port Waratah Coal Services Project 3D on 22 
February 2007.  The $A 170 million project increase s the Port of Newcastle’s coal export capability 
from 89 million tonnes per year to 102 million tonnes per year.  In addition, Port Waratah Coal Services, which operates the Carrington and Kooragang coal loading 
terminals at Newcastle, made an applicati on to the Australian Competition and Consumer 
Commission to reinstate the Capacity Balancing Sy stem for 2007.  This is a measure designed to 
address ship queuing at the Port of Newcas tle.  The Australian Competition and Consumer 
Commission issued a draft determination on 4 April 2007 proposing to grant authorisation to the Capacity Balancing System.  Further, on 21 November 2006 Port Waratah Coal  Services announced that it is seeking approval 
from the New South Wales Department of Pla nning to increase the throughput capacity of the 
Kooragang terminal at Newcastle to 120 million to nnes a year, using the existing approved plant and 
equipment.  WT/TPR/M/178/Add.1 
Page 248  
 
  The Australian Rail Track Corporation (ARTC), an Australian Government owned company, will 
invest over $A 900 million in rail infrastructure for th e Hunter Valley to directly assist coal exports 
through the Port of Newcastle. 
 
Mexico:
 
 Question: 
(Paragraph 110) 
 Australia permits the establishment of domestic ai rlines with up to 100 per cent foreign ownership, 
except in the case of the Australian airline Qantas. 
 Why does Australia not allow a greater share of foreign capital in Qantas?  Does the Government 
have any plans to alter this situation? 
 
Answer:  
In February 2006 the Australian Government announced an updated policy for Australia’s 
international air services, following an extensive revi ew of Australia's international aviation policy.  
Australia is seeking the establishment of truly ope n aviation markets consistent with the national 
interest.  
 
The Qantas Sale Act 1992 restricts foreign persons fro m owning relevant interests in more than 49 per 
cent of the total value of the issued share capital of Qantas Airways Limited.  This restriction was 
considered in the above-mentioned review, and the Australian Government decided not to amend the 
foreign ownership limit.    Question:  Only airlines from New Zealand can offer cabot age services in Australia , thanks to an agreement 
between the two countries. 
 Does the Australian Government plan to allow oth er foreign airlines to offer cabotage services? 
 
Answer:  
For an airline to be authorised as a Single Av iation  Market (SAM) airline under the Agreement 
between the Government of Australia and  the Gove rnment of New Zealand Relating to Air Services, 
it must meet the  following criteria:  
a) the airline is majority owned and effectively  controlled by nationals of either or both 
Parties: and 
b) the airline has, as members of its board, at  least a two-thirds majority of nationals of 
either or both Parties;  and 
c) the airline has, as chairperson of its board, a  national or either Party; and 
d) the airlines has its head office in th e territory  of either Party; and 
e) the airline has its operational base in the  territory of either Party; and 
f) the airline is qualified to meet the conditi ons  prescribed under the laws, regulations 
and rules normally applied to the  operation of air transport by the Party considering 
the application or  applications; and 
g) the airline holds the necessary operating  permits; and 
h) the standards set forth in Article 5 (Safet y) and  Article 6 (Security) [of the Air 
Services Agreement] are being  maintained.  WT/TPR/M/178/Add.1 
 Page 249 
 
 
  Under Australia's air services agreement with New Zealand, airlines authorised as SAM Airlines may 
operate between points in Australia and/or New Zealand, that is, they may operate consecutive 
cabotage and stand alone cabotage services.  These ri ghts have not been granted to one airline only 
but are available to airlines authorised as SAM carrier s by either Australia or New Zealand.  There is 
no limit on the number of airlines that may be authorised as SAM airlines. 
 
The Australia-New Zealand air services agreement do es not grant these rights exclusively to the other 
Party.  It is therefore open to either Party to ne gotiate similar rights with other contacting states where 
there are national interest benefits in doing so.  Singapore:
 
 Question:  We note that in the area of maritime transport servi ces, Australia has restrictions in areas such as 
ship registration in Australia; Australia representation for inter national liner cargo shipping 
services, cabotage and offshore transport services. Does Australia plan to und ertake liberalization 
measures in these areas?  Answer: 
 The requirements of the Shipping Registration Act 1981  are currently the subject of a review being 
undertaken by the Australian Department of Transport and Regional Services. 
 The provision in Part X of the Trade Practices Act 1974 requiring that an ocean carrier have a 
registered agent who is a resident of Australia is of  long standing.  An ocean carrier’s registered agent 
is responsible for receiving important information, su ch as the legal notices, on behalf of the carrier.  
The requirement is aimed at ensuring that notices are brought to the attention of ocean carriers quickly 
and with assurance, particularly where a response is time critical.  Part VI of the Navigation Act 1912  covering the coastal trade applies equally to both domestic and 
foreign flagged vessels.  Foreign vessels are able to  obtain licences and permits – there is no flag or 
crew nationality criteria.  Offshore trans port services are not regulated under Part VI. 
 
Question: 
 The inquiry report on Part X of the Trade Prac tices Act describes the conditions under which 
international liner opera tors are permitted to operate confer ences (i.e. to provide services for 
Australian exporters and importers) while provid ing safeguards against the abuse of conference 
power. The inquiry report has recommended for pa rt X to be repealed and proposed a series of 
amendments if Part X was to be retained. What a re Australia's reactions to the inquiry report? Would 
Australia be following up on the recommendations in the inquiry report? Would Part X be repealed? 
If not, what amendments would be made to Part X? 
 
Answer: 
 
On 4 August 2006, the Australian Treasurer and th e Minister for Transport and Regional Services 
released a joint media statement which details the Australian Government’s response to the 
Productivity Commission review of Part X of the Trade Practices Act 1974 .  The press release may be 
accessed at:  www.treasurer.gov.au /tsr/content/pressreleases/2006/081.asp. 
 Briefly, Part X is to be retained but amende d to promote further competitive reform of the 
international liner cargo shipping sector in Australia. WT/TPR/M/178/Add.1 
Page 250  
 
  Question: 
 Australia stated in a submission on Air Transport S ervices that capacity and route rights available to 
foreign airlines serving Australia will be add ressed as an implementation of the Australian 
Government's international aviation policy which continues through agency b ilateral negotiations.  
We note Australia's progressive stanc e towards the liberalisation of air transport services, and invite 
Australia to share its approach towards the libera lisation of foreign carriers' access to and beyond 
Australia. 
 
Answer: 
 
Australia's international air services policy was outli ned in a media statement by the Minister for 
Transport and Regional Services on 21 February 2 006.  The statement and further information is 
available at:  www.dotars.gov.au/aviation/international/policy.aspx.  
The Australian Government has one of the most  liberal and pro-competition aviation policy 
approaches in the world, and continues to open its  markets.  The right of establishment of domestic 
airlines; open cargo (including fifth freedom) access; open access to regional international airport; and our approach to negotiating capacity ahead of demand are a clear demonstration of this.  
 In implementing its air services policy, Australia  seeks to balance broad competition, trade and 
economic interests, foster domestically based Austra lian airlines and attract and retain major foreign 
airlines to Australia to provide competition a nd improve our access to global trade and tourism 
markets.  In doing so, Australia seeks equitabl e fifth freedom 'beyond' rights from its negotiating 
partners to address the commercial and networ k advantage airlines from major hubs have. 
 
Australia has few 'beyond' rights to exchange.  Fu rther fifth freedom access to the Australia-United 
States market is not being considered at this time, in part to allow the opportunity for potential new 
Australia entrants to the market, however access will be continue to be traded in the future where in 
the national interest.  Australia has negotiated 'open capacity' agreemen ts with Singapore, New Zealand and the United 
Kingdom and highly liberal arrangements have been r eached with many of its trading partners, where 
such arrangements have been able to be agreed.  We will continue  to negotiate capacity ahead of 
demand with our trading partners, consis tent with the overall national interest. 
 
__________