WORLD TRADE  
ORGANIZATION  WT/REG185/3 
7 August 2006 
 
 (06-3798) 
Committee on Regional Trade Agreements  
  
 
 
 
   
 
    
 
     
 
    
 
This report, prepared for the examina tion of the Free Trade Agreement between 
Thailand and Australia, has been drawn up by the WTO Secretariat on its own responsibility.  The report was requested by the Parties and prepared in consultation 
with them in accordance with the Guide lines on Procedures to Improve and Facilitate 
the Examination Process (document WT/REG/W/15/Add.1).  
 
Any technical questions arising from this report may be addressed to Mrs. Carmen 
Pont-Vieira (tel:  022/739 5144) or Ms. Jo-Ann Crawford (tel:  022/739 5422).  
FACTUAL PRESENTATION 
 
Free Trade Agreement between  
Thailand and Australia 
(Goods) 
 
Report by the Secretariat WT/REG185/3 
Page 2  
 
TABLE OF CONTENTS 
 
Page  
 
I. TRADE ENVIRONMENT 3  
II. TREATY CHARACTER ISTIC ELEMENTS 5  
A. BACKGROUND INFORMATION  5 
B. NATIONAL TREATMENT AND MARKET ACCESS PROVISIONS OF THE AGREEMENT  6 
1. Import duties and charges, and quantitative restrictions 6  
(a) General provisions  6 
(b) Overall tariff liberalization  6 
(c) Australia's liberalization schedule  7 
(d) Thailand's liberalization schedule  9 
2. Rules of origin 10  
3. Export duties and charges, and quantitative restrictions 12  
C. REGULATORY PROVISIONS OF THE AGREEMENT  12 
1. Standards 12  
(a) Industrial technical  barriers to trade  12 
(b) Sanitary and phytosanitary measures and food standards  13 
2. Safeguard mechanisms 14  
(a) Global safeguards  14 
(b) Bilateral actions  14 
(c) Special safeguards  14 
3. Anti-dumping and coun tervailing measures 16  
4. Subsidies and state aid 16  
5. Other regulations 16  
(a) Customs-related procedures  16 
(b) Electronic commerce  17 
(c) Competition policy  17 
(d) Intellectual property  17 
(e) Government procurement  18 
D. SECTOR -SPECIFIC PROVISIONS OF THE AGREEMENT  18 
E. GENERAL PROVISIONS OF THE AGREEMENT  18 
1. Exceptions and reservations 18  
2. Accession 18  
3. Institutional framework 18  
4. Dispute settlement 19  
5. Relationship with other agreements concluded by the Parties 20  
ANNEX  22 
 Indicators of trade liberalization under the TAFTA 22  
 
 
 
  WT/REG185/3 
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THAILAND-AUSTRALIA FREE TRADE AGREEMENT (GOODS) 
 
Factual Presentation by the Secretariat 
 
I. TRADE ENVIRONMENT 
1. The Parties to the Thailand-Australia Fr ee Trade Agreement (hereafter TAFTA or 
Agreement) are both among the world's thirty top me rchandise traders:  with total exports of $86 
billion and imports of $109 billion, Australia ra nked in 2004 as the 26th top exporter and the 19th top 
importer; with exports of $97 billion and im ports of $95 billion, Thailand ranked as the 24th top 
exporter and the 25th top importer in that year.  Although of similar size, the two economies showed 
quite different average trade/GDP ratios in 2002-2004 with Australia's ratio being a relatively low 39 
and Thailand's a relatively high 128. 
2. Trade between the Parties accounted for about 2. 5 per cent of their combined world imports 
in 2004.  Developments in recent years ar e pictured in Charts I.1 and I.2 below. 
Chart I.1 – Australia:  Merchandise imports from  and exports to world and Thailand, 1997-2004 
012345
1997 1998 1999 2000 2001 2002 2003 2004-302070120
Imports from Thailand Exports to Thailand
Total imports Total exports$billion $ billio n
(left-hand scale)(right-hand scale)
 
 Source :  United Nations, COMTRADE . 
 
 
Chart I.2 – Thailand:  Merchandise imports from  and exports to world and Australia, 1997-2004 
024
1997 1998 1999 2000 2001 2002 2003 2004020406080100120
Imports from Australia Exports to Australia
Total imports Total exports$ billion $ billio n
(left-hand scale)(right-hand scale)
  Source :  International Monetary Fund, Direction of Trade Statistics . 
 WT/REG185/3 
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3. The commodity structure of trade among the Parti es, as well as of their imports and exports to 
the world in 2003, is shown in Chart I.3, on the basis of HS section product categories. 
Chart I.3 – Thailand and Australia:  Product composition of merchandise trade, 2003
 
Source :  United Nations, COMTRADE . 
 
4. Three product categories - vehicles and aircraft, machinery, and prepared foods - accounted 
for more than 60 per cent of Australia's imports from Thailand in 2003; pearls and plastics accounted 
for a further 12.8 per cent.  Thailand's four largest  export product categories - machinery, plastics, 
prepared foods, and textiles - made up 61.6 per cen t of Thailand's total exports in 2003 and accounted 
for 42.5 per cent of Australia 's imports from Thailand. Total: $2.3 billion  Australia's Imports from Thailand Thailand's Imports from Australia
Total:  $15.8 billion 
Total:  $84.5 billion  Australia's Global Imports Thailand's Global Imports  
Total:  $75.8 billion  
Australia's Global Exports Thailand's Global Exports  
Total:  $70.2 billion  Total:  $80.3 billion  
Machinery
28.0
Vehicles
Aircraft
17.8 Chemicals  
10.2 Mineral  
Products  
8.1 Base Metals  
4.7 Textiles  
4.4 Plastics  
4.3 Optical  
4.2 Other 
18.3 
Vehicles
Aircraft
27.0
Machinery
24.3Prepared Food  
8.8 Pearls 
6.4 Plastics  
6.4 Mineral Products  
5.3 Base Metals  
4.4 Textiles  
3.0 Other 
14.1 
Mineral Products
29.1
Animal Products
8.9
Base Metals  
8.4 Chemicals  
8.0 Not 
Classified  
7.3 Machinery  
6.5 Pearls 
6.2 Vehicles  
Aircraft  
5.2 Other
11.1Prepared Foods  
4.4 
Vegetable Products  
4.9 
Machinery
38.2 
Mineral Products  
12.3 Base Metals
11.1Chemicals
8.8Vehicles,Aircraft
5.6Plastics
4.9Other
10.5
Textiles
3.2Pearls
2.9Optical
2.4
Base Metals
30.7 
Pearls 
18.9 Textiles
9.1Mineral
Products
8.7Chemicals
7.3Machinery
5.3Other
7.6
Vegetable Products
6.5Animal Products
3.2Raw Hides
2.6
Machinery  
37.4 
Prepared Foods  
7.5Textiles
6.9Vehicles, Aircraft
6.5Vegetable Products
3.6Other
21.5
Base Metals
3.6Animal Products
3.2
Plastics  
9.8  WT/REG185/3 
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5. Four product categories - base metals, pearls , textiles and mineral products - accounted for 
more than two thirds of Thailand's imports from Au stralia in 2003.  Australia's four largest export 
product categories - mineral products, animal products , base metals and chemicals - made up 54.4 per 
cent of Australia's total exports in 2003 and acc ounted for 49.9 per cent of Thailand's imports from 
Australia. 
 
II. TREATY CHARACTERISTIC ELEMENTS 
A. BACKGROUND INFORMATION  
6. The TAFTA was signed by the Government of Th ailand and the Government of Australia on 
5 July 2004;  it entered into force on 1 January 2005. 
7. On 5 January 2005, the Parties notified the TAFTA to the WTO under Article XXIV:7(a) of 
the GATT 1994 and the Understanding on the Interp retation of Article XXIV of GATT 1994, as an 
agreement forming a free-tr ade area (WT/REG185/N/1).1  The terms of reference for the examination 
of the Agreement were adopted by the Counc il for Trade in Goods on 11 March 2005 
(WT/REG185/2).  The text of the Agreement was circulated to the Members as document 
WT/REG185/1, and is also available, together with its Annexes, on the Parties'  official websites (URL 
addresses:  http://www.thaifta.com/fta thau.pdf , http://www.thaifta.com/english/index_eng.html  and 
http://www.dfat.gov.au/trade/negotiations/aust-thai/tafta_toc.html ). 
8. The Agreement is composed of 19 Chapters as follows: 
Preamble 
Chapter 1 Objectives and Definitions 
Chapter 2 Trade in Goods 
Chapter 3 Customs Procedures 
Chapter 4 Rules of Origin 
Chapter 5 Safeguards 
Chapter 6 Sanitary and Phytosanita ry Measures and Food Standards 
Chapter 7 Industrial Technical Barriers to Trade 
Chapter 8 Trade in Services 
Chapter 9 Investment 
Chapter 10 Movement of Natural Persons 
Chapter 11 Electronic Commerce 
Chapter 12 Competition Policy 
Chapter 13 Intellectual Property 
Chapter 14 Transparent Administration of Laws and Regulations 
Chapter 15 Government Procurement 
Chapter 16 General Exceptions 
Chapter 17 Institutional Provisions 
Chapter 18 Consultations and Dispute Settlement 
Chapter 19 Final Provisions 
 
9. The Agreement contains five annexes, in pa rticular Annex 2 on El imination of Customs 
Duties (Schedules) and Annex 4.1 on Product-Specifi c Rules of Origin.  Two side letters and a 
Memorandum of Understanding are also an integral pa rt of the Agreement; they relate to tariff-rate 
quotas, services and the list of developing countries and places in the context of rules of origin.  
                                                      
1 Also, the Parties jointly notified the TAFTA under GATS Article V:7(a), as an agreement also 
providing for the liberalization of trade in services (S/C/N/311). WT/REG185/3 
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10. No overall implementation period is explicitly stated  in the Agreement.  However, the Parties' 
schedules of concessions foresee periods of up to 20 years (Thailand) and 10 years (Australia) for the 
elimination of duties on a few products. 
B. N
ATIONAL TREATMENT AND MARKET ACCESS PROVISIONS OF THE AGREEMENT  
1. Import duties and charges, and quantitative restrictions 
 (a) General provisions 
11. Each Party accords national treatment to the goods of the other Party in accordance with 
Article III of the GATT 1994 (Article 202 of the Agreement). 
12. The Parties cannot increase existing, or in troduce new customs duties on imports of an 
originating good (Article  203.2).  Trade liberalization takes place on the basis of a positive list 
approach, and covers Chapters 1- 97 of the Harmonised System (HS).  Article 203.3 provides for the 
progressive elimination of customs duties on origina ting goods traded between the Parties, starting 
from the date of entry into force and in accordance  with various stages listed in each Party’s Tariff 
Schedule (Annex 2).  The Schedules indicate, for each  tariff item, the base rate as well as the reduced 
rates at each stage.2  Duties on bilateral imports not freed at en try into force are to be eliminated in 
accordance with different timetables, either through their progressive reduction or immediate zeroing 
after a period in which duties are kept constant.  Tariff reductions take place on 1 January of each 
given year.  The elimination of customs duties may be accelerated unilaterally or as a result of consultations requested by either Party (Article 204).  Article 203.4 provides that either Party may 
adopt/maintain measures to allocate in-quota imports  provided that such measures do not have import 
restrictive effects additional to those caused by th e imposition of the tariff-rate quota (TRQ) itself. 
13. As regards non-tariff measures, the Parties ar e not allowed to adopt or maintain any 
prohibition or restriction on the import of any good of the other Party, except in accordance with Article XI of the GATT (Article 209).  A few excep tions to this general rule are provided for in 
Chapter 16 of the Agreement (see paragraph 59 below). 
 (b) Overall tariff liberalization
3 
14. The elimination of tariffs applicable between the Parties is revealed in the corresponding 
TAFTA schedules.  The scope of tariff liberaliza tion can be measured in terms of the number of 
affected tariff lines and in terms of the value of a ffected imports.  The share of imports at duty-free 
rates offers an insight into the liberalization of pr oducts currently traded among the parties, while the 
percentage of duty-free tariff lines points to the longe r-term potential trade effects of the Agreement. 
15. As from 2005 (entry into force of the Agreement), 83 per cent of Australia 's total tariff lines 
were free for products of Thai origin;4 in terms of 2002-2004 imports from Thailand, the 
corresponding figure also amounts to 83 per cent.5  By 2010, a further 13 per cent of tariff lines, or   
                                                      
2 For Australia, the base rates are the Australian tariff rates applying to Thailand in 2004 prior to 
TAFTA entering into force.  These are based on the MFN rate with some developing country preferences.  For 
Thailand, the base rate is the general rate as of 1 July 2003 with an exception of TRQ products where the WTO 
bound rate is used as the base rate. 
3 Unless otherwise specified, all statistics, tables and charts contained in this document have been 
prepared on the basis of data  provided by the Parties. 
4 Australia's tariff schedule is composed of 6,112 lines at the HS 8-digit level.  In general, duties are 
defined ad valorem ; five lines hold specific duties only; and twelve lines contain both ad valorem  and specific 
duties. 
5 Trade figures are based on the av erage value of imports into Australia from Thailand for the period 
2002-2004, which covered 2,544 tariff lines.  Since trade data are available at the HS 6-digit level, where  WT/REG185/3 
 Page 7 
 
 
16 per cent of 2002-2004 imports, is  to be duty-free.  The Agreement provides that Australia will not 
apply any customs duty for any product of Thai origin as from 2015.  (See Chart II.1.) 
Chart II.1 – Overall Duty Elimination in TAFTA 
   
16. Upon entry into force, Thailand  liberalized its duties on Australian goods for 49 per cent of its 
tariff lines;6 the corresponding share in terms of Thailand's 2002-2004 imports from Australia is       
79 per cent.7  After ten years, an additional 50 per cent of Thailand's tariff lines, or 20 per cent of 
2002-2004 imports, is scheduled to be liberalized.  By 2025, all tariff lines will be duty-free for 
products of Australian origin.  (See Chart II.1.)  
 (c) Australia's liberalization schedule  
17. The base rates used by Australia for implemen ting its tariff liberalization scheme already 
provided for 51 per cent of tariff lines being duty free be fore the entry into force of the Agreement.  
Most of the additional 33 per cent of tariff lines fre ed on entry into force hold base rates of 3-5 per 
cent.8  By 2010, all tariff lines with a 10 per cent ba se rate are scheduled to be free, as well as over 
                                                                                                                                                                     
multiple staging categories in Australia's tariff liberalizati on schedule (HS 8-digit level) apply to a single import, 
the longest staging period has been us ed, thus understating somewh at the pace of liberaliza tion.  This occurs on 
129 HS-6 digit lines which account for 3.9 per cent of average imports in 2002-2004. 
6 Thailand's tariff schedule is composed of 6,257 lines, usually defined at the HS-2002 6-digit level, 
although a few lines at HS 7-digit level are included.  In this document, the 774 ex tariff lines contained in the 
schedule have been counted the same as standard HS-6 digit lines.  Duties are defined ad valorem  in 4,362 lines; 
85 lines hold specific duties only; and 1,810 lines contain both ad valorem  and specific duties. 
7 Trade statistics have been based on the average value of imports into Thailand from Australia for the 
period 2002-2004, available at the tariff line level.  During 2002-2004, Thailand's imports from Australia took place on 3,069 tariff lines which represen ts 49 per cent of total tariff lines. 
8 Also, all tariff lines holding specific-only or specific/ ad valorem  rates became duty-free at entry into 
force. 
0% 20% 40% 60% 80% 100%  Tariff linesTradeTariff linesTradeAUSTRALIA  
Entry into force Mid-term * End of implementation period THAILAND  
*For Australia 2010, for Thailand year 2015. WT/REG185/3 
Page 8  
 
one half of those holding a 15 per cen t rate.  Australia's five tariff lines with a base rate of 25 per cent 
are to be liberalized in 2015. 
Chart II.2 – Australia's Duty Elimination under the TAFTA 
0 1,000 2,000 3,000 4,000 5,000 6,000 7,00020052006200720082009201020112012201320142015
Base rate=0%Base rate=3-5%Base rate=25%
Base rate=15%
Base rate=10%Year of duty-free treatment
Number of dut y-free lines (cumulative) 
18. Table II.1 shows the number of HS 8-digit tari ff lines eligible for duty-free treatment by 
Australia after entry into force, organized by the y ear in which they are liberalized and the HS Section 
to which they pertain.  Out of the total of 1,0 25 products, only one is an agricultural product (under 
HS Chapter 16 - Preparations of meat and fish), subj ect to liberalization two years after the entry into 
force, while the rest cover a range of industrial pr oducts in 32 HS Chapters.  Most of the products 
falling within the longest period of ten years are textiles. 
Table II.1 – Australia:  Products subj ect to scheduled duty-free treatment 
HS Section and description Year of duty-free treatment  
 2007 2008 2009 2010 2015 Total 
Total 1 254 2 529 239 1,025 
IV Prepared foodstuffs; Beverages; Tobacco   1     1 
VI Products of the chemical or allied industries   17  1  18 
VII Plastics and articles thereof; Ru bber and articles thereof  56  19 2 77 
VIII Raw hides and skins, leather, furskins, etc.   3  6 3 12 
XI Textiles and textile articles  175  382 234 791 
XII Footwear, headgear, umbrellas, sun umbrellas, etc.    2 27  29 
XIII Articles of stone, plaster, ce ment, asbestos, etc.     3  3 
XV Base metals and articles of base metal    16  16 
XVI Machinery and mechanical appliances; etc.    46  46 
XVII Vehicles, aircraft, vessels and asso ciated transport equipment     20  20 
XVIII Optical, photographic, cinematogr aphic, measuring, etc.  3  6  9 
XX Miscellaneous manufactured articles     3  3 
  WT/REG185/3 
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 (d) Thailand's liberalization schedule  
19. At entry into force of the Agreement, Thai im ports of Australian origin were free of duty on 
3,071 tariff lines.9  These included items which were previous ly duty-free and most of the tariff lines 
on which Thailand's base ra te ranged from 1 to 5 per cent, as we ll as a few products holding higher 
base rates.  By 2010, only 362 tariff lines (i.e. 6 pe r cent of the total) and the 23 lines under tariff-rate 
quotas (TRQs) will not yet be fully liberalized by Th ailand; by 2020, duties will remain in five tariff 
lines, of which four under TRQs. 
Chart II.3 – Thailand's Duty Elimination under the TAFTA10 
0 1,000 2,000 3,000 4,000 5,000 6,000 7,00020052007200920112013201520172019
Base rate=0-0.1%Base rate=1-5%
Base rate>40%Base rate=
5.1-10%Year of duty-free treatment
Number of duty-free lines (cumulative)Base rate=
10.1-20%Base rate=
20.1-40%
 
20. The TAFTA provides that Thailand may apply tariff-rate quotas (TRQs) on 23 agricultural 
products imported from Australia, with decreasing in-quota duty rates and increasing quota levels 
over time:  on 18 products, quota and tariff elimination is scheduled for 2020, while for the remaining 
five products the applicable deadline for elimination is 2025.  (See Table II.3.) 
Table II.2 – Thailand:  Tariff-Rate Quotas for Certain Agricultural Sensitive Products11 
TRQ at entry into force 
(2005) Liberalization scheme HS line number (Product description)  
Quantity In-quota duty Quantity In-quota duty  
040110, 040120, 040130 (Milk and cream, not 
concentrated nor sweetened) 
220290ex (Beverages containing milk) 120 tons 
040210 (Milk and cream, concentrated or containing 
added sugar etc.) 2,200 tons 20% Until 2025 : 
+17% every 
5 years Until 2025 : 
-1 % point 
every year 
                                                      
9 Tariff lines with the same HS code but different product descriptions and tariff treatment are counted 
as separate tariff lines.  
10 The chart does not show the 23 lines under TRQs nor  85 tariff lines holding specific base rates only.  
For tariff lines with both specific and ad valorem  base rates, the latter were taken into account. 
11 The out-of-quota duty rate for all these items is the WTO bound rate with margins of preference of 
10%. WT/REG185/3 
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TRQ at entry into force 
(2005) Liberalization scheme HS line number (Product description)  
Quantity In-quota duty Quantity In-quota duty  
090111, 090112, 090121, 090122, 090190 (Coffee) 0.525 tons 
090210, 090220, 090230, 090240 (Tea) 62.5 tons 30% 
070110, 070190 (Potatoes, fresh or chilled) 30.2 tons 27% Until 2020 : 
-1 or -2 % point 
per year 
100590 (Maize/corn, other than seed) 5,470 tons 20% 
170111, 170112, 170191, 170199 (Cane or beet sugar and chemically pure sucrose, etc.) 1,376 tons 65% Until 2020
: 
+5% per year 
21011, 210112 (Extracts, esse nces and concentrates 
of coffee, etc.) 13.4 tons 40% Until 2020 : 
+10% per 
year Until 2020 : 
non-linear 
reduction (-1/3 
by 2010; -2/3 
by 2015) 
 
21. Table II.3 shows the staged tariff liberalizati on for Thailand's imports from Australia, by the 
HS Section to which they pertain and the year of duty elimination.  Out of the total of 3,186 products, 
537 (or 17 per cent) are agricultural products, with the rest covering a broad range of industrial 
products.  The majority of products falling in the tent h year of liberalization (2015) are textiles, while 
all 52 products subject to liberalization in 2020 and th e five products subject to liberalization in 2025 
are agricultural products. 
Table II.3 – Thailand:  Products subj ect to scheduled duty-free treatment12 
Year of duty-free treatment HS Section and description 2006 2007 2008 2009 2010 2015 2020 2025 Total 
Total 4 328 33 593 1,843 328 52 5 3,186 
I Live animals; Animal products    67 63 9 34 4 177 
II Vegetable products    10 155 2 12  179 
III Animal or vegetable fats and oils etc.    3 36    39 
IV Prepared foodstuffs; Beverages; etc.     36 108 14 6 1 165 
V Mineral products  6  12 3    21 
VI Products of the chemical or allied inds.   14 5 44 51 2   116 
VII Plastics and articles thereof; Rubber etc.  17 14 38 152 2   223 
VIII Raw hides and skins, leather, etc.    1 2 31 3   37 
IX Wood and articles of wood;  etc.  7  7 49    63 
X Pulp of wood etc..  21  62 60 3   146 
XI Textiles and textile articles  1  147 401 236   784 
XII Footwear, headgear, umbrellas, etc.     8 47    55 
XIII Articles of stone, plaster, cement, etc.   1  10 44    55 
XV Base metals and articles of  base metal  32 9 53 215 57   366 
XVI Machinery and mech anical appls.; etc. 4 139 4 62 217    426 
XVII Vehicles, aircraft, vessels etc.  3  13 95    111 
XVIII Optical, photographic, etc.  86  16 41    143 
XX Miscellaneous manufactured articles   1  3 75    79 
 
2. Rules of origin 
22. Disciplines regarding rules of origin are set out in Chapter 4 of the Agreement.  Article 401 
defines the terms used and Articles 402-406 provide the substantive rules.  Articles 407-415, as well 
as Article 308, contain the customs procedures designed to administer and enforce the rules of origin, 
as detailed in paragraphs 47-52 below. 
23. Basically, a good will be considered  as "originating" (Article 402): 
(i) when wholly obtained or produced in the territory of the Parties;13 or 
                                                      
12 This table includes those 23 tariff lines subject to tariff quotas which are progressively liberalized to 
zero.  Only the in-quota tariff rate is taken into account. 
13 This concept applies to goods that are entirely grow n, fished or mined in the territory of a Party, as 
well as to waste and scrap derived from production in the territory of a Party.   WT/REG185/3 
 Page 11 
 
 
(ii) when made up entirely of materials originating in the TAFTA area; or 
(iii) when satisfying the specific requirements la id down in Annex 4.1 of the Agreement – 
normally a change in tariff classification (C TC) for non-originating materials, or 
(iv) when the value of all non-originating materials that do not undergo the required CTC 
does not exceed 10 per cent of the f.o.b. value of the good (tolerance  rule).14 
24. The Agreement does not provide for regime-wide ru les of origin; rather it lists (in Annex 4) 
the specific criteria that non-originating materials have to meet for a good incorporating these materials to acquire originating status. 
25. In the vast majority of cases, origin is gran ted if the final production process takes place in 
one of the Parties and there is a change in th e tariff classification (CTC) of all non-originating 
materials.  The CTC requirement is predominantly de fined at the HS subheading (CTS, 6-digit) level, 
in particular for chemicals and machinery.  Chang es specified at the HS heading (CTH, 4-digit) level 
are the second most common rule, in particular for fur and skins, wooden and cellulose products and 
in minerals and base metals.  Changes into h eadings from other chapters are mainly found in 
agricultural and textile goods, whereas changes fro m chapters into subheadings, although rare, are 
frequent under HS Section 96 (Miscellaneous ma nufactured articles).  Exceptionally (textiles), 
changes from the same chapter, head ing or subheading are not allowed. 
26. In some cases, requirements concerning the mi nimum regional value content (RVC) of a good 
apply either jointly with a CTC requirement (e.g., for most textile products and many base metals) or 
instead of the CTC (e.g., for machinery).  The RVC
15 foresees three different minimum thresholds, 
namely 55 per cent for textiles, and 40 or 45 per cent for other products.  As provided in Article 403.2 
and Annex 4.1, for all goods falling in HS Chapters 50-64 , non-originating materials from developing 
countries/places may contribute towards the RVC up to a maximum of 25 per cent of the f.o.b. value of the good.
16  This provision is to expire 20 years after the entry into force of the Agreement;  the list 
of countries/places benefiting from it is included in a Memorandum of Unde rstanding annexed to the 
Agreement. 
27. Chemical products are considered as "originati ng" if they are the product of a chemical 
reaction, as defined in Annex 4.1,  whether or not they meet rul es specified for each heading or 
subheading.  In a few cases, technical tests appl y, requiring that some production processes take place 
in the TAFTA area.  For goods belonging to Chapte r 20 (preparations of vegetables, fruit, nuts or 
other parts of plants), in addition to specific rules,  originating status requires that the fresh product be 
wholly obtained or produced in the territory of the Parties. 
28. Full bilateral cumulation of origin is a llowed under the TAFTA (Article 402.1(b) and 
402.2)17.  In addition, the Agreement contains an absorption principle (Article 402.1(b)). 
29. There is no general definition in the TAFTA fo r minimal, non-qualifying operations carried 
out in the territory of the Parties which do not c onfer origin.  However, Annex 4 provides that goods 
under HS Chapters 1-40 shall not be considered as or iginating "solely by reason of mere dilution with 
water or another substance that do es not materially alter the characteristics of the good", and that for 
                                                      
14 An additional and transitional tolerance rule applies for material from developing countries and 
places (see paragraph 26). 
15 RVC = f.o.b. value of the good minus  c.i.f. value of all non-originating materials divided by f.o.b. 
value of the good. 
16 The normal tolerance rule of 10 per cent continues to apply in this case. 
17 This means that cumulation is allowed for goods/materials (originating goods/materials from one 
Party incorporated in the other Party's good are considered originating from the territory of the latter Party) and 
also for production processes.  A tracing test, whereby all originating parts/materials used in the final good and 
all processes made within the Parties count toward s the granting of origin, is therefore included. WT/REG185/3 
Page 12  
 
goods in HS Chapters 27-40, some operations (dis solving in water or other solvents, eliminating 
solvents, or adding or eliminating water of crysta llization) are not to be considered as "chemical 
reactions". 
30. Article 406 restricts outward processing to those operations necessary to preserve the goods 
or to transport them to the territory of the other Party. 
31. Additional rules in Articles 402.4-8 clarify how certain materials (standard accessories, spare 
parts or tools; packaging materials and containers ; and fungible goods) are to be treated/valued when 
determining the origin of goods. 
Rules of Origin: Basic Features at a Glance  
 
• No regime-wide rules of origin. 
• Product specific criteria: 
-  Wholly obtained or entirely produced goods 
-  In general, CTC at the heading or subheading levels 
-  In some cases, additional rule of RVC at 40%, 45% or 55%. In rare cases, RVC suffices to determine 
origin 
-  Process rules only occasionally. 
• For textiles, non-originating materials from developing countries not taken into account in the RVC 
calculation if representing less than 25% of the f.o.b. value of the good. 
• A "chemical reaction" applied to goods in Chapters 28-40.  
• Bilateral and full cumulation. 
• Tracing test applies. 
• Absorption principle applies. 
• Tolerance rule:  maximum of 10%; additional 25% for textiles and clothing from developing 
countries/places.  
• Possibility for the importing Party to obtain unpaid duties. 
• Outward-processing not authorized. 
• Transit through third parties authorized only under certain conditions. 
 
3. Export duties and charges, and quantitative restrictions 
32. The Parties are not allowed to adopt or maintain  any prohibition or restriction on the export or 
sale for export of any good, except in accordance with Article XI of the GATT (Article 209).  Since 
the Agreement does not deal with export duties, any existing MFN export duties and charges also 
apply to the Parties’ bilateral trade.18  
C. REGULATORY PROVISIONS OF THE AGREEMENT  
1. Standards 
 (a) Industrial technical barriers to trade  
33. Chapter 7 of the Agreement, which applies to all goods traded between the Parties, regardless 
of their origin (Article 704), provides the regulator y framework for standards, technical regulations 
                                                      
18 See Section III.3 of WT/TPR/S/104 and WT/TPR/S /123 for information on Australia and Thailand, 
respectively.   WT/REG185/3 
 Page 13 
 
 
and conformity assessment procedures.  It bui lds upon the mutual recognition arrangements 
developed voluntarily and within the APEC context (Article 702).19 
34. The Parties' rights and obligations under the WTO Technical Barriers to Trade (TBT) 
Agreement are reaffirmed (Article 703.1).  The Par ties are encouraged to work towards harmonizing 
and providing equivalence of technical regulations (Article 705), and to deve lop bilateral co-operation 
(Article 707), notably by establishing contact points.  Also, Article 706 contains specific 
commitments on conformity assessment procedures aiming, in particular, at making them compatible to the greatest extent practicable:  a Party shou ld, whenever possible, accept the results of a 
conformity assessment procedure conducted in the te rritory of the other Party; accredit, approve, 
licence or recognize the conformity assessment bodies of the other Party on terms no less favourable 
than those accorded to bodies in its  respective territory; give consider ation to the other Party’s request 
to negotiate mutual recognition agreements of c onformity assessment procedures; and utilize to the 
maximum possible extent those mutual recognition arrangements already in force.
20 
(b) Sanitary and phytosanitary measures and food standards 
35. Chapter 6 provides a framework for engaging on sanitary and phytosanitary (SPS) measures 
and food standards and applies to all SPS measures of  the Parties that may affect their trade in 
agricultural and food products, regard less of their origin (Article 603). 
36. The Parties reaffirm their existing rights a nd obligations under the WTO Agreements on SPS 
and, where relevant, on TBT (Article 604.1).  In ad dition, the Parties endeavour to work towards the 
harmonization of SPS measures and of other agricult ural and food standards (Article 605.1), as well 
as towards the equivalence of their standards, in cluding control, inspection and approval procedures 
(Article 606).21  According to Article 607, each Party is to  review, upon request, its inspection, testing 
and certification procedures to ensure that these ar e reasonable and necessary; the Article also calls 
for co-operation on a product trace-back system  of non-compliance notification of imported 
consignments for commodities subject to SPS measu res and other agricultural and food standards. 
37. Enhanced collaboration between the Parties in this  area is articulated in Article 608 - dealing 
with information exchange and co-operation - an d Article 609 - which provides for a consultative 
forum on SPS measures and food standards and estab lishes an Expert Group to review and monitor 
the implementation of Chapter 6 provisions.  Among ot her specific tasks, the Group is responsible for 
assessing progress on the lists of SPS and certifica tion priorities contained in Annex 6 and for 
resolving any disputes that may arise in connection w ith matters covered by Chapter 6.  At its first 
meeting, the Expert Group was to develop and impl ement a work programme with the initial phase to 
be completed and reviewed within two y ears of the signature of the Agreement.22 
 
                                                      
19 The Parties affirm their intention, in meeting the obligations under the WTO TBT Agreement, to 
adopt and apply the principles set out in the APEC Information Notes on Good Regulatory Practice in Technical 
Regulation (Article 703.4). 
20 Article 706.8 states that each Party shall take steps to implement Parts 1-3 of the APEC Mutual 
Recognition Arrangement for Conformity Assessment of Electrical and Electronic Equipment with respect to 
the other Party. 
21 Specific reference is made to the WTO, the Office International des Épizooties, the Codex 
Alimentarius and the International Plant Protection Convention. 
22 According to the Parties, a work programme setti ng out each Party's priorities for market access and 
SPS related cooperation and capacity build ing was established at the inaugural  meeting of the Expert Group in 
July 2005 (Canberra, Australia).  The work programme wa s reviewed and updated at the second meeting of the 
Expert Group in November 2005 (Melbourne, Australia) and agreed to work closely in the development of 
import risk analyses.  The programme for the expert group  is not published, but is available from the Parties on 
request. WT/REG185/3 
Page 14  
 
2. Safeguard mechanisms 
38. Chapter 5 lists the types of safeguard measu res permissible under the TAFTA and outlines the 
rules and procedures for administering such measures .  Part II of the Chapter provides for transitional 
safeguard measures, provisional measures and gl obal safeguards.  Part III provides for special 
safeguard measures for certain sen sitive agricultural products.  The requirements attached to those 
different types of safeguard actions are detailed below. 
(a) Global safeguards
 
39. With respect to global emergency action, the Pa rties retain their rights and obligations under 
Article XIX of GATT 1994, the WTO Agreement on Safeguards and any other relevant provision in 
the WTO Agreement.  Imports from the other Party may be excluded from the action if these are not a 
cause of serious injury or threat thereof, or of  serious damage or actual threat thereof; prior 
consultations are foreseen in cases where a Party considers imposing a global safeguard on imports from the other Party (Article 508). 
(b) Bilateral actions
 
40. For trade between the Parties, Articles 502 and 503 provide for bilateral emergency action on 
originating goods during the trans ition period.  The imposition of safeguard measures is allowed if 
there is an import surge, either  in absolute terms or relative to domestic production, leading to 
“serious damage” or threat thereof to the domestic industry of the importing Party producing a like or 
directly competitive good.23  The safeguard can be applied only following an investigation by the 
Party's competent authorities (Article 504.1).  Di sciplines regarding timing are multiple; they specify 
inter alia  the permissible duration of safeguard m easures and when these shall be terminated. 
41. Provisional safeguard measures (Article 505) ar e allowed in critical circumstances where 
delay would cause damage which would be diffi cult to repair; they require a preliminary 
determination that there is clear evidence that in creased imports have caused or are threatening to 
cause serious damage.  Any additional duties collected  as a result of the measure have to be refunded 
if the investigation fails to determine that the in creased imports from the other Party have caused or 
threatened to cause serious damage. 
(c) Special safeguards  
42. Article 509 contains disciplines related to sp ecial safeguard measures (SSG).  SSGs are 
allowed during a certain period for 41 (Thailand) and fi ve (Australia) agricultural tariff items listed in 
Annex 5 to the Agreement (see Table II.4 below) .  For each of these products, imports beyond a pre-
determined annual trigger level (i ncreased by 5 per cent every year) may, for the remainder of the 
calendar year, be charged with the current MFN tariff rate or the base rate, whichever is lower, in lieu 
of the preferential rate. 
                                                      
23 "Serious damage" is defined in TAFTA Article 50 1(e) as "a significant overall impairment in the 
position of a domestic industry".  WT/REG185/3 
 Page 15 
 
 
Table II.4 – TAFTA:  Special safeguards for certain agricultural products 
Timeframe for elimination of SSG Party HS 
Chapter Number of 
lines 2008 2015 2020 
16 1 1 0 0 Australia 20 4 4 0 0 
2 23 0 0 23 
4 13 0 3 10 
5 1 0 0 1 
8 2 0 2 0 Thailand 
20 2 0 2 0 
 
43. The SSG regime will be reviewed within three year s of the entry into force of the Agreement.  
If either Party enters into an agreement with a third country which does not provide for special 
safeguard measures on a good specified in Annex 5, and where the non-party is a substantial supplier, 
the Parties will consult each other on whether it should be withdrawn from Annex 5 (Article 509.11). 
Table II.5 – Synopsis of TAFTA's Bilateral Safeguards and SSGs 
Requirements Bilateral safeguards SSGs 
Trigger Rise in imports In absolute terms or relative to 
domestic production Imports in excess of the 
specified volume trigger 
level for any given year 
Criteria  Serious damage or actual threat 
thereof 9   
Suspension of further duty 
reduction  9   Measures 
allowed 
(Art. 502) Increase in duty rate  To MFN rate or MFN rate 
preceding entry into force, 
whichever is lower To MFN rate or base rate, 
whichever is lower 
2 years initially (maximum 6 
years including extensions) Maximum duration  Maximum of 200 days 
(provisional measures) In accordance with Annex 5 
timeframes; limited to the 
relevant year 
Timing 
Safeguard measure vis-à-vis the 
transition period of the good 
concerned   To be terminated within 2 
years of the end of the good's 
transition period, and no more 
measures after that  
Information of the institution of 
a proceeding through written 
notice 9  9  
Consultations 9  9  
Prior investigation Except for provisional 
measures  
Re-imposition of safeguard 
measures on the same good  Only until a period of time 
equal to the duration of the 
previous measure has elapsed Possible at every  
calendar year  
Progressive liberalization For measures exceeding 1 year  
Compensation (Art. 507.1) For measures exceeding 3 
years  
Possibility of retaliation 9   Conditions 
or 
limitations  
Prohibition of multiple trade-
defence measures applied 
simultaneously  9  9  
 * The additional requirement of damage th at would be difficult  to repair applies in the case of provisional measures. 
 WT/REG185/3 
Page 16  
 
3. Anti-dumping and countervailing measures 
44. With respect to the application of anti-dum ping measures, the Parties reaffirm their 
commitment to the provisions of the WTO Agreem ent on Implementation of Article VI of GATT 
1994.  Article 206 sets out agreed practices, specif ically in relation to consideration of price 
undertakings and the timeframe to be used in  determining the volume of dumped imports in 
investigations or reviews. 
4. Subsidies and state aid 
45. The Parties confirm their rights and obligati ons under the WTO Agreement on Subsidies and 
Countervailing Measures. 
46. With respect to agricultural export subsidies, Article 208 commits the Parties to work towards 
an agreement in the WTO on the elimination of tho se subsidies.  Article 208 also provides that no 
export subsidy will be introduced or maintained on ag ricultural goods traded be tween the Parties, and 
establishes bilateral cooperation on policies which may affect trade in food and agricultural products. 
5. Other regulations 
(a) Customs-related procedures
 
47. Chapter 3 and Articles 407-415 aim at simplifying and harmonizing customs procedures, and 
ensuring their proper application in rela tion to the trade between the Parties. 
48. The Parties determine the customs value of goods in accordance with the provisions of  
Article VII of GATT 1994 and the WTO Customs Va luation Agreement (Ar ticle 303).  Customs 
procedures and practices are to be transparent and in  conformity with international standards to the 
extent possible; they will be periodically reviewed (Article 304).  Customs user charges are allowed, 
if their amount is limited to the approximate cost of services rendered and if they do not represent an 
indirect protection to domestic goods nor a ta xation for fiscal purposes (Article 205).    
49. Articles 305-311 provide for, inter alia , a best-endeavour clause on early notice of significant 
changes to customs laws; mutual assistance to pr event breaches of customs legislation; review and 
appeal of decisions; adoption or maintenance of pre-classification procedures; facilitation of the 
importation of goods for which a certificate of orig in has been issued; consultations between the 
Parties in origin-related disputes; an endorsement of paperless trading initiatives; facilitation of 
clearance for low-risk goods; and the establishment of contact points in both Parties to address 
customs-related enquiries. 
50. Articles 407-415 (Chapter 4) deal specifically w ith customs procedures related to rules of 
origin (e.g., exporters' registration; delivery of certif icates of origin; sanctions to exporters; handling 
of claims for preferential treatment; origin veri fication, suspension and denial of preferential 
treatment; review and appeal).  A Committee on Rules of Origin is established. 
51. Certificates of origin are issued by authorized bodies of the exporting Party;24 self-
certification by registered exporters is not allowe d. Registered exporters are required to make an 
"Exporter Declaration" on the Certificate of Origin and must notify "as expeditiously as possible" any 
significant change in the basis for the registration of  their goods and their certification will then be re-
examined.  Authorized bodies may conduct examinati ons of the relevant documentation and facilities.  
Exporters that falsify a certificate of origin, provide false documentation or do not notify significant 
                                                      
24 The authorized bodies, as well as the requirements that  a certification of origin must meet to be valid, 
are specified in Annex 4.2 of the Agreement.  WT/REG185/3 
 Page 17 
 
 
changes will receive sanctions, including de-registrati on and refusal to consider further registration.  
Claims for preferential treatment can be made within  twelve months from the date of payment of the 
duties if accompanied by a valid certificate of origin (Article 410.3). 
52. Article 412.2 specifies the ways in which either Party may verify the eligibility of goods for 
preferential treatment (through measures to establish the validity of the certificate of origin; by issuing 
written questionnaires to be completed by the re levant producers, exporte rs or importers; by 
requesting the supply of records related to the prod uction, manufacture or export; or by visiting the 
factory or premises of the producer, exporter or impor ter or any other concerned party).  To the extent 
allowed by its laws, regulations and policies, th e exporting Party shall "fully cooperate" regarding 
origin verification; the importing Party must grant the right of review and appeal to the concerned 
parties (Article 414).  During that process, the application of preferential treatment may be 
temporarily suspended; origin verification may resu lt in the denial of preferential treatment or the 
payment of uncharged duties (Article 413.1-2).25 
(b) Electronic commerce  
53. Chapter 11 is designed to encourage co-opera tion and to develop and promote electronic 
commerce (e-commerce) between the Parties.  The Pa rties will maintain their current practice of not 
imposing customs duties on electronic transmissi ons between them and their current domestic 
legislation for electronic authentication; they al so commit themselves to wo rk towards the mutual 
recognition of digital certificates based on interna tionally accepted standards.  The Parties agree to 
ensure that their regulatory fra meworks minimize the burden on e-commerce and support its industry-
led development, while, to the extent possible, providing protection for consumers using e-commerce 
(in particular, with respect to personal data) that is at least equivalent to that provided to other 
consumers. 
 (c) Competition policy  
54. Chapter 12 aims at the promotion of fair competition and the curtailment of anti-competitive 
practices (Article 1201) between the Parties.  The Parties undertake to ensure that all businesses are 
subject to generic or relevant sectoral competition laws in force in their r espective territories, while 
allowing that specific measures or sectors be exempt ed from the provisions of this Chapter, provided 
the exemptions are transparent and undertaken on  grounds of public interest.  The Parties are 
committed to a transparent, comprehensive and non- discriminatory administration and enforcement of 
competition laws:  they agree to cooperate on is sues of competition law enforcement, including 
through consultations, with a view to eliminating anti-competitive practices that may be affecting 
bilateral trade and investment; and to make publicly  available their laws promoting fair competition 
and those addressing anti-competitive practices.  A revi ew of the scope and operation of this Chapter 
will take place within three years of entry into force of the Agreement.  The dispute settlement 
provisions of Chapter 18 do not apply to the provisions of this Chapter. 
 (d) Intellectual property  
55. Chapter 13 aims at increasing the benefits fro m trade and investment through the protection 
and enforcement of intellectual property rights (Ar ticle 1301).  The Parties reaffirm that they shall 
fully respect the provisions of the WTO Agreement on Trade-Related Aspects of Intellectual Property 
Rights and other multilateral agreements relating to  intellectual property to which both are parties 
(Article 1302).  In addition, the Pa rties shall take measures to prevent the export of goods that infringe 
copyright or trade marks (Article 1303).  Parties also  agree to cooperate with a view to eliminating 
trade in goods which infringes intellectual property rights through the exchange of information, policy 
                                                      
25 Article 308.5 stipulates that the importing Party must consult with the exporting Party before taking 
any action to recover unpaid duties.  WT/REG185/3 
Page 18  
 
dialogue, notification of contact points and any other measure they may deem appropriate         
(Article 1304), and to increase awareness of intell ectual property rights and the commercialization of 
intellectual property (Article 1305). 
 (e) Government procurement
 
56. Under Chapter 15, the Parties recognize the im portance of government procurement to their 
economies and state their intention of bringing it under the scope of the Agreement at the earliest 
opportunity (Article 1501).  A working group of government officials will report to the Joint 
Commission within twelve months of the entry into force of the Agreement on the scope for 
commencing bilateral negotiations to bring governme nt procurement under the Agreement        
(Article 1502).26  
57. In preparation for the outcome of these negotia tions, Article 1503 sets out the principles to be 
applied in the Parties' procurement procedures (t ransparency, value for m oney, open and effective 
competition, fair dealing, accountability and due process, and non-discrimination).  Article 1504 provides for the exchange of information in re spect of government procurement policies and 
practices.
27 
D. SECTOR -SPECIFIC PROVISIONS OF THE AGREEMENT  
58. There is no specific provision in the Agreement regarding trade in goods of any particular 
sector, other than the provisions for agricultural export subsidies provided fo r in Article 208 (see 
paragraph 46 above) and the emergency clause for ag ricultural goods provided for in Article 509 (see 
paragraph 42 above). 
E. GENERAL PROVISIONS OF THE AGREEMENT  
1. Exceptions and reservations 
59. General exceptions and reservations are laid down  in Chapter 16 of the Agreement.  Articles 
1601 and 1602 stipulate that the general and security  exception rules in, respectively, Articles XX and 
XXI of the GATT 1994 are incorporated into and ma de part of the TAFTA.  Article 1604 stipulates 
that balance-of-payments exceptions must be in accordance with the GATT 1994 and the 
Understanding on Balance-of-Payments Provisions of the GATT 1994.  Other exceptions and 
reservations include measures concerning Disclosur e of Information (Article 1603) and Taxation 
(Article 1607). 
2. Accession 
60. The Agreement is open to accession or association, on terms to be agreed between the Parties, 
by any WTO Member or by any other State or  separate customs territory (Article 1905). 
3. Institutional framework 
61. Chapter 14 of the Agreement addresses the transparent administration of laws and regulations. 
Provisions under this Chapter include the publicatio n of laws, regulations, and administrative rulings 
                                                      
26 According to the Parties, a Working Group establis hed pursuant to TAFTA Article 1502 met on       
8 August 2005 in Bangkok and agreed to recommend to the TAFTA Joint Commission that the Parties 
commence Government Procurement negotiations.  On 1 December 2005, the TAFTA Joint Commission 
endorsed this recommendation from the Working Group, noting that the Parties agreed to commence TAFTA 
Government Procurement negotiations in early 2006. 
27 The dispute settlement provisions of Chapter 18 do not apply to this Chapter unless specifically 
authorized by the further negotiations mandated by Article 1502 (Article 1505).  WT/REG185/3 
 Page 19 
 
 
relating to matters covered by th e Agreement (Article 1402); the designation of contact points    
(Article 1403); and administrativ e proceedings (Article 1404).  
62. Chapter 17 establishes a Joint Commission and stipulates its mandate (Article 1702), which 
includes, among others, the review of the general f unctioning of the Agreement; the consideration of 
proposals to amend it; and the role of permanent and ad hoc  subsidiary bodies.  Article 1703 provides 
for the timing and location of the meetings of th e Joint Commission.  Article 1704 provides that a 
general review at ministerial level shall take place  within five years of the operation of the TAFTA 
and at least every five years thereafter. 
4. Dispute settlement 
63. Chapter 18 sets out the institutional arrangements that apply to the avoidance and settlement 
of disputes between the Parties regarding questions of  interpretation, implementation or application of 
the Agreement.28  Article 1801.2 and 3 provide that the complaining Party can choose the forum 
where the dispute is to be settled (forum el ection clause); however, once dispute settlement 
procedures have been initiated under one forum, that forum shall continue to be  used (exclusive forum 
clause), except when disputes relate to substantia lly separate and distinct rights/obligations under 
different international agreements, or upon both Parties' express agreement (Article 1801.4).   
64. The TAFTA provides for detailed steps in the pr ocess for dispute resolution, the most salient 
of which are synoptically described below.  The Pa rties may resort to good offices, conciliation or 
mediation at any time, and these may continue while an arbitral tribunal is in place (Article 1803).  
Also, they may terminate or suspend (for a maximu m of twelve months) the work of the arbitral 
tribunal (Article 1808).  As a general rule, an arbitral  tribunal should issue its final award within     
120 days from its establishment. 
 
                                                      
28 Chapter 18 does not apply to matters arising under Chapter 6 (SPS) and other chapters whose 
provisions confer no specific rights, namely Chapters 12 (Competition Policy), 15 (Government Procurement), 
and 11 (Electronic Commerce), with the ex ception of Article 1102 (Customs Duties). WT/REG185/3 
Page 20  
 
Chart II.4 – Synopsis of TAFTA's Dispute Settlement Provisions 
 
5. Relationship with other agreements concluded by the Parties 
65. Article 1906 states that in case of inconsis tency between the Agreement and any other 
agreement to which both Parties are parties, the Par ties will consult each other with a view to finding 
a mutually satisfactory solution. 
66. The Agreement does not commit either Party to  extend to the other Party any benefit it 
confers to a third country under an existing or  future preferential agreement (Article 1907).
29 
67. Article 1908 provides that the Trade Agreement Between the Government of Australia and the 
Government of the Kingdom of Thailand  of 5 October 1979 will be terminated on entry into force of 
the Agreement. 
                                                      
29 Exceptions to this rule is Article 908.2 (Promo tion and Protection of Investments);  Article 917.3 
(Settlement of Disputes between a Party and an Investor of the other Party);  and Article 1605 (Restrictions to 
Safeguard the Balance of Payments). 
Consultations  (Art. 1802)  
Written request for establishing  
an arbitral tribunal  (Art. 1804)  
Composition  (Art. 1805)  
Functions  (Art. 1806)  
Rules of procedure  (Art. 1807)  
Max. 97 days for composition  60 days  
Arbitral tribunal examination  
(Art. 1807)  
Two substantive meetings  
Arbitral tribunal draft award  
to be sent to Parties (Art. 1809.2)
14 days for Parties’ comments  
Arbitral tribunal final award  
Binding, no appeal possible  
(Art. 1809.3)  
Award becomes public  
(Art. 1809.4)  10 days from Parties’ release  30 days from receipt of final award  
Implementation  
Notification by losing Party of proposed  
implementation action  
(Art. 1810)  
In cases of non -implementation  
Consultations on a mutually  
acceptable solution   (Art. 1810.3)  
30 days from  
commencement of consultations  
Retaliation  
If no notice of implementation or no  
satisfactory solution (Art. 1811)  
60 days from receipt  of retaliation notice  
Arbitral tribunal reconvened  
upon request from losing Party  
(Art. 1811.3)  
90 days from tribunal reconvention  
Arbitral tribunal determination  
Binding, no appeal possible  
(Art. 1811.3  - 4) Dispute Settlement Provisions
Consultations  (Art. 1802)  
Written request for establishing  
an arbitral tribunal  (Art. 1804)  
Composition  (Art. 1805)  
Functions  (Art. 1806)  
Rules of procedure  (Art. 1807)  
Max. 97 days for composition  60 days  
Arbitral tribunal examination  
(Art. 1807)  
Two substantive meetings  
Arbitral tribunal draft award  
to be sent to Parties (Art. 1809.2)  
14 days for Parties’ comments  
Arbitral tribunal final award  
Binding, no appeal possible  
(Art. 1809.3)  
Award becomes public  
(Art. 1809.4)  10 days from Parties’ release  30 days from receipt of final award  
Implementation  
Notification by losing Party of proposed  
implementation action  
(Art. 1810)  
In cases of non -implementation  
Consultations on a mutually  
acceptable solution   (Art. 1810.3)  
30 days from  
commencement of consultations  
Retaliation  
If no notice of implementation or no  
satisfactory solution (Art. 1811)  
60 days from receipt of retaliation notice  
Arbitral tribunal reconvened  
upon request from losing Party  
(Art. 1811.3)  
90 days from tribunal reconvention  
Arbitral tribunal determination  
Binding, no appeal possible  
(Art. 1811.3-4)     WT/REG185/3 
 Page 21 
 
 
68. Table II.6 below lists the RTAs to which Austra lia and/or Thailand are parties to, and which 
have been notified to the GATT/WTO and are in force. 
Table II.6 – Australia and Thailand:  Partic ipation in RTAs (notified and in force) 
 
GATT/WTO Notification Partner/Agreement Date of entry 
into force Type of 
agreement Year Provision(s) 
AUSTRALIA  
United States 1-Jan-05 Goods & services 2004 GATT Art. XXIV & GATS Art. V 
Singapore 28-Jul-03 Goods & services 2003 GATT Art. XXIV & GATS Art. V 
New Zealand (CER) 1-Jan-83 Goods 1983 GATT Art. XXIV 
New Zealand (CER) 1-Jan-89 Services 1995 GATS Art. V 
SPARTECA30 1-Jan-81 Goods 1981 Enabling Clause 
Papua New Guinea 
(PATCRA) 11-Feb-77 Goods 1976 GATT Art. XXIV 
THAILAND  
New Zealand 1-Jul-05 Goods & services 2005 GATT Art. XXIV & GATS Art. V 
AFTA31 28-Jan-92 Goods 1992 Enabling Clause 
Laos 20-Jun-91 Goods 1991 Enabling Clause 
GSTP 19-Apr-89 Goods 1989 Enabling Clause 
 
   
                                                     
 
30 South Pacific Regional Trade and Economic Cooperation Agreement: New Zealand, Cook Islands, 
Fiji, Kiribati, Marshall Islands, Micronesia, Nauru, Niue, Papua New Guinea, Solomon Islands, Tonga, Tuvalu, Vanuatu, Western Samoa. 
31 ASEAN Free Trade Area: Brunei, Darussalam, Ca mbodia, Indonesia, Laos, Malaysia, Myanmar, 
Philippines, Singapore, Vietnam. WT/REG185/3 
Page 22  
 
ANNEX 
Indicators of trade liberalization under the TAFTA
 
 
1. A comparison between the scheduled elimination of tariffs applied to the Parties' mutual 
imports and the duty rates applied by Australia a nd Thailand to MFN imports is shown in Tables A.1 
(Australia) and A.2 (Thailand) below, broken into ag ricultural, industrial and total products.  Applied 
MFN duty rates in 2005 serve as a basis to the comparison.32 
2. Australia  has a variable MFN tariff structure.  It s (unweighted) average MFN rate (2005) is 
3.9 per cent on all goods, with a lower average tariff applied to agricultural goods than to industrial 
products.  Over 50 per cent of Australia's tariff lines are duty-free at an MFN level.  On entry into 
force, Thai exporters enjoyed a relative margin of  preference of 69.7 per cent on industrial products 
vis-à-vis the prevailing average MFN tariff in 2005, and a relative margin of preference of 100 per 
cent in agricultural goods.   
Table A.1– Australia:  Indicators of tariff rates applied to MFN and Thai imports 
ALL PRODUCTS Agricultural products Industrial products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff Origin 
of 
goods Year 
Overall 
(%) On 
dutiablea 
(%) Share of 
duty-free 
tariff 
lines 
(%) Overall
(%) On 
dutiablea
(%) Share of 
duty-free 
tariff lines
(%) Overall 
(%) On 
dutiablea 
(%) Share of 
duty-free 
tariff lines
(%) 
MFNb 2005 3.9 7.9 50.6 0.9 4.4 78.1 4.3 8.1 46.4 
2005 1.1 6.6 83.2 0 2. 5 99.9 1.3 6.6 80.7 
2008 0.9 7.5 87.4 0 0 100 1.1 7.5 85.5 
2010 0.2 5.0 96.1 0 0 100 0.2 5.0 95.5 Thailand 
2015 0 0 100 0 0 100 0 0 100 
a   "On dutiable" excludes  duty-free tariff lines.  
b     Specific duties applied by Australia on 17 tariff lines are excluded from the calculation of applicable MFN rates. 
Source : Data furnished by Australia (M FN-2005 and preferential rates). 
 
3. Thailand  has a variable MFN tariff structure with an (unweighted) average MFN rate of 14.7 
per cent on all goods in 2005.  The average applied tariff on industrial products of 12.9 per cent is 
roughly half that applied to agricultural goods.  Duty-free tariff lines account for 6.2 per cent of all 
tariff lines.  On entry into force, Australian expor ters into Thailand enjoyed a relative margin of 
preference of 48.1 per cent in industrial goods vis-à- vis the average MFN applied tariff in 2005, and a 
relative margin of preference of 40.2 per cent in agricultural goods. 
Table A.2– Thailand:  Indicators of tariff ra tes applied to MFN and Australian imports 
ALL PRODUCTS Agricultural products Industrial products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff Origin 
of 
goods Year 
Overall 
(%) On 
dutiablea 
(%) Share of 
duty-free 
tariff 
lines 
(%) Overall
(%) On 
dutiablea
(%) Share of 
duty-free 
tariff lines
(%) Overall 
(%) On 
dutiablea 
(%) Share of 
duty-free 
tariff lines
(%) 
MFN 2005 14.7 15.5 6.2 24.9 26.0 4.0 12.9 13.8 6.5 
2005 7.8 15.4 49.1 14.9 23. 1 35.6 6.7 13.7 51.3 
2007 4.6 10.2 54.4 10.6 16. 5 35.6 3.7 8.6 57.4 
2008 3.4 7.6 54.9 7.8 12. 0 35.6 2.7 6.6 58.0 
2009 2.4 6.7 64.4 4.6 8. 9 49.0 2.0 6.2 66.9 
2010 0.5 8.4 93.8 1.9 19. 7 90.6 0.3 5.3 94.4 
2015 0.3 11.0 99.1 0.7 11. 1 93.4 0.0 5.0 100.0 Australia 
2020 0.1 5.0 99.9 0.0 5. 0 99.4 0.0 0.0 100.0 
a   "On dutiable" excludes  duty-free tariff lines.  
Source : Data furnished by Thailand (M FN-2005 and preferential rates). 
                                                      
32 MFN rates were taken from the respective schedul es of Australia and Thailand provided by the 
parties.  WT/REG185/3 
 Page 23 
 
 
4. Table A.3 shows the market access opportunities in Thailand for Australia's top 25 exports, 
which in 2002-2004 accounted on average for 63.8 pe r cent of Australia's global exports.  The table 
shows at which year all HS 6-digit tariff lines corre sponding to the product definition (i.e. applying to 
the 6-digit HS code used to capture the volume of  trade) will become duty-free in Thailand, and the 
applicable rules of origin. 
5. Australia's top 25 exports cover a total of 39 HS  6-digit tariff lines.  Seven of Australia's top 
25 exports (which account for 8 HS-6 digit lines and 16.2 per cent of Australia's average global 
exports in 2002-2004) already benefit from zero MF N duties in the Thai market, a further 11 products 
(accounting for 16 tariff lines and a further 27.8 per cent of Australia's average global exports) gain 
immediate duty-free access, one product is gran ted duty-free access in 2009 and the remaining 5 
products gain duty-free access between 2010 and 2020.  With the exception of product 870324, 
vehicles, which gains immediate duty-free access from a base rate of 56.7%, other products subject to 
MFN rates of more than 50 per cent are subject to longer transition periods.  The margin of preference granted by Thailand to Australia under the TA FTA varies from 0 to 57.3 percentage points. 
Table A.3 – Thailand:  Market access opportuniti es under TAFTA, for Aust ralia's top 25 exports 
 
Australia's top 25 export products in 2002-2004 Access Conditions to Thailand's import market 
Under the TAFTA 
Duty-free in: Share in 
global 
exports 
Avge MFN 
applied tariff 
2005 
2009 
2010 
2015 
2020 
(%) HS number & 
description of the product 
(%) No. of HS 6-digit 
lines Origin rules 
11.23 9999AA Commodities not specified according to 
kind        
10.25 270112 Bituminous coal, whether or not pulverised  1% 1     CTH 
4.64 710813 Gold (incl. gold plated  with platinum), non-
monetary 0% 1     CTChapter 
4.52 260111 Iron ores & concs. (excl. roasted iron pyrites) 1% 1     CTH 
4.44 270900 Petroleum oils & oils obtained from 
bituminous minerals, crude 0% 1     CTH 
3.13 281820 Aluminium oxide (excl. art. corundum) 1% 1     CTS except from 2606 or  
262040 
2.89 100190 Wheat other than durum wheat; meslin 0% 2     CTChapter 
2.15 760110 Aluminium, not alloyed, unwrought 1% 1     CTH 
2.07 271111 Natural gas, liquefied 0%  1     CTS except from 271121. 
1.90 020230 Meat of bovine animals, fro zen, boneless 51%     1 CTChapter 
1.89 220421 Wine other than sparkling wine of fresh 
grapes, incl. fortified; grape must 57.3%    2  CTH 
1.79 271011 Light petroleum oils & preps. 5.5% 4     CTH; or change from  2710, 
provided that the good is the 
product of a chemical 
reaction. 
1.70 510111 Wool, not carded/combed, greasy, incl. 
fleece-washed wool, shorn 1% 1     CTChapter, provided RVC 
of not less than 55%. 
1.48 300490 Medicaments (excl. of 30.02/30.05/30.06) 
consisting of mixed/unmixed products 7.1% 3 4    CTS, except from 300390. 
1.43 020130 Meat of bovine animals, fresh/chilled, 
boneless 51%     1 CTChapter 
1.28 870324 Vehicles (excl. of 87.02 & 8703.10) 
principally designed for the transport of persons 56.7% 3     CTH provided RVC of not 
less than 40%. 
1.03 870323 Vehicles (excl. of 87.02 & 8703.10) 
principally designed for the transport of persons  56.7% 1  2   CTH provided RVC of not 
less than 40%. 
0.99 260300 Copper ores & concs. 1% 1     CTH WT/REG185/3 
Page 24  
 
Australia's top 25 export products in 2002-2004 Access Conditions to Thailand's import market 
Under the TAFTA 
Duty-free in: Share in 
global 
exports 
Avge MFN 
applied tariff 
2005 
2009 
2010 
2015 
2020 
(%) HS number & 
description of the product 
(%) No. of HS 6-digit 
lines Origin rules 
0.86 740311 Cathodes & sections of cathodes, of ref. 
copper, unwrought33 1%   1   CTH 
0.86 520100 Cotton, not carded/combed 0% 1     CTChapter, provided RVC 
of not less than 55%. 
0.85 760120 Aluminium alloys, unwrought 1% 1     CTH 
0.80 100300 Barley 0% 1     CTChapter 
0.59 260800 Zinc ores & concs. 1% 1     CTH 
0.55 440122 Wood, in chips/particles, non-coniferous 1% 1     CTH 
0.54 847330 Parts & accessories (excl. covers, carrying 
cases and the like)  0% 1     CTH; or RVC of not less 
than 45%, whether or not 
there is a change in tariff 
classification. 
   63.84 TOTAL OF ABOVE                                28     4      3     2      2  
Source :  Trade data  2002-2004 (Comtrade), MFN rates and liberal ization schedule taken from da ta provided by Thailand. 
 
6. Table A.4, built up on a similar basis as Tabl e A.3 shows the market access opportunities in 
Australia for Thailand's top 25 exports (at the HS 6-digit level), which accounted for 37.8 per cent of 
Thailand's exports to the world in 2003.34  The table shows at which year all HS 8-digit tariff lines 
corresponding to the product definition (i.e. applyi ng to the 6-digit HS code used to capture the 
volume of trade) will become duty-free in Austra lia, and the applicable rules of origin.   
7. Thailand's top 25 exports cover a total of 58 HS 8-digit tariff lines.  Seventeen of Thailand's 
top 25 exports (which account for 48 HS 8-digit lines and 27.7 per cent of Thailand's average global 
exports in 2003) already benefit from zero MFN duti es in the Australian market, a further six products 
(accounting for 9 tariff lines and a further 6.85 per cent of Thailand's average global exports) gain 
immediate duty-free access and one product is granted duty-free access in 2007.  The margin of preference granted to Thailand by Australia under th e TAFTA varies from 0 to ten percentage points. 
                                                     
 
33 The actual tariff rate applied by Thailand at anytime under the TAFTA to imports of goods under 
Subheading 7403.11 shall be no higher than the rate applied at that time by Thailand to imports under the 
ASEAN FTA. 
34 Exports for 2002 and 2004 were not available from COMTRADE for Thailand.  WT/REG185/3 
 Page 25 
 
 
Table A.4 – Australia:  Market access opportuni ties under TAFTA, for Th ailand's top 25 exports 
Thailand's top 25 export products in 2003 Access Conditions to Australia's import market 
Under the TAFTA 
Duty-free 
in: Share in global 
exports 
Avge MFN  
tariff 
2005 
2007 
(%) HS number & 
description of the product 
(%) No. of HS 
8-digit linesOrigin rules 
4.41 847330 Parts & accessories (excl. covers, carrying cases 
and the like)  0% 1  CTH; or RVC of not less than 45%, 
whether or not there is a CTC 
3.18 847170 Storage units (of auto. data processing 
machines) 0% 1  CTS  
3.12 854229 Monolithic integrated circuits , other than digital 0% 1  CTS  
2.24 Commodities not specified according to kind     
2.22 847160 Input/output units (of auto. data processing 
machines) 0% 1  CTS  
1.99 854221 Monolithic integrated ci rcuits, digital 0% 1  CTS  
1.96 100630 Semi-milled/wholly milled rice, whether or not 
polished/glazed 0% 1  CTChapter 
1.83 870421 Motor vehicles for the transport. of goods (excl. 
of 8704.10) 4.5% 2  CTH provided RVC of not less than 
40%. 
1.48 400121 Natural rubber (excl. la tex), in smoked sheets 0% 1  must be product of natural plants grown 
within territory of a Party. 
1.40 852812 Reception apparatus for television, whether or 
not incorporating radio-broadcast receiver 5% 1  CTS, except from 701120, 854011 or 
854091. 
1.30 400129 Natural rubber other than latex/smoked sheets 0% 1  must be product of natural plants grown 
within territory of a Party 
1.08 160520 Shrimps & prawns, prepared./preserved 0% 1  CTChapter 
1.05 841510 Window/wall type air-conditioning machines, 
self-contained/split-system 5% 1  CTS  
1.05 030613 Shrimps & prawns, whether or not in shell, 
frozen 0% 1  CTChapter 
1.03 160414 Tunas, skipjack & bonito (Sarda spp.), 
prepared./preserved 5%  1 CTChapter 
1.03 880390 Parts of goods of 88.01/88.02,  n.e.s. in 88.03 0% 1  CTS  
0.97 852990 Parts suit. for use solely with the app. of 85.25-
85.28 3.3% 3  CTH; or RVC of not less than 40%, 
whether or not there is a CTC 
0.92 853400 Printed circuits 0% 1  CTH 
0.89 711319 Articles of jewellery & parts thereof , of other 
precious metal  5% 1  CTS  
0.84 271019 Petroleum oils & oils obtained from bituminous 
minerals. (excl. crude)  0% 28  CTH; or from any other good of  2710, 
provided that the good is the product of 
a chemical reaction. 
0.83 854129 Transistors (excl. photosens itive transistors) 0% 1  CTS  
0.81 270900 Petroleum oils & oils obtained from bituminous 
minerals 0% 5  CTH 
0.74 020714 Cuts & edible offal of species Gallus 
domesticus, frozen 0% 1  CTChapter except chapter 01. 
0.71 852290 Parts (excl. pick-up cartridges) & accessories  0% 1  CTH; or RVC of not less than 45%, 
whether or not there is a change in 
tariff classification 
0.71 850110 Electric motors of an  output not >37.5W 10% 1  CTH, except from stators and rotors for 
goods of 8501 or  850300; or change to 
850110 from stators and rotors for 
goods of 8501 or 850300, whether or 
not there is also a change from any 
other heading, provided  RVC of not 
less than 40%. 
   37.8 TOTAL OF ABOVE                                     57     1 
Source :  Trade data for 2003 (Comtrade), MFN rates and liberali zation schedule taken from data  provided by Australia. 
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