WT/TPR/S/244 Trade Policy Review 
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II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
(1) OVERVIEW  
1. During the period under review (2007-11), no major changes have been made to Australia's 
highly transparent trade and investment regime.  Regu latory reform has been pursued with a view to 
removing barriers to improved productivity.  Policy makers continue to be nefit from abundant high 
quality economic analysis by government instituti ons (e.g. the Treasury) and independent advisory 
bodies (e.g. Productivity Commission). 
2. While remaining committed to multilateralism, more emphasis has been placed on exploring 
prospects for broadening preferential trade rela tions through the conclusion of comprehensive 
agreements with trading partners (e.g. Chile) and major regional groups (e.g. the Association of South 
East Asian Nations (ASEAN), Trans-Pacific Part nership Agreement negotiations) despite their 
negotiating and administrative costs, and uncertain benefits as found from some submissions to an 
independent 2010 study by the Productivity Commi ssion.  Commitments under these agreements go 
beyond those under WTO Agreements in a number of areas, including services and investment, and in certain cases appear to be applied to all tradi ng partners (e.g. intellect ual property rights).   
3. Australia has continued to provide duty-free treatment for imports from least developed 
countries (LDCs) while preferences to other developing countries are being eroded by MFN and other preferential tariff cuts.  It has been an active pr ovider of aid for trade at multilateral, regional and 
bilateral levels.  Australia has been involved as a respondent in one WTO dispute settlement case and 
participated in several others as a third party.   
4. Australia has maintained its open stance toward s foreign investment.  The foreign investment 
legislation, which was changed slightly to reduce notification-related compliance costs, continues to 
screen large investment projects on the basis of va guely defined but not prescriptive national interest 
criteria, and restricts foreign ownership in a fe w sensitive areas, e.g. international aviation and 
shipping (and perhaps, more recently, natural resour ces).  Screening does not appear to have been a 
barrier to inward FDI as only 0.1% of applications (real estate only) were rejected in 2008/09.  
(2) G
ENERAL CONSTITUTIONAL AND INSTITUTIONAL FRAMEWORK1 
5. Australia's constitutional and institutional fra mework remains unchanged since its previous 
Review. 
6. Executive power is vested in the Head of Stat e, represented by the Governor-General, who is 
appointed by the British monarch.  The Governor -General appoints the Prime Minister, who by 
convention is the leader of the party or coalition of parties that has the majority of seats in the House 
of Representatives.  On the advice of the Prime Mi nister, the Governor-General appoints Ministers of 
State.  The Prime Minister and Ministers are accountable to Parliament.   
7. Legislative power is vested in Parliame nt, which comprises a 150-member House of 
Representatives (lower house) and the 76-member Senate  (upper house).  The latest elections for the 
House of Representatives and half of the Senate (40 seats) were held on 21 August 2010;  the next 
House of Representatives elections mu st be held before 21 August 2013 .  Parliament, inter alia , has 
exclusive power to impose and alter customs duties.  The houses of Parliament have equal power to 
introduce and amend bills except for "money" and taxa tion bills, which may only be introduced in the 
                                                      
1 For further information on Australia's constitutional and institutional framework see WTO documents 
WT/TPR/S/104, 26 August 2002 and WT/TPR/S/178/Rev.1, 1 May 2007. Australia WT/TPR/S/244 
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House of Representatives.  Bills that have been passed by both Houses and received assent from the 
Governor-General become law.   
8. Judicial power is vested in the High Court of Australia, the final court of appeal, and in the 
Federal Court, the Family Court, the Federal Magist rates' Court of Australia and other courts.  Each 
state and territory has a court hierarchy of its own,  with the jurisdictions of each court varying from 
state to state and territory to territory.  All states and territories have a Supreme Court;  decisions of the Federal High Court are binding on all Australian courts.  
9. Under Australia's federal system, powers are distributed between the Commonwealth and 
six states;  in addition to the states, there are se veral territories, two of which are self-governing, but 
over which the Commonwealth retains ultimate power.
2  Each state has its own constitution and 
government.  The states and territories remain responsib le for a number of trade-related policies, such 
as standardization, government procurement, and state-trading.  Legislative state powers include 
agriculture, education, health, law enforcement, and services.  States may also provide bounties 
(subsidies) or impose taxes on mining activities.  The Commonwealth has exclusive power concerning all other bounties or support measures.  In the case of any in consistencies between 
Commonwealth and state legislation, the former prevails to ensure uniformity throughout the 
Commonwealth.  Since 1992, the Council of Au stralian Governments (COAG) has facilitated 
consultation, cooperation, and po licy coordination between the Commonwealth, states, and territories 
with a view to avoiding potential inconsistencies in  several policy areas (Chapters III and IV);  during 
the review period, it initiated, developed, and m onitored the implementation of policy reforms of 
national significance that require cooperative acti on by Australian governments.  Since March 1993, 
under the Australian Mutual Recognition Agre ement between the Commonwealth, States and 
Territories goods that are legally saleable in one jurisdiction are satisfactory for sale throughout the 
country, and people who work in a registered oc cupation in one jurisdiction may freely enter an 
equivalent occupation in  other jurisdictions.  
(3) S
TRUCTURE OF TRADE POLICY FORMULATION  
(i) Executive branches of government 
10. The Minister for Trade and the Department of  Foreign Affairs and Trade (DFAT) maintain 
prime responsibility for bilateral, regional, and multilateral trade policy as well as administrative 
responsibility for all treaties.  Other agencies that have an influence on international trade policy and 
trade relations include the Department of Agricult ure, Fisheries and Forestry, the Department of 
Broadband, Communications and the Digital Economy, the Department of Finance and Deregulation, 
the Department of Health and Ageing, the Depa rtment of Infrastructure and Transport, the 
Department of Innovation, Industr y, Science and Research, the Department of Resources, Energy and 
Tourism, and the Treasury.  
(ii) Advisory bodies 
11. Australia's highly transparent trade policy form ulation and evaluation structure continues to 
involve interactions between the executive br anches of government, advisory bodies, businesses, 
non-governmental organizations ( NGOs), and other stakeholders.  The Productivity Commission (PC) 
remains the Government's principal evaluation and advisory body on microeconomic policy and 
regulation through government-commissioned project s/public inquiries, performance reporting, and 
other services to government bodies.  In addition to evaluations, the PC's annual Trade and Assistance 
Review provides quantitative estimates of the assistan ce granted to industry, an important input into 
                                                      
2 The six states are New South Wales, Queensland, Victoria, South Australia, Western Australia, and 
Tasmania.  The two territories are the Northern  Territory and the Australian Capital Territory. WT/TPR/S/244 Trade Policy Review 
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the TPR exercise.3  Several other independent institutes (e.g. Bureau of Transport and 
Communications Economics) continue to evaluate th e impact and effectiveness of government policy 
and provide advice.  The Government also establis hes taskforces to carry out inquiries from time to 
time.  The authorities are increasingly using the intern et to provide a channel for public consultations 
on specific topics.  The role of transparency, especia lly the use of independent institutions, such as the 
PC to evaluate government policy, has greatly facilitated the economic reforms and ensured their 
continuation.  However, high quality transparency and policy appraisal is costly;  for example, in 
2008/09 the PC's budget was $A 31.8 million.4 
(4) TRADE LAWS AND REGULATIONS  
12. Australian trade laws mainly take the form of statutes and implementing regulations.  Statutes 
are printed separately while regulations are pub lished in Commonwealth of Australia gazettes.5  
Ministries, departments, and other agencies issue media releases and other forms of public notice.  
Similar arrangements hold for state and territory governments.  While provisions of legislation 
implementing certain international treaties have been addressed by Australian courts, it is understood 
that, during the period under review, those relating to  the WTO Agreement have not been an issue in 
domestic court proceedings.  
13. Since its previous Review, Australia has continue d to review legislation in several trade and 
trade-related areas with a view to delivering pr oductivity gains and reduci ng compliance costs as well 
as removing inconsistent, duplicative, and co stly state and territory legislation.  On 
29 November 2008, COAG agreed to a National Partnership Agreement to Deliver a Seamless 
National Economy for improving Australia's productivity by reducing the cost of, and removing 
regulatory barriers to doing business across jurisdictional borders.6  The agreement commits the 
Commonwealth to provide the states and territories with up to $A 550 million over five years to 
facilitate and reward the delivery of 27 priority re forms.  There are also eight areas of competition 
reform with no reward payments attached7;  reward payments are con tingent upon meeting the key 
milestones set out in the agreement's implementati on plan.  By November 2010, around one third of 
the regulatory reforms were completed or nearing completion.  According to a 2010 study, the OECD 
principles of efficient regulation for a mark et-openness friendly regul atory environment are 
extensively reflected in the Australian regulatory framework8, but despite Australia's high ambition to 
achieve international best practice, further improvements remain both desirable and possible.9 
                                                      
3 During the period under revi ew, the PC also dealt with, inter alia,  Australia's urban water sector, 
education and training workforce, impacts and benefits of COAG reforms, rural research and development 
corporations, bilateral and regional trade agreements, annual review of regulatory burdens on business, 
performance benchmarking of Australian business regulation (planning, zoning and development assessments, occupational health and safety), wheat  export marketing arrangements, and market mechanisms for recovering 
water in the Murray-Darling Basin.  View ed at:  http://www.pc.gov.au/projects. 
4 Productivity Commission (2009). 
5 These gazettes are:  the Government Notices Gazette ;  the Australian Public Service Gazette ;  the 
Government Purchasing ;  the Business Gazette ;  the Australian Securities and Investments Commission Gazette ; 
the Tariff Concessions Gazette ;  the Chemical Gazette ;  the Australian Pesticides & Veterinary Medicines 
Authority Gazette ;  and the Food Standards Gazette .  Viewed at:  http://www.publications.gov.au/gazettes.html. 
6 Office of Best Practice Regulation (2009). 
7 Areas of reform covered by the agreement include :  uniform occupational health and safety laws;  
regulation of trustee companies;  regulation of consumer  credit;  personal property securities;  environmental 
assessment and approvals;  licensing of trades people;  product safety regulation;  health workforce;  and chemicals and plastics regulation (Offi ce of Best Practice Regulation, 2009). 
8 Australia ranks 3rd (4th in 2007/08) among 48 economies based on the 2009 Opacity Index , which 
measures the degree to which they lack clear, accurate, easily discerni ble, and widely accepted practices 
governing the relationships among governments, businesses, and investors.  The Opacity Index consists of Australia WT/TPR/S/244 
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14. In the period under review, Australia has made  numerous WTO notifications, including tariff 
and trade data submissions to the Integrated Database  (Table AII.1).  Furthermore, Australia's strong 
commitment to transparency continues to be refl ected in the presence of internet websites for most 
public sector entities, which greatly facilitated the preparation of this TPR. 
15. With a view to fighting corruption10, Australia is a signatory to the 1997 OECD Convention 
on Combating Bribery of Foreign Public Officials in International Busine ss Transactions, whose 
38 parties are required to make foreign bribery a cr ime.  Australian companies applying for EFIC's 
export credits (Chapter III) are required to make a no-bribery commitment that extends to conduct by 
an agent or business partner.  Th e financial penalties for foreign an d domestic bribery were increased 
significantly in February 2010 to dissuasive levels , up to a maximum $A 1.1 million for individuals 
and a maximum penalty for corporations of $A 11 million or three times the value of benefits 
obtained through bribery, whichever is greater.  If the value of benefits obtained through bribery 
cannot be ascertained, the maximum penalty is $A 11 million or 10% of the annual turnover of the 
company and related bodies corporate.  Neverthel ess, according to a Transparency International 
Report, in 2010 Australia was among the 27 countries with significant inadequacies in their legal framework for prohibiting foreign bribery;  Australia's  inadequacies related to its legal framework and 
enforcement system.
11  The authorities consider that issues relating to auditing standards and to 
whistleblowers may be inaccurate.  Several of  the alleged inadequacies appear to be 
misunderstandings of Australian law; in additi on, the OECD Working Group on Bribery does not 
consider Australia to have inadequacies in its  foreign bribery law.  Although no domestic bribery 
cases were reported, four foreign bribery cases involving Australian firms (e.g. wheat, banknote 
contracts, iron ore) had been under investigation by 2010.   
(5) TRADE POLICY OBJECTIVES  
16. Australia's trade policy remains based on the understanding that trade openness and economic 
growth/performance and living standards (employment,  welfare gains) are strongly linked;  emphasis 
has been put on improving international competitiv eness and market access overseas.  To reach these 
objectives, Australia pursues a combined multilateral, re gional, and bilateral approach to trade policy.  
Despite trade openness and certain policy developmen ts, trade and trade-related policy instruments 
continue to be used to support the same activities in different ways (e.g. automotive, textiles, clothing 
and footwear, key infrastructure services), thus distorting resource allocation in the economy (Chapter IV).  
                                                                                                                                                                    
 
five components that may be thought of as "negative social capital":  corruption, legal system inadequacies, 
economic enforcement policies, accoun ting standards and corporate governan ce, and regulation.  Australia's 
scores in accounting standards and co rporate governance, and regulation are disproportionately low compared 
with those obtained in other areas (Milken Institute, 2009). 
9 These improvements include ways to:  follow up application of the provisions for specific assessment 
of trade and investment impacts in the Regulatory Impact Assessment process;  pursue and expand efforts to 
harmonize FTAs signed by Australia;  continue reducing and rationalizing government assistance to industry 
and services;  continue and strengthen efforts to harm onize Australian standards with international standards; 
strengthen transparency in standard-setting;  introduce reforms to the quarantine inspection system;  and pursue 
an agenda towards harmonization of product safety standards (OECD, 2010d). 
10 According to the 2009 Corruption Perceptions Index , which measures the perceived level of 
public-sector corruption in 180 countries and territories around the world, Australia ranked 8th with a score of 
8.7 out of 10 (Transparency International online info rmation.  Viewed at:  http://www.transparency.org/ 
policy_research/surveys_indices/cpi/2009/cpi_2009_table).  In 2005, it ranked 11th (out of 179) with a score 
of 8.6 out of 10. 
11 Transparency International (2010). WT/TPR/S/244 Trade Policy Review 
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(6) TRADE AGREEMENTS AND ARRANGEMENTS  
(i) WTO 
17. Australia is an original Member of the WTO, and grants at least most-favoured-nation (MFN) 
treatment to all its trading partners.  Australia is  not a member of the WTO plurilateral agreements.  
Australia, a founding member of the Trade Po licy Review Mechanism (TPRM), supports the 
Mechanism as a way to promote transparency in trade policy making.  
Doha Round  
18. Since its previous TPR, Australia has particip ated actively in the Doha Round of multilateral 
trade negotiations;  its latest submissions relate to trade in services, trade and environment, trade 
facilitation, TRIPS, and fisheries subsidies.  Austra lia considers that the successful conclusion of the 
Doha Round offers enormous poten tial gains to its workers and businesses.  In addition to market 
opportunities for Australian industrial producers a nd for service providers, Australian farmers are 
expected to benefit from reductions of between 70% -80% in domestic support in major "subsidizers" 
markets.12  In October 2010, the Government considered  that although the global gains from the Doha 
Round deal being contemplated in 2008 were not  as good as could reasonably be expected, it could 
provide a basis for further negotiati on, strengthening, and enhancement.13  New approaches to the 
negotiations, and concerted political-l evel attention, are viewed as crucial to making progress in the 
near future.14  
Aid for trade 
19. According to the Australian Government's  2009 Trade and Development Statement, 
Australia's demand-driven, carefully designed a nd coordinated aid for trade policy is built on 
two pillars:  improving market access;  and building competitive economies.15  The first pillar 
involves, inter alia,  building the capacity of developing countries to negotiate effectively, assisting 
them to implement trade agreements, helping them to overcome the practical trading challenges, and 
strengthening their institutional architecture.  The second pillar consists of investing in developing 
countries' trade-related infrastructure, investing in their human resource development, facilitating 
investment and private sector development, and ensuring that trade contributes to positive 
development outcomes.  Australia's aid for trade activities have increased to $A 400 million or 10% of 
Australia's total official development assistance.  Au stralian aid for trade is made through multilateral, 
regional and bilateral arrangements, w ith the bulk going to Asia and the Pacific.  In addition to several 
ongoing programmes assisting individual countries (Ethiopia, Indonesia, Papua New Guinea, 
Viet Nam, Zimbabwe) and regions (ASEAN member  States, Pacific region countries, Africa), 
Australia has provided aid throug h its WTO-related multilateral pr ogrammes.  In 2009, Australia 
contributed $A 1.75 million to the WTO Global Trust Fund, a one-off $A 750,000 to the WTO 
                                                      
12 Australian Minister for Trade online information, "Trade at the centre of the global recovery", 
16 February 2010, Sydney.  Viewed at:  http://www.trademinister.gov.au/speeches/2010/100216_fca.html [12 September 2010]. 
13 Australian Minister for Trade online information, "Trade liberalisation the pathway to growth, jobs 
and prosperity", 4 October 2010, Parliament House, Ca nberra.  Viewed at: http://www.trademinister.gov.au/ 
speeches/2010/ce_sp_101004.html [15 November 2010]. 
14 Department of Foreign Affairs and Trade (2010a). 
15 Department of Foreign Affairs and Trade online information, Trade and Development Statement.  
Viewed at:  http://www.dfat. gov.au/trade/trade_and_develo pment/aid_for_trade.html. Australia WT/TPR/S/244 
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Standards and Trade Development Facility (STDF) , and committed $A 3 million to the Advisory 
Centre on WTO Law (ACWL) in 2010.16 
(ii) Preferential and regional trade agreements 
20. While Australia's trade policy emphasizes the primacy of the multilateral trading system 
(section (5)), its network of regional trade arra ngements was further expanded during the review 
period.17  Australia recognizes the ultimate goal of the complementary relationship between 
multilateral, regional, and bilateral trade agreements is trade liberali zation and economic integration.  
Nevertheless, it is aware of the da nger of being drawn back into preferential trade deals that favour 
one country, or a group of countries over another,  and stifle economic inte gration and impede the 
efficient allocation of resources.18  Australia's commitments in its RTAs go beyond the current WTO 
Agreements in a number of areas, including services and investment.  RTA commitments on 
intellectual property rights are extended to all tradi ng partners.  Australia aims at high quality and 
comprehensive preferential trade agreements19;  its strategic approach to bilateral free-trade 
agreements (FTAs) consists of negotiating or discussing prospects with its top export markets.  
21. In November 2009, the Productivity Commission was asked to examine the effectiveness of 
such trade agreements in:  responding to nati onal and global economic and trade developments;  
contributing to efforts to boost Australia's engage ment in the region and evolving regional economic 
architecture;  reducing trade and investment barrier s and safeguarding against the introduction of new 
barriers;  and lending support to the international trading system and the WTO.20  According to some 
submissions, the benefits depend largely on the sub sequent uptake of opportunities by business;  in 
addition, RTAs involve negotiation, administrative, and compliance costs.  The Productivity 
Commission's final report was due on 27 Novemb er 2010.  In their June 2010 communication 
Australia and seven other WTO Members proposed the resumption and re-energising of work to 
improve understanding of the cross-cutting elements  of RTAs and of their systemic significance, 
through descriptive and factual papers without valu e judgments or legal analysis, prepared by the 
Secretariat on its own responsibility, on horizontal, cross-cutting issues.21 
(a) Plurilateral trade agreements  
Asia Pacific Economic Cooperation (APEC) 
22. Australia continues to pursue regional trade a nd investment liberalization through the Asia 
Pacific Economic Cooperation (A PEC) forum established in 1989.22  Under the 1994 Bogor 
Declaration, APEC members made a voluntary commitment to achieving free and open trade and 
investment by 2020 (2010 for developed economies)  through unilateral, re gional, and multilateral 
                                                      
16 WTO press release, "Technical Assistance: Australia donates CHF 2.1 million to WTO development 
programmes", 17 July 2009.  Viewed at:  http://www.wto.org/english/news_e/pres09_e/pr563_e.htm 
[25 November 2010]. 
17 Productivity Commission (2010a). 
18 Australian Trade Minister online information, "T rade at the centre of the global recovery", 
16 February 2010, Sydney.  Viewed at:  http://www.trademinister.gov.au/speeches/2010/100216_fca.html 
[12 September 2010]. 
19 The growing importance of Australian and global trade in services and investment means that 
attention is being focused increasingly on restrictions to services trade that are dealt with at FTA level 
(Chapter IV).   
20 Productivity Commission (2010a). 
21 WTO document WT/REG/W/54/Rev.1,  11 June 2010. 
22 APEC members accounted for a large proportion of  Australia's trade, as 75.3% of merchandise 
exports in 2009 (71.7% in 2006) and 69.8% of imports (72.3% in 2006) were directed to or originated in an APEC partner (UNSD, Comtrade database (SITC Rev.3)). WT/TPR/S/244 Trade Policy Review 
Page 24 
 
 
liberalization;  each year member economies present Individual Action Plans (IAPs) that set out the 
measures they have taken or inte nd to take to achieve the 2010/ 2020 goal.  Australia's second IAP 
peer review, held in January 2007, noted,  inter alia,  steady progress in trade liberalization and 
facilitation;  in areas such as tariffs, non-tariff me asures, services, and investment, Australia had 
implemented autonomous liberalizati on beyond its Uruguay Round commitments.23  APEC members' 
progress towards the 2010 Bogor Goals is currently under assessment.    
Association of Southeast Asian Nations (ASEAN) – Australia –New Zealand (AANZFTA) 
23. The AANZFTA between Australia, New Zealand,  and most ASEAN countries has been in 
force since 1 January 2010 (for Australia).24  It was notified to the WTO under GATT Article XXIV 
and GATS Article V, on 8 April 2010.25  AANZFTA is a comprehensive FTA covering goods, 
services (including temporary movement of business people), investment, intellectual property rights, 
e-commerce, competition policy, and economic coope ration, with particular emphasis on capacity 
building.26  Tariffs will be eliminated through phased reductions.  By 2020, between 90% and 100% 
of tariff lines of the more developed ASEAN countries and Viet Nam should be eliminated;  this is to 
cover 96% of current Australian exports to the regi on.  By 2020, all Australian tariffs on imports from 
AANZFTA parties should be removed;  as of 2010, 96% of Australian tariff lines were subject to 
tariff-free treatment.27  For ASEAN countries, exclusions from tariff elimination commitments should 
not exceed 1% of all tariff lines.  Longer transiti on periods and lower tariff elimination outcomes are 
in place for Viet Nam and the three least developed countries (Myanmar, Cambodia, and Laos), in recognition of their status as newer ASEAN members with less developed economies.  The rules of origin (ROOs) under AANZFTA provide for a high degr ee of flexibility;  for around 83% of tariff 
sub-headings, the ROOs will be based on a "co-equa l" approach where exporters can choose to meet 
either a CTC-based (change in tariff-classification) ru le or an equivalent RVC (regional value content) 
rule.  
(b) Bilateral trade agreements 
Australia–New Zealand Closer Economic Relations Trade Agreement (ANZCERTA) 
24. Under the ANZCERTA, Australia's longest-standi ng free-trade agreement, bilateral trade in 
all products originating in the two countries has re mained free of tariffs, quantitative restrictions, 
contingency measures
28, and certain subsidies.  A 1988 protocol on trade in services provides for 
                                                      
23 APEC (2007). 
24 AANZFTA entered into force on 1 January 2010 for 8 of the 12 signatories, i.e. Australia, 
New Zealand, Brunei Darussalam, Myanmar, Malaysia, the Philippines, Singapore, and Viet Nam, and on 
12 March 2010 for Thailand.  The remaining ASEAN countries (Cambodia, Indonesia, and Laos) were working to complete their internal requirements at the earliest possible opportunity in 2010.  The Agreement will enter 
into force for these parties 60 days after the dates of their respective notifications. 
25 WTO document WT/REG284/N/1 S/C/N/545, 9 April 2010, and online information.  Viewed at:  
http://rtais.wto.org/UI/CRS howRTAIDCard.aspx?enc=PSVt51JwOGE4c 3benznAZaPtvbP2Y0W/oSiPelafl3Q=  
[12 September 2010]. 
26 Australian Minister for Trade online information, "Trade at the centre of the global recovery", 
16 February 2010, Sydney.  Viewed at:  http://www.trademinister.gov.au/speeches/2010/100216_fca.html 
[12 September 2010]. 
27 DFAT online information, "Fact sheet – Over view of Tariff Outcomes".  Viewed at:  
http://www.dfat.gov.au/trade/ft a/asean/aanzfta/factsheets/oto.pdf [15 November 2010]. 
28 Imports from New Zealand are not subject to anti-dumping actions (such actions are handled by 
competition laws) or safeguard measures (W TO document G/SG/N/1/AUS/2, 2 July 1998). Australia WT/TPR/S/244 
 Page 25 
 
 
market liberalization, national and MFN treatment, and access to commercial presence.29  T h e  
agreement is supported by a network of bilate ral arrangements on various issues, including the 
movement of people, mutual recognition of standa rds, government procurement, and aviation.  New 
ROOs for ANZCERTA entered into effect on 1 Janua ry 2007, with product-specific rules replacing 
the previous minimum 50% factory-cost rules, which were considered to be complex30;  the new 
ROOs require a CTC specified at the HS 6-digit level, and in the case of a small but significant 
minority of tariff lines a secondary regional value confirmation that significant transformation has taken place.  A five-year transition period, ending on 1 January 2012, allows importers to claim origin 
either under these new rules or under the old factory-cost rules.  
Canada–Australia Trade Agreement (CANATA) 
25. Under the CANATA, Australia provides tariff preferences ranging from 1% (certain fruits 
and vegetables, lumber) to 15% (car batteries)  on the MFN rate on over 400 tariff lines (tariff 
preferences of 5% on 300 lines and 15% on 70 lines) .  Nevertheless, its significance has declined as a 
result of unchanged margins of preference since 1 960, sweeping reductions in tariff rates in both 
countries, and changes in patterns of trade; furt hermore, most of the C ANATA commitments have 
been superseded by tariff reductions negotiated in the WTO.
31   
Singapore–Australia Free Trade Agreement (SAFTA) 
26. The SAFTA, which entered into force on 28 July 2003, was notified to the WTO under 
GATT Article XXIV and GATS Article V on 25 September 2003, and examined by the WTO 
Committee on Regional Trade Agreements  on 8 October 2004 and 28 July 2005.32  In addition to 
tariff elimination, SAFTA improves market access fo r Australian exporters of services, particularly 
education, environmental, telecommunications, and professional services.33  It also provides a more 
open and predictable business environment across a range of areas, including competition policy, 
government procurement, intellectual property ri ghts, e-commerce, customs procedures and business 
travel.34  The second ministerial review of SAFTA w as concluded on 27 July 2009;  amendments 
arising from the review relate to government pr ocurement, investment, telecommunications, and 
intellectual property, and are expected to enter into effect in early 2011.35   
Thailand–Australia Free Trade Agreement (TAFTA) 
27. The TAFTA entered into force on 1 January  2005, was notified to the WTO under GATT 
Article XXIV and GATS Article V on 27 Dece mber 2004, and was considered by the WTO 
                                                      
29 In 2009, 4% of Australian exports were directed to New Zealand, Australia's seventh largest export 
market for goods and services;  New Zealand is Australia's eighth source of import (UNSD, Comtrade database (SITC Rev.3)). 
30 DFAT online information.  View ed at:  http://www.dfa t.gov.au/geo/new_zealan d/roos.html;  and the 
amended ANZCERTA ROOs viewed a t:  http://www.dfat.gov. au/geo/new_zealand/anz_cer/anz_cer_rules_of_ 
origin.html [16 September 2010]. 
31 DFAT online information.  Viewed at:  http://www.dfat.gov.au/g eo/canada/brief.html 
[13 September 2010]. 
32 WTO document WT/REG158/N/1 S/C/N/233, 1 October 2003, and online information.  Viewed at:  
http://rtais.wto.org/UI/PublicSh owMemberRTAIDCard.aspx?enc=Edy U9OuGnpdPTg3EXz/WP1dozKMHMbe
4VrzIXLz+a7Q= [12 September 2010]. 
33 Singapore is Australia's largest trade and investment partner in South-East Asia;  in 2009, Singapore 
was Australia's eighth export market and its four th source of imports (UNSD, Comtrade database 
(SITC Rev.3)). 
34 DFAT online information.  Viewed at:  h ttp://www.dfat.gov.au/trade/negotiations/australia_ 
singapore_agreement.html [12 September 2010]. 
35 Text of SAFTA viewed at:  http://www.dfat .gov.au/trade/negotiations/safta/index.html. WT/TPR/S/244 Trade Policy Review 
Page 26 
 
 
Committee on Regional Trade Agreements on 14-15 May 2007.36  Upon the TAFTA's entry into 
force, Thailand eliminated its tariffs on around 53% of all tariff items, accounting for 78% of current 
Thai imports from Australia37;  a further 41% of Thai tariff lines, representing 17% of imports from 
Australia at the time of entry into force, were phased-out in 2010.38  All remaining tariffs, including 
tariff-rate quotas, will be eliminated by/in 2015 or 2020, with the exception of skim milk powder and 
liquid milk and cream, for which the tariff-rate quotas will be eliminated in 2025.  By 2010, Australia 
had eliminated virtually all tariffs on goods of Thai  origin, except for 225 tariff items of apparel and 
certain finished textiles (4% of trade), which will be phased down to zero in 2015.  In addition to 
issues relating to trade in goods, the TAFTA covers trade in services, investment, movement of 
natural persons, e-commerce, competition po licy, and intellectual property rights.  
Australia–United States Free Trade Agreement (AUSFTA) 
28. The AUSFTA, which entered into force on 1 January 2005, was notified to the WTO under 
GATT Article XXIV and GATS Article V on 22 De cember 2004, and considered by the WTO 
Committee on Regional Trade Ag reements on 13 September 2007.39  The AUSFTA is a 
comprehensive agreement that covers goods, ser vices (including financial services), investment, 
government procurement, standa rds and technical regulations, competition-related matters, 
e-commerce, intellectual property rights, labour issues, and environmental matters.40  Upon its entry 
into force, duties were eliminated on more than 80% of tariff lines for Australian goods entering the 
United States, with quota volumes for dairy and ot her agricultural products increasing immediately 
and into the future.  Almost all remaining U.S. tariffs will be removed by 2015, apart from those on 
beef, which will have duty-free access from 2022, and some dairy goods, where a tariff-rate quota will 
continue to apply.  As from 2005, 86.6% of Au stralia's tariff lines (97.6% of imports from the 
United States, period average 2002-04) were free of duty for products originating in the United States;  
a further 3.1% of tariff lines (0.5% of 2002-04 imports ), mainly textile products, have been duty free 
since 2010.41  By 2015, all of Australia's tariff lines, are to be fully liberalized, with the exception of 
eight lines (used passenger motor vehicles), which retain a specific duty (0.1% of imports from the 
United States).  Changes to the relevant annex es of AUSFTA were listed in March 2010 to ensure 
compliance with HS changes that entere d into effect on 1 January 2007.   
Australia – Chile Free Trade Agreement(AClFTA) 
29. The AClFTA entered into force on 6 March 2009, was notified to the WTO under GATT 
Article XXIV and GATS Article V on 3 March 2009, and was examined by the WTO Committee on 
                                                      
36 The full text of the TAFTA is contained in WTO document WT/REG185/1, 18 February 2005, and 
online at:  http://www.dfat.go v.au/trade/negotiations/aust-thai/tafta_toc.html [16 September 2010].  See also, 
WTO document WT/REG185/N/1, S/C/N/311, 5 January 2005, and online information.  Viewed at:  
http://rtais.wto.org/UI/PublicShow MemberRTAIDCard.aspx?enc=YYuDN7xlkFIOozLDlR+cDfuijMHIxZpdtL
n6hBLfhEM=   [12 September 2010]. 
37 In 2009, Thailand was Australia's tenth largest merchandise export market and its seventh source of 
imports (UNSD, Comtrade database (SITC Rev.3)). 
38 DFAT online information.  Viewed at:  http://www.dfat.gov.au/trade/negotiations/aust-thai/ 
goods_outcome_benefits_031003.html  [12 September 2010]. 
39 The full text of AUSFTA is contained in WT/REG184/1, 11 February 2005, and at:  
http://www.dfat.gov.au/trade/negotia tions/us_fta/ [16 September 2010].  See also, WTO document 
WT/REG184/N/1, S/C/N/310, 23  December 2004, and online information.  Viewed at:  http ://rtais.wto.org/UI/ 
PublicShowMemberRTAIDCard.aspx?enc=B94W41tG1vwF/jmx6mkvMDJegT0g5+wvRY2nhziPpBE= 
[12 September 2010]. 
40 In 2009, the United States was Australia's third most important trading partner. 
41 WTO document WT/REG184/3, 11 June 2007. Australia WT/TPR/S/244 
 Page 27 
 
 
Regional Trade Agreements on 14 June 2010.42  Upon entry into force of the ACFTA, 90.9% of 
Australia's tariff lines became duty free, corresponding to 99.5% of imports by value from Chile (during the period 2006-08);  the remaining 9.2% of tariff lines, covering 0.5% of imports from Chile, 
are to be reduced progressively and eliminated by 2015.
43  In 2009, 87% of Chile's tariff, 
corresponding to 98.6% of imports by value from Aust ralia became duty free;  the remaining tariffs 
are to be eliminated by 2015.44  Similarly to Australia's other FTAs, the AClFTA is a comprehensive 
agreement also covering trade in services, inv estment, government procurement, standards and 
technical regulations, competition-related matters , e-commerce, and intellectual property rights.   
30. The AClFTA was expected to offer Austra lian exporters opportunities across the board, 
including in mining and energy technology an d services, engineering and consulting services, 
franchising and services, education and training, in formation technology, tourism and infrastructure. 
Other areas that were to benefit include energy (c oal, LNG, renewable energy), agriculture (dairy, 
meat, ovine and bovine genetics, production tec hnologies) and food and beverages, including wine.45  
(c) Future agreements 
31. Negotiations for further bilateral agreements  are under way with China (since 2005), Japan 
(since 2007), Malaysia (since 2005), and Korea (Rep .of) (since 2009);  early announcements of these 
negotiations (except those with Korea) have been made to the WTO and are available for consultation 
on the RTAs database.  Negotiations between Indon esia and Australia for a Comprehensive Economic 
Partnership Agreement were a nnounced on 3 November 2010.  Regarding trade agreements at 
regional level, negotiations are ongoing with the Gulf Cooperation Council (since 2007), also the 
subject of an early announcement to the WTO;  the Pacific Agreement on Closer Economic Relations 
(PACER) Plus negotiations within the Pacific Is lands Forum (since 2009);  and the Trans-Pacific 
Partnership (TPP) Agreement (since 2010), which w ill expand on the current Trans-Pacific Strategic 
Economic Partnership Agreement be tween Brunei Darussalam, Chile, Ne w Zealand and Singapore, in 
force since 2006.46  A feasibility study is currently bei ng conducted on a bilate ral agreement with 
India.  
(d) Unilateral preferential arrangements  
32. Australia has continued to grant preferential tr eatment unilaterally to imports from developing 
and least developed countries under the Australian System of Tariff Preferences (ASTP);  Forum Island countries under the South Pacific Regi on Trade and Economic Cooperation Agreement 
(SPARTECA);  Papua New Guinea under the Papua New Guinea and Australia Trade and 
Commercial Relations Agreement (PATCRA).  Since 1 July 2003, Australia has provided duty- and 
quota-free access for all goods originating in the 50 countries designated as LDCs by UNCTAD 
(Chapter III).  
                                                     
 
42 Full text of AClFTA viewed at:  http://www.a ustlii.edu.au/au/other/dfat/treaties/2009/6/;  and for 
more information see:  http://www.dfat.gov.au/geo/chile/fta/index.html [16 September 2010];  WTO document WT/REG263/N/1, S/C/N/484, 5 March 2009, and online information.  Viewed at:  http://rtais.wto.org/ 
UI/PublicShowMemberRTAIDCard.aspx?enc=p+Shs WlLnAcvlvAR037oHks7Y64dKWq/MvC5QRJs9Bg= 
[12 September 2010]. 
43 WTO document WT/REG263/1, 1 April 2010. 
44 Two-way trade between Australia and Chile is growing fast, rising from $A 857 million in 2007 to 
$A 1.4 billion in 2008.  Australia is the 4th largest foreign investor in Chile, with around US$3 billion of direct 
investment.  DFAT online information.  Viewed at:  http://www.dfat.gov.au/ geo/chile/fta/facts_at_a_ 
glance.html [16 September 2010]. 
45 DFAT online information.  Viewed at:  http://w ww.dfat.gov.au/geo/chile/f ta/facts_at_a_glance.html 
[16 September 2010]. 
46 The United States and Peru are also participa ting in the TPP negotiation (Productivity Commission, 
2010a). WT/TPR/S/244 Trade Policy Review 
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(7) TRADE DISPUTES AND CONSULTATIONS  
33. Australia considers that dispute settlement is cen tral to the multilateral trading system, to help 
make the global trading system more secure and predictable.47  Since its last Trade Policy Review, 
Australia has not initiated any disputes in the WT O but in 2007 it was a respondent in a dispute 
initiated by New Zealand concerning Australia's  measures affecting the importation of apples 
(Chapter III)48;  a dispute initiated by the EU in 200349, against Australia's quarantine regime, was 
settled by means of a mutually agr eed solution in March 2007.  Furthermore, during the review period 
Australia was involved as a third party in 20 di spute cases, which dealt with various measures 
affecting, inter alia,  footwear, fasteners, wine and spirits, ci garettes, tuna, poultry, bovine meat, raw 
materials, and IT products.50  
34. Australia seeks to resolve disputes through intern ational agreements that include state-state 
and/or investor-state dispute settlement provisions.51  Dispute resolution services are provided by, 
inter alia :  the Australian International Disputes Centre ;  the Australian Centre for International 
Commercial Arbitration;  the Institute of Arbitrators and Mediators Australia;  and the Lawyers Engaged in Alternative Dispute Resolution (LEADR ) organization.  No trade or trade-related 
inter-governmental dispute has been settled outside the WTO since 2007. 
(8) F
OREIGN INVESTMENT REGIME  
35. Australia continues to encourage foreign invest ment consistent with its national interest.52  Its 
screening regime (see below) allows consideration of, inter alia , community concerns about foreign 
ownership of certain Australian assets.53  A foreign investment policy objective is to balance these 
concerns against the strong economic benefits that  arise from foreign investment.  Australia remains 
relatively well positioned at the in ternational level in terms of ease  of doing business and investment 
risk.54   
                                                      
47 Productivity Commission (2010b). 
48 Following the circulation of the panel's report (WT/DS367/R) on 9 August 2010, both parties 
decided to appeal to the Appellate Body.  Viewed a t:  http://www.wto.org/english /tratop_e/dispu_e/cases_e/ 
ds367_e.htm. 
49 WTO document WT/DS287/1, 9 April 2003. 
50 Of those 20 disputes, only 14 panels were established, some of them to consider several disputes.  
WTO information online.  Viewed at:  http://www.wto .org/english/thewto_e/countries_e/australia_e.htm 
[28 September 2010]. 
51 Australia is a party to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral 
Awards (New York Convention), the Convention on the Se ttlement of Investment Disputes Between States and 
Nationals of other States 2006 (ICSID), and the UNCITRAL Model Law on International Commercial Arbitration with Amendments as Adopted in 2006 (the Model Law).  In addition, dispute settlement provisions 
have been included in FTA agreements and Investment Promotion and Protection Agreements (IPPAs) 
(sections (6)(ii) and (8)). 
52 The Treasury (2010a). 
53 In 2010, Australia ranked 32nd (out of 48 economies) in the OE CD's FDI Restrictiveness Index, 
which consists of indicators on equity restrictions, sc reening, key personnel, and operational restrictions;  
screening contributed largely to Australia's overall result,  which is below the OECD countries' average.  The 
authorities indicated that the OECD index does not accurately capture Australia's investment barriers because the FDI restrictiveness is based on reservations agains t the OECD's Codes rather than actual FDI restrictions 
(Kalinova, Palerm, and Thomsen, 2010). 
54 In 2010, the World Bank ranked Australia 9th (out of 183 economies) for overall ease of doing 
business, the same position as in 2009;  nevertheless, its ranking, in terms of protecting investors dropped by 
4 positions to 57th.  The authorities indicated that this drop reflects improvements of protection in other 
economies rather than a decline of prot ection in Australia (World Bank, 2010). Australia WT/TPR/S/244 
 Page 29 
 
 
36. Under its Foreign Acquisitions  and Takeovers Act 1975, acco mpanying regulations, and 
foreign investment policy, Australia maintained  its screening process to ensure that foreign 
investment is not contrary to the "national interest";   foreign investment restrictions are maintained in 
certain sensitive sectors, such as airports, banking,  residential real estate, telecommunications, and 
transport (civil aviation and shipping)55, and possibly, more recently, natural resources.56  T h e  
screening processes, undertaken by the Foreign Inve stment Review Board (FIRB) affect only major 
investment applications, defined as any purchase by a foreign entity, and any associates, of more than 
15% of an Australian company, or by several fo reign entities of more than 40% in aggregate.  
Investors must notify the Government of their prop osal, prior to commencement, if it exceeds a set of 
monetary thresholds.57  Large foreign investment projects are screened in accordance with a 'national 
interest' test, which is not defined under the Act;  in  effect, it is determined by the Government based 
on a range of factors58, and is interpreted on a case-by-case ba sis.  The authorities consider that 
Australia's mode 3 commitments under the GATS ar e not subject to the national interest test.59 
37. During the review period, the main changes to Australia's foreign investment regime involved 
the removal of foreign ownership restrictions in the media sector (April 2007) as well as the 
re-introduction on 26 June  2010 of screening arrangements for acqui sitions of residential real estate 
by foreign persons, which had been waived temporarily in December 2008.60  The December 2008 
real-estate-related changes reduced the proportion of approvals subject to conditions to 58% of total 
approvals in 2008/09 compared with 79% in 2007/08.  Furthermore, to reduce compliance costs, as 
from 22 September 2009 proposals by private foreign investors to invest in Australian businesses 
need to be notified only when they involve acq uisitions of 15% or more in a business worth 
$A 231 million or more.   
                                                      
55 The Airports Act 1996 stipulates a 49% foreign ownership limit for airports, a 5% airline ownership 
limit, and cross-ownership limits between Sydney airport (together with Sydney West) and Melbourne, 
Brisbane, and Perth airports.  The Shipping Registration Act 1981 requires that, for a ship to be registered in Australia, it must be majority Australian-owned (i.e. owned by an Australian citizen, a body corporate 
established by or under law of the Commonwealth or of a State or Territory of Australia), unless the ship is 
designated as chartered by an Australian operator (The Treasury, 2009a). 
56 In 2009, a senior official of the Foreign Investment Review Board (FIRB) made public statements 
concerning guidelines for foreign investment in the Australian resources sector, thus providing further insight 
into FIRB’s decision-making process in this regard.  Re portedly, the offici al indicated that the Government's 
preference was for foreign investments in major Australian resource companies to be less than 15% of their 
capital, for investment in greenfield projects to be belo w 50%, and for the listed Australian companies to remain 
listed.  However, FIRB's published policy documents do not refer expressly to the informal guidelines discussed by this senior official and so its level of support for his comments remain unclear.  In any event, it has been rare 
for FIRB to reject outright applications for approval of investments in the resource sector (see Crean et al). 
57 These thresholds include:  acquisitions of substantial interests in an Australian business where the 
value of its gross assets, or the proposal values it, in  excess of $A 100 million;  proposals to establish new 
businesses involving a total investment of $A 10 million or more;  takeovers of offshore companies whose 
Australian subsidiaries or gross assets exceed $A 200 million and represent less than 50% of global assets (Novak, 2008;  and The Treasury, 2009a). 
58 In its assessment of foreign investment proposal s the Government typically considers:  national 
security;  competition;  other government policies (including tax);  impact on the economy and the community;  
and the character of the inve stor (The Treasury, 2010a). 
59 The authorities indicated that Australia's schedul e contains no requirements for economic means 
tests, joint ventures or to limit foreign exchange or profit repatriation.  Moreover, there are no horizontal 
limitations on foreign equity participation or on the type of commercial presence an investor must use.  
Australia's GATS mode 3 commitments re flect current market access and draw trading partners' attention to the 
existence of the policy framework.  In addition, the GA TS commitments state that "[…] proposals for foreign 
interests to invest in the services identified in the Schedule […] are approved unless national interest 
considerations arise". 
60 Foreign Investment Review Board (2010). WT/TPR/S/244 Trade Policy Review 
Page 30 
 
 
38. Despite the restriction-related concerns discu ssed above, of the 5,352 applications approved 
in 2008/09 (32% less than the 7,841 approvals in 2007/08), 3,086 were approved subject to conditions 
and 2,266 without conditions.61  Only three proposals, all related to real estate acquisitions, were 
rejected  in 2008/09 (14 in 2007/08), representing less than 0.1% of all proposals considered.  Between 
2007/08 and 2008/09, there was an overall increase of 8% in approvals in sectors other than real 
estate;  97% of proposals were decided within 30 days, and cases that took more than 30 days generally reflected delays in receiving suffici ent information from the parties or significant 
complexity or sensitivity.   
39. Australia maintains bilateral investment prom otion and protection agreements (IPPAs) with 
22 economies.
62  The IPPAs grant MFN treatment for foreign investment, provide 
nationalization/expropriati on guarantees, and establish dispute settlement mechanisms (section (7)).  
Australia, a contracting member of the International Centre for the Settlement of Investment Disputes 
(ICSID)63, has not had any investment-related dispute involving foreign companies over the review 
period.  
40. Double-taxation avoidance (DTA) treaties base d on the OECD Model of National Treatment 
are in force with several economies.64  During the period under review, amendments to DTA treaties 
with Japan, New Zealand, and South Africa entered into force, as well as the DTAs with Finland, 
France, and Norway.  In September 2010, the entry into force of DTAs with Chile (March 2010) and 
Turkey (April 2010), and of amendment protocol s to DTAs with Belgium (June 2009), Malaysia 
(February 2010), and Singapore (September 2009) we re pending, due to Australia's lengthy domestic 
procedures for giving the force of law to its tax treaties.  The DTA with Chile is the only treaty 
containing MFN provisions;  no DTA contains "tax sparing" provisions.  Since 2007, Australia has 
negotiated Tax Info Exchange Agreements w ith 25 economies, of which 8 are in force.65 
                                                      
61 Foreign Investment Review Board (2010). 
62 Argentina;  Chile;  China;  th e Czech Republic;  Egypt;  Hong Ko ng, China;  Hungary;  India;  
Indonesia;  Laos;  Lithuania;  Mexico;  Pakistan;  Papua New Guinea;  Peru;  the Philippines;  Poland;  Romania;  Sri Lanka;  Turkey;  Uruguay;  and Viet Nam (FIRB online information. Viewed at: 
http://www.firb.gov.au/content/international_investme nt/bilateral.asp?NavID=27 [7 September 2010]). 
63 Australia observes the notification and transparency provisions of the OECD Code on Liberalization 
of Capital Movements, and subscribes to the OECD D eclaration on International Investment and Multinational 
Enterprises (the Declaration), as well as the OECD Guid elines for Multinational Enterprises (the Guidelines). 
64 Argentina, Austria, Belgium, Canada, China, the Czech Republic, Denmark, East Timor, Fiji, 
Finland, France, Germany, Greece, Hungar y, India, Indonesia, Ireland, Italy,  Japan, Kiribati, Korea (Rep. of), 
Malaysia, Malta, Mexico, the Netherlands, New Zealan d, Norway, Papua New Guinea, the Philippines, Poland, 
Romania, Russian Federation, Singapore, the Slovak Republic, South Africa, Sp ain, Sri Lanka, Sweden, 
Switzerland, Chinese Taipei, Thailand, the United Kingdom, the United States, and Viet Nam (The Treasury 
online information.  Viewed at:  http://www.treas ury.gov.au/documents/625/XLS/Australian_Tax_Treaty_ 
Table_September%202010.xls [29 September 2010]). 
65 These economies are Anguilla, Antigua & Barbud a, Aruba, the Bahamas, Belize, Bermuda, British 
Virgin Islands, the Cayman Islands, Cook Islands, Domini ca, Gibraltar, Grenada, Guernsey, Isle of Man, Jersey, 
Marshall Islands, Monaco, Netherlands Antilles, Samoa, San Marino, St Kitts and Nevis, St Lucia, St Vincent & 
the Grenadines, Turks and Caicos Islands, and Vanu atu (The Treasury online in formation.  Viewed at: 
http://www.treasury.gov.au/documents/625/XLS/Aus tralian_Tax_Treaty_Table_September%202010.xls 
[29 September 2010]).