WORLD TRADE  
ORGANIZATION  WT/TPR/M/178 
18 April 2007 
 (07-1613) 
Trade Policy Review Body 
5 and 7 March 2007  
 
 
 
TRADE POLICY REVIEW 
 
AUSTRALIA 
 
Minutes of Meeting  
 
Chairperson:  H.E. Mr. Muhamad Noor Yacob (Malaysia) 
 
   Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF AUSTRALIA 4 
III. STATEMENT BY THE DISCUSSANT 7 
IV. STATEMENTS BY MEMBERS 9 V. REPLIES BY THE REPRESENTATI VE OF AUSTRALIA AND ADDITIONAL 
COMMENTS 16 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 23 
 
 
     
 
    
 
    
 
  
Note:   Advance written questions by WTO Memb ers and the replies provided by Australia are 
reproduced in document WT/TPR/M/178/Ad d.1 and will be available online at 
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm. WT/TPR/M/178 
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  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The fifth Trade Policy Review of Austra lia was held on 5 and 7 March 2007.  The 
Chairperson (H.E. Mr. Muhamad Noor Yacob) welcomed the Australian delegation, led by 
Mr. Christopher Langman (First Assistant Secretary, Office of Trade Negotiations, Department of Foreign Affairs and Trade) and Ambassador Bruce Gosper, and the discussant H.E. Ambassador 
Sun Zhenyu (China).  As usual, the discussant w ould speak in his personal capacity and not as 
representative of his country.  In accordance with th e established procedures, the discussant had made 
available, in advance, outlines of the main i ssues he intended to raise (document WT/TPR/D/154). 
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures of the meeting.  The report by Australia was contained in document WT/TPR/G/178 
and that of the WTO Secretariat in WT/TPR/S/178.   As indicated in WT/TPR/6/Rev.1, the Member 
under review should provide written answers, by the beginning of the review meeting, to questions 
submitted at least two weeks before the meeting.  Questions posed subsequently should be answered, 
to the extent possible, before the start of the second session of the meeting.  Questions left 
unanswered at the end of the second session should be  answered in writing no later than one month 
after the meeting.  Questions by the following de legations had been submitted in writing at least 
two weeks in advance of the meeting and had b een transmitted to the delegation of Australia:  
Singapore;  United States;  Switzerland;  the Sepa rate Customs Territory of Taiwan, Penghu, Kinmen 
and Matsu (Chinese Taipei);  the European Communiti es;  Chile;  Argentina;  Thailand;  Japan;  
Brazil;  Canada;  Mexico;  and Peru.  Copies of these questions and of the answers provided by the 
delegation of Australia were availabl e in the meeting room.  The Republic of Korea;  Turkey;  China;  
South Africa;  Malaysia;  Colombia;  Hong Kong, Chin a;  Pakistan;  India;  and Bolivia had submitted 
written questions after the two-week deadline.  Th ese questions had also been transmitted to the 
delegation of Australia;  copies of these questions and of the answers provided by the delegation of 
Australia were available in the meeting room.  Copies of all advance questions, as well as the responses received from the delegation of Aust ralia, are reproduced in WT/TPR/M/178/Add.1. 
3. The Chairperson acknowledged that Austra lia's economy had been growing for 
15 consecutive years, due in large part to the prudent  macroeconomic policies and structural reforms.  
In addition, the high degree of transparency in th e formulation and evaluation of Australia's economic 
policies enhanced government accountability and public  debate over the merits of these policies.  
Consequently, transparency had contributed greatly to  the continued process of reform, in which trade 
liberalization, much of it unilateral, had played  an integral part.  The Australian Government 
emphasized the importance of trade for its economy and the prosperity of its people;  accordingly 
Australia was committed to pursuing vigorously the reduction of trade barriers and the expansion of 
its markets through multilateral, regi onal and bilateral approaches.   
4. The Chairperson also pointed out that the economy was facing a number of challenges.  The 
main challenge in the short term was the maintena nce of macroeconomic stability in the face of the 
high commodity prices.  The Australian Government believed that the economy's vulnerability to an 
eventual end to the commodity price boom had been reduced by earlier reforms, such as the 
introduction of a floating exchange rate in the ea rly 1980s and more flexible domestic markets for 
goods, services, capital, and labour.  Nonetheless, ther e was a need to press ahead with structural 
reforms as outlined in the National Reform Age nda, especially those concerning key infrastructure-
related services, such as electricity, water, and tran sport, in order to raise productivity.  Increased 
productivity would also enable Australia to a ddress the longer-term challenge of an ageing 
population, particularly the associated rise in health and social welfare costs and implications for the 
labour market. WT/TPR/M/178 
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  II. OPENING STATEMENT BY THE RE PRESENTATIVE OF AUSTRALIA 
5. The representative of Australia
 emphasized the Australian Government's strong support for 
the Trade Policy Review process, which could enhance transparency and confidence in the 
multilateral trading system.  He explained that tr ade was vital to Australia, and the Government 
placed a high priority on strengthening the WTO system, which had played a critical role in underpinning the rapid growth of the global economy.   
6. Australia had worked hard in recent decades to enhance the competitiveness of its economy 
through domestic reform and trade opening.  Costs and benefits of public policies were subject to 
regular scrutiny and debate, including by the independent Productivity Commission.  He considered that Australia's trade regime was transparent, and was designed to build greater engagement with the 
global economy.  
7. Since its last Review in 2002, significant trade liberalization and structural reform had been 
implemented;  this, together with the maintena nce of a robust fiscal and monetary framework, had 
helped to sustain strong growth.  Australia had entered its 16
th year of economic expansion, with an 
average increase of 3.7% per annum since 1991.  C ontinued growth would require further reform at 
home and additional efforts to build new markets abroad.  Domestic challenges included managing 
the nearly full employment, enhancing labour force skills, and ensuring that infrastructure met the requirements of the rapidly growing resources exports.  
8. Australia pursued market opening through a comb ined multilateral, regional, and bilateral 
approach.  Its highest priority was to conclude th e Doha Round in a manner th at could deliver genuine 
new commercial opportunities.  As complementing efforts, the Australian Government had been 
pursuing ambitious, WTO-consistent, free-trade agreements, and continued to build regional 
economic integration, particularly through APEC, which Australia was to host in 2007. 
9. Australia's economic outlook remained positive.  Market confidence had been enhanced by 
the Government's focus on maintaining a balanced  budget and an inflation target of 2-3%.  
Macroeconomic stability had encouraged private inv estment, and contributed to the low public debt 
and increased competitiveness.  In addition,  unemployment was at a 30-year low. 
10. Since its previous Review, reforms had been  introduced across a wide range of sectors, 
including services, foreign investment, and labour market.  Labour market reforms were aimed at increasing flexibility by simplifying agreement- making procedures and reducing the regulatory 
burden.  The general screening th reshold on foreign investment had been raised from $A 50 million to 
$A 100 million.  Further reforms designed to enha nce productivity were planned with respect to, 
inter alia , education and training, energy, transport, and infrastructure.  Water management was 
another major issue.  Also, a focused effort was under way to reduce the regulatory burden at the local, state, and federal levels. 
11. Australia placed a high priority on the multilatera l trading system:  it had strongly supported 
the launch of the Doha Round, and remained convinced  that these negotiations were the best hope for 
reducing the significant distortions to world trad e.  An ambitious outcome from the negotiations 
would bolster the global economy, enhance opportun ities for all WTO Members, and help integrate 
developing countries into the global trading system. 
12. Agricultural reform was the centre of the negotia tions, due to the high market access barriers, 
the scale of trade-distorting support, and the con tinued use of export subsidies.  It was of key 
importance to developing countries with comparative advantage in agriculture, and to efficient farm  WT/TPR/M/178 
 Page 5 
 
 
  exporters such as Australia.  Australia would contin ue to work hard with the Cairns Group and with 
other Groups for a genuinely liberalizing outcome on agriculture. 
13. A significant outcome on NAMA was also critical, given the importance of the sector to the 
global economy and the evolving nature of industr ial production.  He emphasized the importance of 
improving the quality and coverage of services commitments.  All WTO Members, including 
developing countries, had much to gain from the increasing tradeability of services, and it was increasingly clear that an efficient servi ces sector was key for economic growth. 
14. Australia had been implementing a wide range of capacity-building programmes to help 
developing countries take advantage of new trading opportunities.  Since July 2003, Australia had 
provided quota-free and duty-free market access for all LDCs on all products. 
15. Australia welcomed the decision made by WTO Members in February 2007 to resume full 
negotiations on the Doha Round.  However, he co nsidered that the only package with consensus 
would be one leading to new genuine commercial  opportunities in agriculture, manufacturing, and 
services, which could not be delivered by the offers currently on the table.  In addition to the Doha 
negotiations, Australia continued to give a high priority to existing WTO rules and mechanisms. 
16. Since the last Review, Australia had concluded ambitious free-trade agreements with 
Singapore, Thailand, and the United States sinc e 2002.  Negotiations on new FTAs were under way 
with ASEAN and New Zealand, China, and Malaysia .  In December 2006, the Australian Government 
announced the intention to start FTA negotiations  with Japan, the Gulf Cooperation Council, and 
Chile.  He considered that FTAs could deliver significant trade and investment liberalization;  
therefore, comprehensive FTAs could complement the WTO, create new trading opportunities, and facilitate domestic reform.  By tackling issues not co vered directly by WTO rules, such as investment, 
FTAs could help push forward wider reform.  At th e same time, Australia was concerned about the 
risks that weak FTAs and RTAs po sed for the world trading system;  he wished that Members could 
agree to make WTO disciplines in  this area more effective. 
17. On specific issues:  Australia's simple averag e applied tariffs had fallen further since its 
previous Review to 3.5%.  Only passenger moto r vehicles (PMV) and automotive components, and 
textiles, clothing, and footwear (TCF) had a numbe r of tariffs above 5%;  a transparent tariff-only 
regime applied to these sectors, and there were no tariff quotas.  Further tariff reductions for these 
sectors were scheduled to bring all tariffs down to no more than 5%.   Tariffs on PMVs were to fall to 
5% in 2010, with a review in 2008.  Tariffs in the TCF industry would not be above 5% by 2015. 
18. Australia's quarantine system w as designed to preserve its favourable pest and disease status 
and its unique native flora and fauna.  The Government took international obligations in this area very 
seriously;  it considered that the quarantine syst em was science based and consistent with the SPS 
Agreement.  In October 2006, Australia announced re forms to its import risk analysis procedure to 
make it more streamlined, tim ely, and transparent, by, inter alia , setting up a maximum timeframe, 
enhancing transparency, and strengthening scientific  scrutiny of risk assessments.  These changes 
would take effect in the first part of 2007 to impr ove the efficiency and effectiveness of Australia's 
quarantine system. 
19. Regarding concerns by several Members that  Australia did not wish to join the WTO 
Government Procurement Agreement (GPA), he  noted that Australia had long had an open 
government procurement market, and reforms in recen t years had led to competition, value for money, 
and non-discrimination, which we re key principles of the syst em.  Although Australia supported 
international reform of government  procurement, it considered that the GPA was overly regulatory WT/TPR/M/178 
Page 6  
 
  and did not produce efficient outcomes.  Australia had been monitoring developments in the GPA, 
and would reassess its position if its concerns were addressed. 
20. Australia has a major stake in maintaining a healthy and open multilateral trading system, 
which, in particular the conclusion of the Doha Ro und negotiations, remained Australia's highest trade 
priority.  Australia would continue to work hard  for genuine trade liberalization, and integrating 
multilateral commitments with regi onal and bilateral initiatives.   WT/TPR/M/178 
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  III. STATEMENT BY THE DISCUSSANT 
21. The discussant  (H.E. Ambassador Sun Zhenyu) acknow ledged that Australia's economic 
performance over the past four years very impressive .  Australia used to be heavily dependant on 
agriculture, and the production of wheat, cotton, sugar, beef, and dairy products had played a 
dominant role in the economy.  However, after de cades of reform, agriculture accounted for only 
3.1% of GDP and 3.5% of total employment in 2005 /06.  Although a very small population worked 
on the farm, Australia's agriculture was so effici ent and competitive that it remained the world's 
largest exporter of beef and wool, the second larges t exporter of wheat, a major exporter of sugar, 
fruit, and vegetables, and forestry products.  He commended the Australian Government for these 
achievements, which were not brought about through subsidies, but through continued 
macroeconomic and structural reform, as well as mark et competition and advancement in science and 
technology. 
22. The long-term macroeconomic and structural re forms had led to the rise in productivity and 
improved competitiveness of Australia's goods and services in the world market.  The reforms had 
also made the economy more resilient to external shoc ks, such as the Asian fina ncial crisis in the late 
1990s and more recently, the drought in 2006.  As  a result of the structural reform, Australian 
manufacturing and services industrie s had developed rapidly:  si nce 1993, Australia's export of 
automobile had increased by five-fold and exports  of medical equipment had also multiplied.  The 
services industry represented 68.9% of Australia's GD P and 75% of total employment in 2005/06.  
Total services exports, including telecommunication,  education, insurance, banking, and professional 
services, exceeded $A 11 billion in 2004.   
23. Australia's rapid economic development could also  be attributed to the establishment of an 
open economy, the high degree of transparency in its trading system, and its strong commitment to the 
multilateral trading system.  As an original Memb er of the GATT and WTO, Australia had played a 
prominent role in the multilateral negotiations.  As  the leader and coordinator of the Cairns Group, 
Australia had been consistent in the fight against tr ade-distorting subsidies, and had been active in the 
current agriculture negotiations in the Doha R ound.  Australia was also a sponsor and founding 
Member of APEC, which had been playing a very  important and constructive role in the world 
economy. 
24. He also pointed out some of the unfinished bus iness in reform and trade policy.  Australia's 
foreign investment regime was generally transpar ent and liberal, but there were foreign equity 
restrictions in certain "sensitive" sectors, and a screening process was still applied to ensure that 
foreign investment was not contrary to the "nationa l interest".  Infrastructure constraints remained, 
due to the increased demand for resource-based product s.  Also, while trade liberalization had been an 
integral part of the structural reforms in Australia, non- ad valorem  rates and compound duties were 
maintained on some imports.  Thus, he was concer ned with the appropriateness of Australia's present 
mix of monetary and fiscal policies, as its ec onomic growpth had been led by a global boom in 
demand for mineral products.  He sought clarifi cation on how Australia intended to ensure the 
prudence of its macroeconomic policies and sustain the economic growth, as well as its plans to 
handle the infrastructure constraints. 
25. Trade liberalization had been an integral part of  the structural reforms that had contributed to 
Australia's impressive economic performance.  The overall simple average applied MFN tariff fell 
from 4.5% in 2002 to 3.8% in 2006.  However, the ta riffs applied to textiles, clothing, footwear as 
well as passenger motor vehicles were still considerab ly higher than the average applied MFN rate.  
He asked whether Australia had any plans to re duce the unpredictability resulting from the widened 
gap between its applied and bou nd rates, and how it intended to address the issue of high 
non-ad valorem  duties. WT/TPR/M/178 
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  26. The strict quarantine controls and food sta ndards had been of concern to many Members 
during previous Reviews.  The Australian Govern ment had taken steps to improve import risk 
analyses in order to make the process more transpar ent, efficient and timely.  He wondered whether 
the Government had any plans to reduce the strict ness of its SPS measures, and how it would ensure 
that SPS measures were not used as non-tariff barriers to trade. 
27. Export quotas and state-trading arrangements re mained on certain agricultural products.  
Following a national inquiry, in December 2006 th e Wheat Export Authority issued licences to some 
non-AWB companies to export bulk wheat.  Thus, he asked about the Government's plans to further 
liberalize the state-trading arrangements for the export of agricultural products, including bulk wheat. 
28. While the Doha multilateral trade negotiations remained Australia's top priority, increased 
importance was being attached to the negotiation of RTAs.  He asked why the Government was 
moving towards RTAs.  He also asked about the infl uence of RTAs on Australia 's international trade, 
such as whether they had resulted in trade diversion or creation, and how Australia intended to ensure 
its regional and bilateral initiatives did not underm ine its commitment to the multilateral trading 
system. 
29. Australia continued to provide assistance to domestic producers in the form of tariff 
concessions, tax incentives, grants or concessional lo ans.  Manufacturing continued to receive the 
largest portion of budgetary assistance.  Hence, he asked about the Government's plans to reduce and 
phase out the different types of subsidies. 
30. He encouraged Australia to continue the macro and structural reform.  He commended 
Australia for its strong commitments to the DDA and the multilateral trading system, and hoped it 
would continue to play a leadership role in the negotiations, and to help realize a successful 
conclusion of the DDA.  WT/TPR/M/178 
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  IV. STATEMENTS BY MEMBERS 
31. Members thanked the Australian delegation and the Secretariat for their reports.  They looked 
forward to receiving any outstanding replies to their advance written questions.  Several Members 
noted that their bilateral trade and investment ti es with Australia had been strengthened in recent 
years. 
32. Many Members commended Australia for the high degree of transparency in its economic 
policies, which enhanced government accountability and had contributed greatly to the continued 
reform process since the 1980s.  Au stralia's real GDP had been grow ing at an annual rate of 3.5% 
during the past 15 years.   
33. Members appreciated Australia's active role at the WTO, including its strong support for the 
Doha Development Agenda.  Partic ularly, Members recognized that Australia, as Chair of the Cairns 
Group, had played a leadership role in agriculture  negotiations, which had resulted in the July 2004 
Framework Agreement.  They also noted Austra lia's increasing involvement  in bilateral/regional 
trading arrangements, and urged WTO- compatibility in this regard.   
34. Members recognized that  Australia had low level of applie d tariff protection, and commended 
its unilateral reduction of tariffs for passenger motor vehicles and textiles, clothing and footwear in 
2005.  Some Members were concerned with plan s for further tariff reduction, the gap between 
Australia's bound and applied rates, and tariff escala tion, which could impede developing countries' 
industrialization. 
35. Members expressed concern about the screening pr ocedures for foreign direct investment.  
Several Members urged Australia to reassess its non-participation in the WTO Agreement on 
Government Procurement.  Members commented on the strictness of Australia's SPS requirements, 
and remarked on steps taken to improve import risk an alysis.  They also urged Australia to consider 
eliminating the state-trading arrangements fo r exports of a few agricultural products.  
36. The representative of Brunei Darussalam on behalf of ASEAN countries  encouraged 
Australia to continue to play a positive and constr uctive role in the eventual reduction of the high 
protection in the agriculture sector.  Although ag riculture did not account for a major portion of the 
Australian economy, it played a much bigger role  in exports.  ASEAN appreciated that domestic 
support in agriculture in Australia was well below th e OECD average, and that tariffs on agricultural 
products remained low at an average of 1.4% in 2006.  Nonetheless, ASEAN was concerned by 
Australia's strict SPS measures and rigid quarantine frameworks, particularly with its Revised Draft 
Generic IRA Report for Prawns and Prawn Products, circulated in November 2006.  ASEAN did not 
consider the draft IRA report and interim measures scientifically justifiable, and therefore urged 
Australia to carefully review the newly proposed IR A measures in this regard.  The current quarantine 
requirements for ornamental fish imported into Au stralia were onerous:  the requirement for up to 
21 days of quarantine was on top of a 14-day pr e-export quarantine period, which acted as an 
effective barrier to export such fish to Australia. 
37. Services accounted for nearly two thirds of Australia's GDP, and about three quarters of 
employment in 2004/05.  Financial services had been  undergoing continuous regulatory reforms, in 
particular, stricter legislative and institutional frameworks had been introduced to align them with 
international practices.  The services sector was es pecially important to consumers and businesses, as 
it provided essential inputs and hence determined th eir competitiveness in the international fora. 
38. The representative of the United States  reminded the Australian Government that further 
liberalization in certain areas could enhance the count ry's competitiveness.  He raised concerns about 
SPS, state-trading arrangement, and food standards.  He applauded Australia's recent actions in further WT/TPR/M/178 
Page 10  
 
  privatizing Telstra, and encouraged the Government to implement its plans for divesting its remaining 
minority share expeditiously.  He also requested  the Australian Government to provide further 
information on plans to eliminate the remaining restrictions. 
39. The representative of Switzerland
 was pleased to note that the Australian economy was 
running at almost "full capacity" with low unempl oyment rate.  It continued to benefit from strong 
global commodity prices;  accordingly its terms of  trade had increased by more than 30% over the 
past three years, and estimated to be at thei r highest level since the early 1950s.  Apart from 
exogenous shocks, such as natural disasters (inc luding droughts), the main problem to the economy 
seemed to be the underlying inflationary pressures.   The prospects for the Australian economy were 
good, and its performance had benef ited greatly from the structural reforms, particularly trade 
liberalization.  Switzerland was interested in me asures to make trade (and economic activities in 
general) ecologically sustainable.  Hence, he ac knowledged the large potential in Australia to improve 
water management, which could make the compe titive agriculture sector more environmentally 
friendly.   
40. The representative of Chinese Taipei  recognized that Australia's objective in the NAMA 
negotiations was to achieve some commercially meaningful improvement in market access.  Sectoral 
liberalization was one of the most effective ways to  achieve this objective, a nd he urged Australia to 
play a more active role in this area.  On the fore ign investment regime, he raised question about the 
screening process, which was used to ensure that foreign investment w as not contrary to the "national 
interest".  He also asked about the reasons for main taining certain sectoral restrictions;  for example, 
foreign banks were not permitted to accept initial de posits of less than $A 250,000 from residents and 
non-corporate institutions in Australia.  He comp ared the effective rate of assistance (ERA) for 
textiles, clothing, and footwear (TCF) industry (24.2%) in 2003/04 with that for the manufacturing 
sector (4.5%), and urged Australia to reduce trade pr otection for the TCF sector in the near future.   
41. The representative of Chile  stated that bilateral trade with Australia would increase 
substantially as a consequence of the bilateral ag reement under negotiation.  He expressed concern 
about Australia's rigorous SPS measures, but appreciat ed the changes introduced since 2003.  He also 
hoped that Australia would increase the proportion of national standards equivalent to international 
standards.   
42. The representative of the European Communities  noted that the EC had been Australia's 
largest economic partner since 1980, and remained its leading investor, accounting for 34% of total 
FDI in Australia in 2005.  He encouraged Australia to  continue its structural reforms, and considered 
that trade liberalization should include regulatory issues and measures to deal with non-tariff barriers, 
which might become key obstacles to trade as tariffs fell.  The EC urged Australia to keep the right 
balance between further economic and social deve lopment, as well as environmental protection.  
Trade policy should contribute to more sustainable production patterns, and he was interested to know 
if Australia had developed a conceptual framework  to promote the link between trade policies and 
sustainable development.  
43. Noting progress on business tax reform, the EC en couraged Australia to continue its tax 
system reform, tackling in particular burdensome ta xes such as the luxury car tax (LCT) and the wine 
equalization tax (WET).  These taxes had a discrimin atory effect on imports, and he urged Australia 
to phase out the LCT gradually and to revise the wine producer rebate.  
44. On SPS measures, he urged Australia to estab lish fair, non-discriminatory, and transparent 
rules for agricultural imports, and align its SPS m easures with international guidelines, such as the 
new recommendations adopted by the OIE on trade in beef and blood products with respect to BSE.  
In addition, he noted the significant backlog of out standing market access requests yet to be reviewed.  
He encouraged Australia to speed up the revision process.  He also urged Australia to continue  WT/TPR/M/178 
 Page 11 
 
 
  improving the functioning of the import risk anal ysis process, and ensure that the process was 
independent and up-to-date.  
45. The representative of Argentina  highlighted the importance of transparency, which 
represented essential values in the multilateral trad ing system.  Australia's economic growth was 
against the background of trade liberalization and inte rnal structural reform.  Thus, he encouraged 
Australia to continue these reforms, in particular  in infrastructure such as electricity, water, and 
transport, which would help to increase productiv ity and resolve future challenges.  Although 
Argentina and Australia exported commodities, their production profile was different and their main 
markets varied substantially.  The composition of their bilateral trade had changed significantly in 
recent years.  He urged Australia to play an  active role in the agriculture negotiations.  
46. The representative of Japan  raised three issues:  he considered Australia's FDI regime to be 
rather restrictive;  he was encouraged that  the Productivity Commission had recommended AWB's 
single-desk export arrangement to be reviewed with  priority;  and he urged Australia to reassess its 
non-participation in the WTO GPA.  As the two economies were truly interdependent, Japan and 
Australia were starting negotiations on a free-trade agreement. 
47. The representative of Brazil  noted that bilateral ties had been strengthened over recent years, 
in the areas of trade, investment, educationa l services, and the production of ethanol.  He had 
concerns with the single-desk export arrangement, but applauded steps taken by the Government to 
promote competition and to move towards a more  liberal market structure for wheat exports, 
including the creation of the Wheat Export Mark eting Consultation Committe e on 12 January 2007.  
Nonetheless, he urged Australia to introduce great er competition, and align the system with the 
objectives of the Hong Kong Ministerial Declarati on with regard to "state-trading enterprises". 
48. He highlighted certain SPS measures, which negatively affected Brazilian exports to 
Australia.  For example, the unwarranted bureau cratic requirements had sometimes unduly held up 
containers of canned meat from Brazil.  He noted th at the frequent requests for information in addition 
to the sanitary certificate, in the form of "additiona l declarations", functioned as obstacles to the free 
flow of trade to Australia.  He welcomed the IR A reform and urged Australia to implement a new 
system based strictly on scientific criteria and on  principles of transparency and predictability for 
exporters.  The new system should apply to poultr y, so as to create mark et access opportunities for 
competitive Brazilian chicken meat. 
49. The Doha Declarations asserted that intellect ual property rules should not prevent countries 
from protecting public health.  He asked the Austra lian Government's view on the implementation of 
Paragraph 6 of the Declaration, against the back drop of its recent regional and bilateral trade 
agreements.  He urged Australia to take a more positive approach towards negotiations in the Doha 
Round on the introduction of a "disclosure of origin" requirement in the TRIPS Agreement. 
50. The representative of Canada  noted the cordial and long-standi ng bilateral trade relationship, 
and recognized the high stakes in ensuring a stable a nd predictable, rules-based international trading 
system.  The two economies continued to adjust to  changes in the global economy and accorded high 
priority to increasing productivity and competitiven ess to ensure long-term economic wellbeing.  
Canada acknowledged Australia's commitment to genui ne trade liberalization at the multilateral level, 
and appreciated its ongoing leadership in this area.   
51. Canada, as a member of the Cairns Group, shared Australia's commitment to achieving 
significant reforms in world agricultural trade th rough comprehensive multila teral negotiations;  key 
outcomes would be the elimination of all forms of export subsidies, a substantial reduction in 
trade-distorting domestic support, and real and significant improvements in market access for agricultural and food products.  She welcomed im provements to the import risk analysis process and WT/TPR/M/178 
Page 12  
 
  encouraged further reform to the Australian quaran tine system to ensure that SPS-related decisions 
were made on a timely and scientific basis.  
52. Canada was interested in Australia's bilateral trade agenda, and considered that this would 
complement and support the general objectives of comp rehensive trade liberalization in all sectors, as 
prescribed by GATT Article 24.   
53. The representative of Mexico
 noted that some tariff rates remained high in Australia, 
particularly those related to TCF products.  He a ppreciated Australia's unilateral liberalization of its 
trade regime, which would help a nation to remain competitive.  Given that the principal problem for 
the Australian economy was the lack of capacity to m eet demand in a number of sectors, particularly 
infrastructure (including transport constraints for the mining industry), he urged Australia to introduce 
further reforms.   
54. There had been rapid increase in bilateral tr ade, which he hoped would increase further and 
expand beyond the automotive industry.  He noted that  some restrictions remained in the automotive 
sector.  Bilateral investment could increase afte r the two countries signed a treaty for reciprocal 
protection of investment in 2006. 
55. The representative of Peru  expressed concerns on the rela tionship between intellectual 
property and the protection of biodiversity, the la tter a matter of great importance to Peru.  He 
commended measures adopted to reduce overfishing,  as overfishing could lead to considerable 
problems in the future.  He appreciated Australia's  reduction in MFN tariffs, noting that some tariffs 
remained to be consolidated.  He commented on Au stralia's price control regulation, which included 
both formal and informal price monitoring.  Peru was concerned that, in the deregulation process price 
control should be imposed on and be limited to  natural monopolies with little competition.   
56. The representative of Korea  commended the Australian Government for successfully 
engineering its macroeconomic policy toward impres sive economic growth.  Korea believed that the 
wide ranging structural reforms, coupled with the progressive trade liberalization policies, had been 
and would continue to be the major source of  Australia's economic strength and success.   
57. She commended Australia for maintaining a hi gh degree of openness in terms of low average 
tariffs, but noted that tariff rates on TCF and PMV products remained high.  She urged Australia to 
further reduce tariffs on these products.  Kor ea was concerned about Australia's automotive 
competitiveness and investment scheme (ACIS).  As  the ACIS was an industry-specific assistance 
programme to protect Australia's domestic vehi cle industry, it was not consistent with WTO 
regulations.  From Australia's in itial reply to questions submitte d by Members, the Government 
seemed to believe that the WTO Agreement allowed Members to provide assistance to specific 
industry sectors;  however, she urged Australia to abolish the system to ensure fair competition 
between domestic and foreign industries.  Korea had raised this issue in the 2002 TPR of Australia, 
and hoped that there would be no need to raise it again in the next one. 
58. Australia had frequently resorted to an ti-dumping measures, although the number of 
anti-dumping cases had declined since 2003.  She re quested Australia to take a more prudent 
approach in initiating anti-dumping investigations a nd to enhance fairness and transparency in its 
investigation procedures. 
59. The representative of Turkey  noted that trade liberalization had contributed to Australia's 
economic performance, and that Australia had been ac tive at the global, regional,  and bilateral levels.  
However, considerable tariff and non-tariff barriers re mained in Australia, and she had concerns with 
respect to the gap between applied and bound tariff ra tes, the tariff escalation, and Australia's strict 
SPS regime.  She also noted the various levies and ch arges as well as export restrictions and licensing  WT/TPR/M/178 
 Page 13 
 
 
  requirements applied in the agriculture sector.  Tu rkey believed that some of these measures were 
applied in a discriminatory manner, and asked Au stralia to elaborate further on these measures. 
60. The representative of China  commended Australia for its unila teral tariff reductions in 2005 
in sectors of important export interests to devel oping countries (including textiles, clothing, and 
footwear).  China encouraged Australia to continue  its efforts in this direction and transform these 
unilateral initiatives into multilateral commitments .  These commitments were vital to the Doha 
Round negotiations, and he urged Austra lia to continue to play a constructive role in the Round.   
61. China had acquired a better knowledge of the tr ade policies and measures of Australia after 
reading the Secretariat and the Government Reports.  Through the TPR process, he was interested in 
hearing Australia's view on local-content requirement s, subsidies, and export assistance, and plans to 
improve the situation. 
62. Although bilateral trade and investment had in creased substantially, there was still potential 
for further development.  He emphasized China's willingness to continue collaboration with Australia 
to realize such potentiality.  Realizing this objec tive would contribute not only to the welfare of the 
Chinese and the Australian people, but also to th e trade liberalization process of the world.  
63. China was concerned about Australia's strict TBT and SPS measures, and he urged Australia 
to re-evaluate these measures.  On services trade, China urged Australia to consider, in its future 
structural reforms, further liberalizing sectors and m odes of services that were of great export interest 
to developing Members. 
64. The representative of Colombia  noted the role of transparency in Australia's economy, and 
commended Australia for being one of the ten countri es with the lowest corruption.  Australia also 
ranked third in the 2005 United National Human Development Index, sixth in The Economist  Quality 
of Life Index, and one of the 20 countries with  the highest competitiveness index according to the 
World Economic Forum.  Australian education and training services had made it an important 
destination for Colombian students. 
65. Despite Australia's very open and transparent trade system, there were still tariff and 
non-tariff barriers.  She was concerned with the goods and services tax (GST) , which was applied to 
most imports with a few exceptions.  She was in terested in knowing the scope and conditions for 
these exceptions.  Given that national standard coul d be drawn up on the basis of transparency and 
consensus when there was no appropriate interna tional standard, she asked how these two principles 
were implemented.   
66. As a member of the Cairns Group, Colombia enc ouraged Australia to continue its leadership 
in agriculture negotiations.  She also encouraged the Australian Government to submit an ambitious 
offer in the Doha Round, particularly with respect to mode 4, which could help to handle the public 
finance challenge of an aging population.   
67. The representative of Hong Kong, China  was encouraged by the r ecent increase in bilateral 
trade, and hoped that the growth momentum would continue, particularly in tourism.  She commended 
Australia for its continued efforts in liberalizing the tariff regime, but noted that the applied tariff rates 
for textiles, clothing, and footwear remained consider ably higher than the averag e.  On average, there 
was a gap of about 6% between Australia's applied and bound rates, which undermined the 
predictability of its tariff regime.  Given that th e services sector constituted a dominant part of the 
Australian economy in terms of contribution to GDP  and employment, continued liberalization of 
trade in services would be crucial for its furt her economic development.  Hong Kong, China was 
concerned with foreign equity restrictions in so me services sectors in Australia, including media and WT/TPR/M/178 
Page 14  
 
  civil aviation, as well as the screening process for fore ign investment, and encouraged Australia to lift 
the relevant restrictions.   
68. The representative of Pakistan
 noted that although bilateral re lations were good, trade had not 
grown much, and Pakistan had a significant trade defi cit, for various reasons.  Despite Australia's low 
average tariff, products of export interest to Pa kistan faced pronounced tariff peaks and non-tariff 
barriers:  the applied tariffs on textiles, clothing, a nd footwear posed a challenge to Pakistan's exports 
as imports from countries with similar socio-economic  development level enjoyed zero duty and other 
preferential benefits.  At the Cairns Group meet ing in September 2006, Pakistan had requested 
Australia to reconsider its preferential scheme to  be WTO-compatible, objective, transparent, and 
non-reciprocal.  Regarding the temporary movement  of natural persons, although there were no 
country quotas for skilled persons, the Australian vi sa control policy accorded less equal treatment to 
some countries. 
69. The representative of India  commended Australia for its im pressive economic performance, 
but pointed out that, based on the OECD's "Economic  Policy Reforms:  Going for Growth 2007", the 
income gap between Australia and the best performin g countries remained substantial, due to a large 
productivity shortfall.  Also, despite the rapid incr ease in bilateral trade during recent years, he was 
concerned with the consistently large negative ba lance for India.  A Trade and Economic Framework 
Agreement was signed in March 2006,  and in February 2007, the 10th India-Australia Joint Ministerial 
Commission (JMC) Meeting was held in New Delhi.   The two countries had resolved to promote 
bilateral investment, including in energy , mining, infrastructure, food processing, 
telecommunications, information and communicati ons technology, tourism, biotechnology, and 
financial services.  India had some concerns relati ng to SPS measures, market access issues, stringent 
visa requirements, and trade in services.  
70. The representative of Bolivia  noted the low level of bilateral trade, and Bolivia's trade deficit 
with Australia in the last four years.  In the Cair ns Group, Bolivia shared the same goal as Australia to 
achieve an expanded market, create new trade flows, reduce subsidies, and strengthen WTO 
disciplines.  The special and differential treatme nt for developing countries was based on their 
capacity to make new commitments, and she urged Australia to consider the goals of developing 
countries to a greater extent.  Bolivia also had c oncerns about the reforms that would introduce more 
flexibility in the labour market.  
71. The representative of New Zealand  stated that the Australia-New Zealand Closer Economic 
Relations Trade Agreement (CER) was the foundation of  the bilateral relationship.  The CER was one 
of the world's most comprehensive FTAs, although it was signed in 1983.  Si nce the realization of 
free trade in all goods and nearly all services in 19 90, additional reductions in  non-tariff barriers and 
compliance costs had been achieved through polic y coordination and mutual recognition;  one 
example was the move towards a rules of origin re gime based on change of tariff classification.   
72. New Zealand and Australia shared  the goal of a single economic market.  Against a backdrop 
of strong economic growth and regulatory reforms in both economies, there were still areas where 
policy alignment could benefit bilateral trade and th e business environment.  For example, Australia’s 
review of civil aviation policy had resulted in in ternational airlines from New Zealand being accorded 
cabotage rights in Australia, and a move towards mu tual recognition of aviatio n safety certification.  
A Memorandum of Understanding on the Coordina tion of Business Law also allowed for early 
consultation on any future reform of business law. 
73. In general the two countries had a close and co llaborative relationship on biosecurity issues.  
New Zealand believed that recent changes to Austra lia's import risk analysis process would lead to 
increased transparency and predictability for processing biosecurity market access requests.  
However, Australia had almost completed its proces s for the market access request for New Zealand's  WT/TPR/M/178 
 Page 15 
 
 
  apples, and the proposed market access conditions we re disappointing.  The Australian measures were 
not justified, and New Zealand was still considering all its options.  
74. The two countries worked actively at regional le vel to liberalize trade and deepen economic 
relationships.  For example, an ASEAN-Austra lia/New Zealand Free Trade Agreement was under 
negotiation.  New Zealand would also fully suppor t Australia to host the APEC forum this year.  
Australia had taken a leading role in multilateral lib eralization, and had not used FTA activities as an 
excuse not to proceed with multilateral liberalization.   
75. The representative of Uruguay  welcomed Australia's active participation in all areas of WTO 
activities, particularly in agriculture through its lead ership in the Cairns Group.  One of the principal 
goals of the Cairns Group was to achieve fundament al reform in agriculture, which would place the 
sector on the same basis as other sectors in world tr ade, so as to realize a fairer multilateral trading 
system.  Both Uruguay and Australia were founding members of the Cairns Group;  to achieve better 
market access for agricultural products they had been working together to defend the legitimate 
interests of efficient agricultural exporters agai nst subsidies granted by  a number of developed 
countries. 
76. The representative of Costa Rica  commended Australia's impressive economic performance, 
and pointed out that Australia's experience demonstrat ed the benefits of trade liberalization, a large 
part of which had been unilateral.  Bilateral trade was very limited, which could be attributed to the 
distance and the lack of air or maritime trade routes between the two countries.  He appreciated 
Australian efforts for more than two decades, whic h had helped to make the agriculture sector no 
longer the most distorted sector in international tr ade.  Australian policies were coherent, with the 
goal of fundamental reform of the agriculture sector, and recent changes in SPS measures would 
increase transparency, efficiency, and predictability  for access to the Australia n market.  Australia's 
success was based on the Government's belief that  trade openness was closely linked with social 
welfare improvement.  Costa Rica supported this view , and agreed that a positive result of the Doha 
Round would be the most effective and efficien t way of achieving the potential of developing 
countries.  
77. The representative of Nigeria  urged Australia to ensure that the increased importance being 
given to RTAs would not diminish its commitment to the multilateral trading system.  He also asked Australia, as an important player in the multilateral trading system, to make a great deal of sacrifice and exercise flexibility to ensure that the outcome  of the Doha Round nego tiations was development 
friendly.  WT/TPR/M/178 
Page 16  
 
  V. REPLIES BY THE REPRESENTATIVE OF AUSTRALIA AND ADDITIONAL 
COMMENTS 
78. The representative of Australia
 (Mr. Langman) appreciated the constructive tone of Members' 
statements.  He felt that there was a good understa nding of the measures Australia had taken in recent 
years to open up and to enhance the competitiveness of its economy.  Earlier reforms had focused on 
building a robust economic framework and on allowi ng the market to deliver efficient economic 
outcomes.  Unilateral trade liberalization had played a key part in Australia's reform process, which 
had been driven by the understanding that building an open economy was the best way to deliver high 
living standards.  However, as reform had been a staged process, transition measures had been taken 
in some cases to help industrial sectors to make  adjustment.  Regarding Members' concerns on a 
number of issues, he pointed out that either a re form process, or review arrangements, were under 
way.  In addition, the practical impact in trad e of some of the concerns was rather limited.  
Nonetheless, the opportunities and challenges ar ising from the rapidly changing global economy 
required Australia to continue to  build its competitiveness, and to  enhance the transparency and 
efficiency of its economy.  Australian experience had highlighted the benefits of trade reform, and all 
WTO Members, including Australia, had a major stak e in bringing the Doha Round negotiations to a 
successful conclusion.   
79. Some Members considered the export infrastructur e a constraint for Australia's future export 
performance.  He acknowledged that the significant gr owth in resources exports in recent years, and 
the improvement in competitiveness, had put increased  pressure on infrastructure in relation to, for 
example, coal exports.  In Australia's federal system, states and territories governments had direct 
responsibility for infrastructure.  Cooperation be tween the Australian governments, and between 
infrastructure service providers and exporters, had improved.  Hence, regulatory processes had been 
streamlined, infrastructure investment plans brou ght forward, efficiency improved to maximize 
existing capacity, coordination improved, and disput es minimized.  In 2006, the Council of Australian 
Governments (COAG) had agreed to provide a si mpler and more consiste nt national regulatory 
system for major infrastructure.  New legislation was also passed through the Federal Parliament, to 
improve third-party access to infrastructure facilitie s.  New investment in the mineral sector had 
grown rapidly in the last few years.  As attenti on had been given to these challenges, things were 
expected to move in a positive direction. 
80. He agreed that Australia's applied tariffs in  the PMV and TCF sectors were higher than in 
other sectors.  Nonetheless, Australia's average applie d tariff was only 3.5%, nearly half of the tariff 
lines were zero, and over 86% were at 5% tariff rates or  lower.  In addition, Australia had legislated a 
programme of tariff reduction to bring tariffs down to no more than 5% by 2010 for automobiles and 
2015 for TCF products.  As there were no quotas or import restrictions for these products, the 
legislated change provided a high degree of transpar ency and predictability.  Furthermore, beyond the 
IDB database, the Customs authorities listed appl ied tariffs on its website, which strengthened 
transparency.  The tariff reduction was part of a re form process, designed to build the competitiveness 
of Australia's industry by opening the market to in ternational products.  For example, tariffs on PMV 
products had declined from 27.5% in 1995 to 10% now , and would go down to 5% as legislated.   
Imports of vehicles had increased significantly over the years, and almost 80% of vehicles were imported. 
81. Some Members had also refered to the gap be tween Australia's bound and applied tariff rates, 
and suggested that this might give rise to some unpred ictability in the future.  He disagreed with this, 
and pointed out that the tariff cuts were legisl ated, and the gap reflected Australia's unilateral 
liberalization.  Australia's tariff cuts, commenced in 1988, would continue up to 2015;  during the 
Review period, not a single applied tariff rate had been raised.  WT/TPR/M/178 
 Page 17 
 
 
  82. Tariff escalation had been a concern for some  Members.  While Australia understood the 
point, it was one of the areas where the practical im pact was not very significant.  Tariff escalation 
was related mostly to the PMV and TCF sectors, as tariffs in other sectors were essentially 5% or below.  As tariffs for the PMV and TCF sectors we re to be reduced to 5%, the tariff differential 
between processed and raw materials was rather low in general terms.  
SPS-related issues 
83. The representative of Australia
 (Mr. Paul Morris, Department of Agriculture, Forestry, and 
Fisheries) noted that a number of Members had made specific reference to the revised process for conducting import risk analyses, including the improved  transparency, predictability, and timeliness it 
should deliver.  Australia had notifie d of its intention to change the import risk analysis process in 
October 2006 (G/SPS/N/AUS/203).  The revised process w as expected to take effect in the first half 
of 2007, once new regulations had entered into force.  Timeframes for the completion of IRAs would 
be imposed through regulations, wh ich would provide for standard or expanded IRAs depending on 
the complexity of the science and nature of the bio security risks.  A standard IRA would be completed 
within 24 months and an expanded one within 30 months.  It would be possible to suspend the 
timeframe, but only under strictly defined circumst ances, such as when Biosecurity Australia was 
waiting for essential information from a trading partne r.  These "stop-the-clock" provisions would be 
clearly articulated in the regulations and be public ly available.  In addition, processes for responding 
to and prioritizing import requests would be improved a nd clarified;  criteria used to allocate priority 
would be made public.  Consultatio n with stakeholders would be im proved, with an emphasis on early 
and regular engagement and consulta tion directed at issues of relevance to the scientific risk analysis 
process.  Overall, Australia believed the revised IRA processes would deliver enhanced transparency 
and timely outcomes for trading partners. 
84. Members had raised several specific issues, including the import risk analyses of 
New Zealand apples, prawns and prawn products, and the quarantine arrangements for ornamental 
fish.  A detailed draft and/or final import risk an alysis report had been released publicly for each of 
these issues, so that stakeholders could comment.  He  explains that the extensive scientific material 
presented in Australia's IRAs reflected the process’s technical rigor as well as the comprehensive consultation with stakeholders, both domestic an d international. The process ensured that the 
measures were based on the best and most relevant available scientific evidence.  Australia was not 
apologetic about its conservative approach to quaran tine:  its approach to quarantine was due to its 
relatively favourable pest- and disease-free status, and its diverse range of unique flora and fauna, 
which required responsible quarantine stewardship.   Nonetheless, Australia was also a strong 
supporter of trade in agricultural products, and was committed to its obligations under the WTO SPS 
Agreement, including not adopting measures that were more trade restrictive than required to meet its 
appropriate level of protection (ALOP). 
85. On New Zealand apples, Biosecurity Australia had released the final IRA report on 
30 November 2006.  Stakeholders had had until 12 January 2007 to submit appeals;  three had been 
submitted.  On 26 February 2007, it was announced that the Import Risk Analysis Appeal Panel, 
which was independent of Biosecurity Australia, had disallowed all claims and found one claim 
outside the grounds of appeal.  The Panel's findings helped to prove that the recommendations in the 
final report were the result of a sound process based on science.  The next step was for Australia's 
Director of Quarantine to make a policy determ ination regarding the importation of New Zealand 
apples. 
86. With respect to prawns and prawn products, Bi osecurity Australia had issued a revised draft 
IRA report for public comment on 23 November 2006.  Stakeholders had had until 21 February 2007 
to submit comments, which would be considered by Biosecurity Australia.  The revised report reflected a thorough and comprehensive review of cu rrent scientific information;  it also concluded WT/TPR/M/178 
Page 18  
 
  that the current quarantine controls needed to be strengthened to achieve Australia's ALOP.  At the 
time the revised draft IRA report was released, Bi osecurity Australia announced that, considering 
stakeholders' comments, it intended to recommend to  the Director of Quarantine that the proposed 
quarantine measures be adopted as interim measure, to address the risks identified in the report.  
Therefore, all stakeholders, including exporting co untries, had the opportunity to thoroughly review 
the revised draft report and to provide comments par ticularly on scientific and technical issues.  A 
further announcement would be made after consideration of stakeholders' comments. 
87. The current quarantine arrangements for freshwate r ornamental finfish had been introduced in 
1999 following a comprehensive science-based import risk analysis.  The measures, including those for post-arrival and pre-export quarantine, were id entified as necessary to reduce the quarantine risks 
to achieve Australia's ALOP.  In 2005, Biosecurity  Australia had commenced a review of iridovirus-
associated risks from the importation of freshwater orna mental finfish.  Interested stakeholders were 
invited to submit any information believe d to be appropriate to this review. 
88. As an agricultural exporter, Australia unders tood the difficulty that some Members, 
particularly developing countries, might have in me eting import protocols.  Australia had invested 
significantly in technical assistance to developing countries on animal and plant health issues:  its 
efforts in providing technical assistance and enco uraging bilateral consulta tions demonstrated its 
commitment to engaging constructively in SPS implementation.   
Other points 
89. The representative of Australia
 (Mr. Langman) noted that export monopolies were not in 
themselves trade distorting.  He pointed out that the future wheat-marketing arrangement in Australia 
was currently under review, and stak eholders had been consulted.  An appropriate arrangement was 
expected to be issued later in 2007.  In the m eantime, the decision-making power in relation to wheat 
exports had been transferred temporarily to the Minister of Agriculture, Fisheries and Forestry. 
90. Some Members had raised questions about RTAs , such as the reason for Australia's pursuance 
of RTAs, and whether this would reduce its co mmitment to the multilateral trading system.  
Australia's top priority remained the Doha Round,  and its pursuance of RTAs would not reduce its 
commitment to the multilateral trading system.  At the same time, Australia considered that some 
useful outcomes could be achieved through comprehe nsive and high-quality RTAs, if these could deal 
effectively with issues that were not subject to co mprehensive WTO rules.  Such RTAs could have a 
positive impact on the multilateral system, by acting as building blocks for global trade liberalization 
and reform.  RTAs should evolve, which had been demonstrated by the RTA between Australia and 
New Zealand:  this RTA had been developed over the years and covered many areas, including 
standards setting, and competition policy;  also, an investment protocol was under negotiation.  
Australia was also concerned about the poten tial downsides from the proliferation of RTAs, 
particularly those that did not meet the highest standards of comprehensiveness and ambition:  these 
might result in higher protection, and the complexity  of different rules of origin arrangements could 
increase business costs.  Members needed to think seriously about these issues in the WTO;  
accordingly Australia had been activ e in the rules discussions in re lation to RTAs.  The WTO could 
contribute to stronger disciplines in this area.  Furt hermore, Australia had wo rked hard in APEC to 
provide guidance on approaches to RTAs, so as to he lp reduce the risks and maximize the benefits.  
91. A number of Members had urged Australia to join the WTO Government Procurement 
Agreement (GPA):  Australia's approach to governme nt procurement was based on the core principle 
of achieving value for money through competition.  The approach was non-discriminatory in relation 
to suppliers of goods and services, and there was a significant focus on efficiency, effectiveness, and 
transparency.  In general, Australia supported the liberalization of government procurement markets, 
and extended the reforms in RTAs to all foreign su ppliers.  Nonetheless, it remained concerned that  WT/TPR/M/178 
 Page 19 
 
 
  the GPA was overly regulated, and would not enhan ce the efficiency and tr ansparency of its own 
process.  Joining the GPA could increase the cost s for both the Australia n Government and its 
industry.  Australia had been looking closely at r ecent revisions to the GPA, to see whether some of 
its concerns were addressed.  The representative noted concerns in  issues such as selective tendering, 
time-limits, and provisions for supplier review.  
92. Several Members had raised concerns about Aust ralia's foreign investment policy framework.  
He emphasized that Australia welcomed foreign dire ct investment.  The screening regime was rarely 
used to block business investment, and the last ti me a proposal had been rejected was in 2001.  
Recently Australia had raised the screening threshol ds for all investors from $A 50 million to $A 100 
million.  The threshold for offshore takeovers by fo reign corporations, where they had less than 50% 
of their assets in Australia, was also raised from $A 50 million to $A 200 million. 
93. The discussant  noted that many Members admired the degree of transparency of Australia's 
trade regime.  They also commended Australia's c ontinued macroeconomic and structural reform, as 
well as its contribution to the multilateral trading sy stem, particularly the Doha Round negotiations. 
94. He appreciated Australia's answer on export infrast ructure constraints, and the detailed plan to 
improve facilities, which would benefit long-term investment in Australia.  Regarding Australia's 
economic environment, he noted that the Reserve Ba nk of Australia had been tightening its monetary 
policy in order to deal with the increased inflati onary pressure.  As the tax reform might reduce the 
fiscal surplus, he asked whether the monetary polic y might affect sustained economic growth in the 
long term.  
95. On average, Australia's current applied ta riffs were very low;  however, remaining 
non-ad valorem  rates on a number of lines tended to conceal relatively high tariffs.  For example, the 
compound duty on second-hand vehicles was high.  While the overall tariff on automobiles was not 
that high, and there had been a big increase in  imported vehicles, he requested the Australian 
Government to address this non- ad valorem  tariff issue. 
96. Nearly all Members had raised the issue of SPS;  some had expressed concerns about the 
import risk analysis, others mentioned specific produc ts such as prawns, fish, poultry, and cattle.  He 
appreciated the detailed oral answers provided by the Australian delegation on the issue.  It was 
understandable that Australia had adopted a conserva tive approach to the SPS issue:  as it was not the 
only country with very strict SPS standards, and it ha d a particular situation and concerns in relation 
to human and animal health, and the environment.  He urged Australia not to let SPS measures have a 
negative impact on normal trade;  he considered  that Members should be cautious on quarantine 
issues but not adopt a zero-tolerance attitude.  Impor t risk analysis should be based on scientific 
analysis.   
97. He considered the Australian delegati on's answers on STE, RTA, and government 
procurement, to be clear and helpful.  Some Me mbers had raised the issue of intellectual property 
rights, including the protection of traditional know ledge and the Convention on Biological Diversity 
(CBD), and he asked for further details on these i ssues.  Australia's manufacturing industry continued 
to receive the largest proportion of budgetary assi stance, and textiles, clothing, and automobiles 
received more support than other sectors;  he asked  whether the Government had any plans to reduce 
assistance to the manufacturing industry.  Australia pl ayed a very constructive and positive role in the 
services negotiations.  He was interested in knowi ng whether Australia had any plans to improve its 
offers in the sectors of export interest to the de veloping countries, such as maritime transportation and 
the movement of natural persons.  The Australian de legation's explanation on the screening system for 
FDI had been very helpful.  He  wondered whether Australia coul d list the sensitive sectors where 
restrictions remained due to the "national interest".   In addition, since its previous Review, Australia 
had given preferential treatment to U.S. investor s through the FTA arrangement.  He asked whether WT/TPR/M/178 
Page 20  
 
  the Australian Government had any intention of providing investors from other countries the same 
preferential treatment.  
98. The representative of Australia
 stated that the Government did not consider the potential 
implication of the fiscal surplus on monetary policy significant.  The Government expected the fiscal 
balance to remain in surplus.  The Government 's primary policy objective was to manage the budget 
carefully, and this objective was not expected to change.  
99. Australia had very few non- ad valorem  tariffs, for example, on second-hand vehicles and 
cheese products.  However, among all Members, its tari ff regime was one of the closest to using only 
ad valorem  tariffs.  He considered his colleague ha d responded in substance on SPS issues.  
Regarding tariffs on PMV and TCF products, he repeated that fu rther tariff reduction had been 
legislated;  this was a transparent and clear programme, as the legislation was passed by the 
Parliament.  Assistance provided to these sectors w as intended to help with the transition period 
during the liberalization process, and was transparen t.  For example, the amount and the period of 
support for the PMV sector had been specified. 
100. On services, Australia had worked hard on its  second revised offer for the Doha Round.  A 
number of requests would be addressed, including areas of interest to other Members.  Australia was 
keen to table the offer.  He believed that mode 4 was addressed in the revised offer.  
101. On FDI, he stated that Australia did not have  any plans to increase the screening threshold to 
match the thresholds offered to U.S. investors.  Nevertheless, Australia was willing to negotiate with 
trading partners on the issue, and the general screening thresholds had been increased quite 
significantly in the past few months.  
102. With respect to TRIPS, CBD, and biodiversity issues, he emphasized that Australia had not 
only an indigenous community with accumulated tr aditional knowledge, but also a growing biotech 
industry.  Also, Australia was a major agricultural producer and exporter.  He noted that Australia 
shared the objective with China, Brazil a nd other Members to prevent bio-piracy.  
103. The representative of United States  appreciated the explanation in regard to amending the 
food standards code.  However, she noted that im ported food using biotechnolog y could be offered for 
sale and consumption in Australia after being assessed  and approved by FSANZ.  She asked about the 
process for third-country trading partners to  seek FSANZ product approval, and whether the 
information on the procedural step s was available to the public.  
104. The representative of Korea  sought clarification with respect to Australia's Automotive 
Competitiveness and Investment Scheme (ACIS).  Re garding the Australian Government's statement 
in the answers that the WTO Agreements allo wed Members to provide assistance to specific 
industries, she asked Australia to clarify whic h provision of the WTO Agreements permitted the 
subsidy programme. 
105. The representative of China  noted that most of China's writte n questions had been answered.  
Only one or two questions, such as the one concer ning the mining sector, remained to be addressed.   
106. Nonetheless, he expressed concerns about certa in areas of Australia's trade and investment 
regime.  He maintained that Australia's SPS re gime and practices had gone  beyond the level of 
necessary as allowed under the SPS Agreement.  Chin a recognized the legitimate ground and efforts 
made by Australia, but still believed that Australia ne eded to adopt more efforts to reduce the negative 
impact on trade, and to facilitate trade with ot her Members.  He was still concerned about the 
"national interest" considerations in the investment regi me.  Lack of specific criteria in this regard left  WT/TPR/M/178 
 Page 21 
 
 
  the authorities too much room for interpretation, an d might lead to challenges to transparency and 
would affect investor confidence.  
107. The representative of th e European Communities  noted that two of the EC's written questions 
had been addressed orally.  On the investment  regime, the EC asked whether there was any 
consideration given to align the thresholds for non-U.S. investors with those for U.S. investors, 
particularly the $A 871 million threshold for inv estment in non-sensitive sectors.  Second, on SPS 
measures, the EC asked how Australia intended to re duce the excessive backlog of outstanding market 
access requests (around 150 or more), and how ex porting countries were being consulted on the 
priorities for dealing with the backlog.  She noted the explanations about the revised IRA process, but 
requested the replies in writing.  
108. Australia had stated in the written responses th at the GPA requirements were a substantial 
departure from commercial best practice, and hence represented a potential barrier for firms (domestic and foreign) wishing to enter the government proc urement market.  She disag reed with the comment, 
as there were minimum requirements in the GPA to en sure transparency and non-discrimination.  On 
the other hand, all GPA parties, and most WTO Me mbers, actually had a more detailed procurement 
regime than the GPA, with stricter conditions and rules.  She noted that Australia was looking closely 
at any revisions to the GPA Agreement.  
109. The representative of Japan
 noted that from the answers provided that the Minister for 
Agriculture had the power to direct the Wheat Expo rt Authority (WEA) to refuse an application for 
bulk wheat exports, while the power of AWB to veto  application for bulk wheat exports had been 
removed for a limited period.  He asked Australia to explain in which cases an application for export 
was refused by the Minister and the rationale.   
110. Japan had asked (in its written questions) for in formation about Australia's MRAs not only in 
the laboratory testing, but also in the certifica tion process.  He asked again whether Australian 
regulatory authorities could directly designate certification bodies outside Australia based on Australian legislation.   
111. Japan noted that Australia was considering revising its GATS offer to reflect the full 
privatization of Telstra, and asked whether Austra lia would consider revising the Telstra Corporation 
Act, which stipulated nationality requirements.  If  there were plans to revise the Act, he asked 
Australia to provide the outline and schedule of the revi sion.  Japan was also interested in the sort of 
reservations in the Australian schedule of commitment under the GATS corresponding to these nationality requirements.  
112. Japan raised some follow-up questions, regard ing the Australia-U.S. FTA, the investment 
policy in resources and energy sectors, and the taxa tion on transfer pricing.  Regarding Australia's 
international tax reform, a number of investors a nd importers had pointed out that the practice of 
taxation on transfer pricing adver sely affected corporations' trade a nd investment activities.  This was 
because the legislation did not c ontain any provisions on the dur ation of retroactive corrective 
measures on transfer pricing.  Hence, he asked for Australia's view on the negative effect on trade and 
investment caused by such transfer price taxation. 
113. The representative of Canada
 noted that the recommendations on the BSE import policy 
review had been under consideration by the Austra lian Government since September 2005.  He asked 
for a time line as to when a decision might be expected.  
114. The representative of Australia  stated that he could not give a precise time frame in relation to 
reviews of the BSE policy settings.  Australia had no expectation to ch ange the "nationality 
requirements" in relation to the Telstra board, but th ere would be some amendment to Australia's offer WT/TPR/M/178 
Page 22  
 
  in GATS to ensure the consistency with government po licy in the area of foreign equity restrictions.  
He recognized that when negotiating MRAs, Australia  had, in some cases, established a relationship 
involving certification bodies outside Australia.  Aust ralia took note of the question with respect to 
the current review on wheat export arrangement.  
115. In relation to China's comments about foreign inv estment, in particular the "national interest" 
test, he considered that the best response was that  the last time a business proposal for investment in 
Australia had been blocked under the "national inte rest" criteria was in 2001.  It was a very large 
investment proposal in the energy sector, where the rejection decision was based on a range of factors, including the intention of the investors to utilize the resource in a certain time frame.  On the question 
raised by Korea about the automotive support scheme, he explained that under the Subsidies 
Agreement, certain types of subsidies were  actionable in some circumstances.   
116. On the SPS issue, the representative noted that  a number of countries, including Australia, 
adopted a conservative approach to quarantine, to protect animal, plant, and human health from pest 
and diseases that were not present in these countries.  Australia exported many agricultural products, 
and restrictions and measures were applied or ad opted by other countries on Australian exports.  
Australia had been adopting a very open and transpar ent bilaterally approach with other countries so 
as to ensure a free flow of agricultural products.  He agreed that no country should adopt a zero-risk 
approach in the SPS regime, and Australia's ALOP  sought to provide a high level of SPS protection 
and reduce risks to a very low level, but not to zero.   The strict border controls adopted to ensure the 
ALOP indicated that Australia did not adopt zero-risk approach.  
117. Australia would provide written answers to th e EC's question on reduction of backlog in 
terms of quarantine requests.  It would be considerin g the status and priority of the requests received, 
would deal with them according to resources and pr iorities, and would work with other countries to 
determine high priority requests. 
118. Australia had undertaken a number of generic im port risk assessments fo r particular products 
that might be imported from a number of countries, such as pig meat, rather than one product from 
one country. 
119. With respect to the new IRA process, Australia intended to take into account the priorities and 
information provided by trading partners.  It welcom ed any further information in this regard.  Also, 
the work programme of Biosecur ity Australia would be made public once the priorities could be 
determined;  the criteria under which the priorities were determined would also be made public.   
120. In relation to FSANZ assessment procedures for the importation of generically modified 
products, FSANZ had assessed and approved quite a number of products over time.  The process 
worked quite effectively, but more detailed info rmation would be provided in Australia's written 
response to the U.S. questions.  
121. Australia undertook detailed risk assessments, but the process was very transparent with 
opportunities for Members to comment at every stage.   Comments were also welcomed on proposed 
measures to be applied as the result of any risks iden tified to be above the minimum acceptable level.  
In addition, Australia had worked with a number of countries in the Asian regi on, including China, to 
try to help them to meet its import requirement s.  One example was Australia's Fumigation and 
Accreditation Scheme:  Australia worked with fumiga tors in a number of countries in the region to 
improve their ability to meet Australia's import re quirements, and to accredit them to export products 
to Australia.   WT/TPR/M/178 
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  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
122. The fifth Trade Policy Review of Australia ha s contributed to a much better understanding of 
recent developments in Australia's trade and trad e-related policies.  I thank Mr. Langman and his 
delegation as well as the discussant, Ambassador S un Zhenyu of China, and Members of the TPRB 
for contributing to our fruitful exchange of views.  Australia's responses to the questions posed by the 
discussant as well as Members was also appreciated.   
123. Members acknowledged the high degree of transpar ency in the formulation and evaluation of 
Australia's economic policies.  Transparency has contributed to the continued process of reform, 
which in turn has contributed to Australia's str ong GDP growth over the past 15 consecutive years.  
Trade liberalization, much of it unilateral, has play ed an integral part in the reform.  Australia's 
economy is now among the most open in the world.  Australia's prudent macroeconomic policies have 
helped to strengthen the economy's resilience to extern al shocks.  Accordingly, the inflation rate has 
been kept, by and large, within the Central Bank' s targeted range.  Both the Commonwealth and the 
state governments have achieved fiscal surpluses, a nd net government debt has been eliminated.  In 
addition, unemployment has fallen to its  lowest level since the 1970s.   
124. Members welcomed Australia's active role in th e multilateral trading system, particularly its 
strong support for the Doha Development Agenda.  At  the same time, they remarked on Australia's 
increasing involvement in bilateral/regional trading a rrangements, and urged Australia to ensure that 
these arrangements are fully compatible with the multilateral trading system. 
125. Members acknowledged  Australia's low level of applied ta riff protection, and welcomed its 
unilateral reduction of tariffs for passenger motor vehi cles and textiles, clothing and footwear in 2005.  
Despite the cuts in tariffs applied to these products , their rates remain considerably higher than the 
average applied MFN rate.  Some Members enquired about plans to reduce tariff protection (and other 
assistance) to these industries.  Several Members re marked that more than 40% of Australia's bound 
rates exceeded applied MFN rates by at least five  percentage points, thereby imparting a degree of 
unpredictability to the tariff.  However, Australia ha s not raised any tariffs during the review period.  
Members also expressed their concern on tariff escal ation, which could impe de developing countries' 
industrialization. 
126. Several Members urged Australia to reassess  its position as the only major industrialized 
country that is not a signatory to the WTO Ag reement on Government Procurement.  Certain 
Members raised questions concerning protection of  intellectual property rights.  Members also 
remarked on the continued progress in competition policy and regulatory reform, especially with 
regard to infrastructure services.  
127. Several Members expressed their concern on the screening procedures for foreign direct 
investment.  They also sought clarification on Aust ralia's foreign investment regulations, particularly 
with regard to mining, which has been one of the major driving forces behind Australia's recent 
economic growth.   
128. Although agriculture accounts for a relatively sm all share of GDP, it has played a much 
bigger role in exports.  Several Members noted th at a review of the single-desk arrangement for 
exports of a few agricultural products has been  recommended under Australia's National Competition 
Policy, and urged Australia to consider elimina ting this arrangement.  On agricultural imports, 
Members pointed out the strictness of Australia's SPS requirements and voiced concern over their 
trade restrictiveness and the lengthiness of related pr ocedures;  however, they also noted steps taken 
by the authorities to improve import risk analyses. WT/TPR/M/178 
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  129. Given that services dominate Australia's economy, certain Members remark ed that Australia's 
commitments made in RTAs in some specific sectors go beyond its GATS commitments.  They also acknowledged liberalization in financial, teleco mmunications, and transportation services and sought 
clarification on plans to further liberalize these and other services. 
130. This Review has been very useful in giving Me mbers an overview of Australia's trade policies 
and practices and the challenges it faces.  I would once again like to thank the Australian delegation, 
the discussant, Members, and the Secretariat for co ntributing to a very en lightening two days of 
discussions.  We look forward to receiving Australia's outstanding responses within the next month. 
__________