Free Trade: Australia signs 2 new trade agreements

Australia / Peru

Entered into force on 11 February 2020,Peru-Australia Free Trade Agreement (PAFTA) has advantages for international traders:

• Upon importation into Australia:
  • Immediate removal of 96% of customs duties;
  • Progressive tariff dismantling over 4 years for other products, i.e. an eventual elimination of 99.8% of customs duties;
  • Maintenance of import taxes on products subject to excise duty (certain alcohols, tobacco, fuels and petroleum products).
• On importation into Peru:
  • Total elimination of customs duties for 93.5% of products;
  • 5-year phase-out for other products to reach 99% of futures products;
  • Increased quotas for many agricultural, food products (sugar, rice, maize, etc.).

In order to qualify for preferential treatment, a Certificate of origin or Certificate of origin on commercial document.

Australia / Hong Kong

Australia-Hong Kong Agreement (A-HKFTA)entered into force on 17 January 2020.

• Upon importation into Australia:
  • Elimination of virtually all customs duties;
  • Maintenance of import duties on excise goods.
• Upon importation into Hong Kong:
  • No change in tariffs since Hong Kong does not apply.

This agreement aims more at strengthening trade, cooperation and investment.

Expert opinion

Julie BONNETON, Expert – International Trade Trainer

Two more Free Trade Agreements (FTAs) to be added to the (already) long list of bilateral trade agreements worldwide: no less than 481 regional agreements have been notified to the WTO!

Australia is a particularly active country in the area of free trade: no fewer than 13 trade agreements are currently in force, 3 will soon become in force, and 6 are still under negotiation, notably with the European Union.

As an exporter and/or importer, not easy to find: is there an agreement? What are the benefits? What rules of origin apply to my product? How to benefit from tariff preference? These are questions to be asked when developing a new export market or a new contract for sourcing (cf. Import/export: in the jungle of EU trade agreements...) …

In the framework of the PAFTA and the above A-HKFTA, operators from third countries to the Agreement must carry out Cross-trade transactions (triangular trade) to benefit from preferential import tariff conditions.

As in most agreements, the direct transport rule must be respected, i.e. the goods must be shipped directly from Australia to Peru (in one case) or Hong Kong (in the other case), and vice versa... without going through a third country, like France for example!

To go further...

• Contact our experts in global supply chain management to design and pilot your import/export and cross-trade scenarios at the start, via and/or to Australia!
• Check out our service offer dedicated to intra- and extra-Community triangular trade operations.