Mondiale Freight News

China-Australia Free Trade Agreement (ChAFTA)

Aug 01

China-Australia Free Trade Agreement (ChAFTA) – More Details

Australian Trade and Investment Minister Andrew Robb and Chinese Commerce Minister Gao Hucheng on Wednesday (17 June 2015) signed its landmark Free Trade Agreement (FTA) with China (China-Australia Free Trade Agreement (ChAFTA) ) which completes a trifecta of trade agreements with Australia’s top three export markets, China, Japan and Korea.

Key Outcomes
• more than 85 per cent of Australian goods exports will be tariff free, rising to 95 per cent on full implementation.
• Tariffs will be progressively abolished for Australia's $13 billion dairy industry
• Australia’s beef and sheep farmers will also gain from the phased abolition of tariffs ranging from 12-25% and all tariffs on Australian horticulture will be eliminated
• Tariffs will be removed on almost all Australian resources and energy products including coking coal
• Tariffs will also be eliminated on a wide range of Australian manufactured goods, including pharmaceutical products and car engines
Australian households and businesses will also benefit from the elimination of import tariffs from China including for clothing and footwear, consumer appliances and home furnishings.

Please feel free to contact us directly and we can assist with identifying your current imports ex China which may be eligible under the FTA (subject to meeting the Rules of Origin).

The Tariff Schedule contains a base rate, staging category, year 1, year 2, year 3, year 4 and year 5. Please read these are follows:

The “ Base Rate” means the starting point of elimination of customs duties.

For the purposes of implementing equal annual instalments, the following shall apply:

(a) the reduction for the first year shall take place on the date of entry into force of the FTA; and

(b) the subsequent annual reductions shall take place on 1 January of each following year.

The term “Year” means, with respect to the first year, the period from the date of entry into force of the FTA until the following 1 January and, with respect to each subsequent year, the twelve-month period which starts on 1 January of that year.

Meeting Qualification Requirements

It is not enough that your goods are exported from China; they must satisfy the rules of origin under the FTA to obtain preferential treatment. There will be different rules of origin for different goods. In this regard we refer you to Chapter 3 – Rules of Origin and Implementation Procedures also attached. Again we are here to assist and work you through the requirements on a one on one basis.

Commencement Date

We have not been provided with a start date as yet, both countries are working to complete their domestic processes to bring the FTA into force as soon as possible. We are of the view that this will happen anywhere from 3 – 6 months.
For now, we recommend you contact your suppliers for all potential Chinese originating product to confirm origin (your Chinese supplier may already have assessed Chinese content for other FTAs), determine which of your goods are currently subject to duty, review your current supply chain to take advantage of the FTA and review or amend your trading terms and conditions to ensure that the supplier has to provide a certificate of origin and assist you with claiming a customs preference.

As well as assisting you with identifying your current Chinese goods and with application of the Rules of Origin, Mondiale are also available to apply for Origin Rulings on your behalf with Australian Customs and Border Protection Service (ACBP) where ambiguity exists.
Stay tuned, further updates will be made available as more information is released.

Kind regards

Saturday, 1 August 2015

Posted: 3 years 11.5 months ago