ChAFTA starts as we look to the next suite of FTAs
AirCargo 240 archive stories
Saturday, 16 January 2016
As rumoured and reported, the China – Australia Free Trade Agreement (ChAFTA) came into effect on 20 December 2015 with the first tranche of liberalisation starting from that date. That also marked 2015 as ‘year 1’ for tariff reductions under ChAFTA commencing on 20 December 2015 and also locked in 1 January 2016 as the start of ‘year 2’ for the next round of tariff reductions, writes Andrew Hudson.
The commencement was welcome after an extended gestation period of negotiations and implementation work.
As is often the case, the period since release of the text of ChAFTA included pleading from industry for as much detail as possible on practical issues associated with claiming preference such as the form of Certificates of Origin (CoO), the identity of the bodies approved to issue the CoO, the process for seeking advance rulings required for Declarations of Origin (DoO) and how to deal with the consignment of goods through HK both into China and into Australia. These were all important questions to enable parties to secure the preferential tariff treatment as early as possible while reducing exposure to possible penalties that could be imposed if there had been an incorrect claim of preference.
A number of Federal Government agencies associated with the border issues worked with industry to provide the required information with varied degrees of success. Industry provided its own resources to those affected. I was involved in developing and delivering a webinar on ChAFTA issues for the CBFCA in conjunction with DFAT and the DIBP which took place on 17 December 2015. It was well attended and has been replayed a number of times by CBFCA members for their employees and is being used in conjunction with the three earlier sessions on ChAFTA I delivered for the CBFCA. Further, in conjunction with the CBFCA I responded to dozens of questions on ChAFTA in the days before it commenced. All of which emphasises that with the next suite of FTAs to come on board, there should be a greater emphasis on the co – ordinated provision of information at the earliest stage possible.
For now, the following sources will prove useful for those in industry
• DFAT also provides its “FTA portal” at https://ftaportal.dfat.gov.au which is another excellent resource enabling access to information on ChAFTA (and the other North Asia FTAs in KAFTA and JAEPA).
• The Export Council of Australia (ECA) has its own “FTA Tool” at http://ftatool.com.au/ which provides another means to secure information on ChAFTA and has another version under development. For those with interest in the operation and use of the Shanghai Free Trade Zone (SFTZ) the ECA recently released a comprehensive report on the SFTZ along with an associated app at http://www.export.org.au/products/shanghai-free-trade-zone-and-australia-full-research-report At this stage, parties wishing to use ChAFTA need to exercise caution on a number of issues Some of these issues include:
• Problems with the claim of “Wholly Originating” status for Chinese imported goods
• Ensuring that the correct seals from the Chinese authorities are on Chinese CoO
• Different treatment on consignment of “originating goods” through HK as between Australian and Chinese authorities
• The availability of “retrospective” CoO from Chinese authorities to allow a claim preference and secure a refund after goods have been imported into Australia
Answers on these issues can be found through the DFAT, DIBP and HK Customs sources identified above. It really is important to review these sources carefully as the DIBP has not signalled an intent to allow any leniency in the issue of penalties or infringement notices in claiming ChAFTA preference. This is surprising, given the provisions of ChAFTA which appear to dictate such an approach for inadvertent breaches. Still as we say, ask first and seek a ruling if there are any issues in doubt.
We now wait to see which of the proposed FTA comes “on line” next. The TPP is complete but the implementation in so many countries may take some time. From comments by the minister for Trade and Investment and DFAT late in 2015, the completion of the FTA with India is close along with the Regional Comprehensive Economic Partnership Agreement and “PACER Plus”. This will require implementation work to be undertaken urgently, in some detail and in a collaborative fashion between Government agencies and industry. I would hope that early in 2016 DFAT and the DIBP would convene a meeting with industry to map out a process so that the terms of FTAs and the necessary implementation information are co – developed and released at the earliest opportunity and well before the FTAs come into effect
ChAFTA starts as we look to the next suite of FTAs
AirCargo 240 archive stories
Saturday, 16 January 2016
As rumoured and reported, the China – Australia Free Trade Agreement (ChAFTA) came into effect on 20 December 2015 with the first tranche of liberalisation starting from that date. That also marked 2015 as ‘year 1’ for tariff reductions under ChAFTA commencing on 20 December 2015 and also locked in 1 January 2016 as the start of ‘year 2’ for the next round of tariff reductions, writes Andrew Hudson.
The commencement was welcome after an extended gestation period of negotiations and implementation work.
As is often the case, the period since release of the text of ChAFTA included pleading from industry for as much detail as possible on practical issues associated with claiming preference such as the form of Certificates of Origin (CoO), the identity of the bodies approved to issue the CoO, the process for seeking advance rulings required for Declarations of Origin (DoO) and how to deal with the consignment of goods through HK both into China and into Australia. These were all important questions to enable parties to secure the preferential tariff treatment as early as possible while reducing exposure to possible penalties that could be imposed if there had been an incorrect claim of preference.
A number of Federal Government agencies associated with the border issues worked with industry to provide the required information with varied degrees of success. Industry provided its own resources to those affected. I was involved in developing and delivering a webinar on ChAFTA issues for the CBFCA in conjunction with DFAT and the DIBP which took place on 17 December 2015. It was well attended and has been replayed a number of times by CBFCA members for their employees and is being used in conjunction with the three earlier sessions on ChAFTA I delivered for the CBFCA. Further, in conjunction with the CBFCA I responded to dozens of questions on ChAFTA in the days before it commenced. All of which emphasises that with the next suite of FTAs to come on board, there should be a greater emphasis on the co – ordinated provision of information at the earliest stage possible.
For now, the following sources will prove useful for those in industry
• DFAT also provides its “FTA portal” at https://ftaportal.dfat.gov.au which is another excellent resource enabling access to information on ChAFTA (and the other North Asia FTAs in KAFTA and JAEPA).
• The Export Council of Australia (ECA) has its own “FTA Tool” at http://ftatool.com.au/ which provides another means to secure information on ChAFTA and has another version under development. For those with interest in the operation and use of the Shanghai Free Trade Zone (SFTZ) the ECA recently released a comprehensive report on the SFTZ along with an associated app at http://www.export.org.au/products/shanghai-free-trade-zone-and-australia-full-research-report At this stage, parties wishing to use ChAFTA need to exercise caution on a number of issues Some of these issues include:
• Problems with the claim of “Wholly Originating” status for Chinese imported goods
• Ensuring that the correct seals from the Chinese authorities are on Chinese CoO
• Different treatment on consignment of “originating goods” through HK as between Australian and Chinese authorities
• The availability of “retrospective” CoO from Chinese authorities to allow a claim preference and secure a refund after goods have been imported into Australia
Answers on these issues can be found through the DFAT, DIBP and HK Customs sources identified above. It really is important to review these sources carefully as the DIBP has not signalled an intent to allow any leniency in the issue of penalties or infringement notices in claiming ChAFTA preference. This is surprising, given the provisions of ChAFTA which appear to dictate such an approach for inadvertent breaches. Still as we say, ask first and seek a ruling if there are any issues in doubt.
We now wait to see which of the proposed FTA comes “on line” next. The TPP is complete but the implementation in so many countries may take some time. From comments by the minister for Trade and Investment and DFAT late in 2015, the completion of the FTA with India is close along with the Regional Comprehensive Economic Partnership Agreement and “PACER Plus”. This will require implementation work to be undertaken urgently, in some detail and in a collaborative fashion between Government agencies and industry. I would hope that early in 2016 DFAT and the DIBP would convene a meeting with industry to map out a process so that the terms of FTAs and the necessary implementation information are co – developed and released at the earliest opportunity and well before the FTAs come into effect
A number of Federal Government agencies associated with the border issues worked with industry to provide the required information with varied degrees of success. Industry provided its own resources to those affected. I was involved in developing and delivering a webinar on ChAFTA issues for the CBFCA in conjunction with DFAT and the DIBP which took place on 17 December 2015. It was well attended and has been replayed a number of times by CBFCA members for their employees and is being used in conjunction with the three earlier sessions on ChAFTA I delivered for the CBFCA. Further, in conjunction with the CBFCA I responded to dozens of questions on ChAFTA in the days before it commenced. All of which emphasises that with the next suite of FTAs to come on board, there should be a greater emphasis on the co – ordinated provision of information at the earliest stage possible. 
