Breaking down trade barriers with more free trade
Breaking down trade barriers with more free trade
In the face of global uncertainty surrounding tariffs and free trade, Australia and the region are steadfast in their commitment to pursue the free trade agenda by expanding, modernising, and negotiating new agreements.
Australia currently has 18 free trade agreements (FTAs) with a wide range of countries. These agreements reduce trade barriers, thereby benefiting both Australian exporters and importers. The ongoing efforts to enhance and establish new FTAs are crucial for maintaining Australia's economic resilience.
Recent updates to Australia's FTAs highlight the country's dedication to modernising trade agreements and strengthening regional partnerships.
The UK joins CPTPP
The United Kingdom’s (UK) membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) became effective for Australia on 24 December 2024.
Imported goods that originate from the UK and entered for home consumption on or after the 24 December 2024 can claim preferential rates. Most duty rates will be ‘duty-free.’ However, due to the UK’s global safeguard on certain steel products, steel duty rates will not decrease until 30 June 2026, at the earliest.
The agreement opens up opportunities for Australian businesses to leverage tariff reductions under the CPTPP and consider the restructuring of supply chains. Importantly, both exporters and importers should check whether the best duty rate outcomes arise under the CPTPP or the Australia-United Kingdom Free Trade Agreement before shipping goods. This comparison is crucial as it ensures that businesses are utilising the most advantageous trade terms available.
Australia and UAE sign trade and investment agreement
Australia and the United Arab Emirates (UAE) signed the Comprehensive Economic Partnership Agreement (Australia-UAE CEPA) on 6 November 2024.
The agreement is pending ratification and will enter into force following Australia’s domestic treaty-making process. The agreement is expected to abolish tariffs on more than 99 per cent of Australian exports to the UAE, potentially increasing exports by $678 million. The UAE is Australia’s largest trade and investment partner in the Middle East, with key exports including alumina, meat, oil seeds, and higher education.
Notably, for the first time in Australia’s history, this agreement includes a standalone chapter covering First Nations trade, offering unique market access to First Nations businesses. This chapter promotes their participation in international trade and investment by offering unique market access opportunities for First Nations businesses. The chapter also emphasises the importance of preserving and promoting traditional knowledge and cultural expressions, ensuring that First Nations people can benefit from the economic opportunities created by the agreement.
ASEAN-Australia-New Zealand Free Trade Agreement
On 10 December 2024, a bill to amend Australia’s Customs Act 1901 (Customs Act) received assent to implement new customs commitments under the Second Protocol to the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA).
Key changes to the Customs Act include:
- New record-keeping and verification requirements for exporting goods, with penalties for non-compliance
- Ensuring preferential tariff treatment applies only to goods intended by the agreement, regardless of changes to the
- A new definition of ‘Product Specific Rules’ to determine if goods transformed from a non-member state qualify for preferential treatment
- Expanded proof of origin requirements, allowing importers to use self-declaration for preferential tariff claims.
The bill also revises provisions related to the Regional Comprehensive Economic Partnership (RCEP), the Pacific Agreement on Closer Economic Relations (PACER) and the Malaysia-Australia Free Trade Agreement (MAFTA) to streamline and ensure consistency across agreements.
The new measures are purported to offer businesses improved market access and a competitive advantage. Specifically, the introduction of a self-declaration document for claiming preferential treatment streamlines the process and reduces the cost of leveraging AANZFTA.
How BDO can help
BDO’s experienced team of customs, international trade, excise, and GST specialists can provide tailored support to help businesses navigate complex regulations, ensure compliance, and minimise costs.
Our international trade specialists provide expert support in customs and excise compliance, including risk assessments, ruling applications, procedural guidance and refund opportunities.
Contact us today to explore how we can help you navigate the complexities of international trade, ensure compliance, and minimise costs.