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The Australia-US Free Trade Agreement (AUSFTA) has been in effect since 1 January 2005, giving Australian companies significantly improved access to the largest consumer market in the world, with around 295 million people and one-third of the globe's GDP.

What is the AUSFTA?
The AUSFTA is a comprehensive trade agreement, which addresses the key aspects of bilateral trade in goods and services, as well as bilateral investment flows, and seeks to move our two economies towards further economic integration. As such, the agreement also includes chapters on government procurement, harmonisation or mutual recognition of technical standards, customs cooperation, safeguards, electronic commerce, and protection of intellectual property rights.

The agreement delivers:

  • Liberalised market access 
  • Non-discriminatory treatment for Australian service providers
  • Enhanced investment flows
  • Access to US Government procurement

Specifically for industrial goods:

  • Over 97% of our manufactured exports to the US, worth $5.4 billion in 2003, are now duty free, including all metals and minerals.
  • Australia will be exempted from safeguard restrictions almost automatically, as a result of its preferred status as an FTA partner with the US.
  • The US will waive the Merchandise Processing Fee levied on all imports, saving Australian industry around US$10 million a year.
  • A mechanism to address non-tariff barriers will be established.
  • Australian companies can now access, for the first time, the US Federal Government procurement market, worth around $200 billion per annum.

Accessing reduced tariffs under the AUSFTA
Exporters must qualify for preferential tariffs. AUSFTA will deliver Australian exporters with unprecedented access to the US market. Among other access improvements, the US will eliminate its tariffs on Australian originating goods.

New processes to qualify for preferential tariff treatment
Reduced or zero tariffs will only be available to those companies that can prove they qualify for preferential tariff treatment, by undertaking the following steps.

STEP 1:
Ensure the products being exported meet their rule of origin test(s).

STEP 2:
Obtain and retain documentary proof of the goods' originating status.

Confirming originating status of your goods

  • In the first instance, companies should confirm whether a US tariff applies to their goods, as you may not need to access preferential tariff treatment.
  • The US Tariff Schedule shows the current tariff which will apply to Australian companies not wishing to take up AUSFTA preferences.
  • The tariff reduction commitments under AUSFTA are available 
  • Once you have found your good(s) in this schedule, you will see in the "Staging Category" column, a code, which denotes whether tariff elimination is immediate, or phased. An explanation of these codes is available here

If you wish to access preferential tariffs for your goods, the next step is to confirm whether they qualify as originating Australian goods. The DFAT publication 'A Guide to Determining the Origin of Goods under AUSFTA' will step you through this process.

Documentary evidence
Exporters are required to maintain, for up to five years after the date of export, records necessary to demonstrate that a good qualifies as an originating good. A certificate of origin is not required.  The evidence must simply show that the goods meet the rules of origin requirements of AUSFTA.

Penalties for non-compliance
If either Customs authority finds that originating status is not applicable or that there is insufficient information to justify the claim for preferential rates of duty, extra duty will be payable. Depending on the circumstances, you may also be liable for additional penalties under the relevant jurisdiction's Customs Act.

Contact Ai Group for more information by email at tradedocs@aigroup.asn.au or call 1300 55 66 77.

US Government procurement
Ai Group and Australian GSA Schedules P/L (AGSAS) are working together to promote exporting opportunities to the US Government market as a result of the AUSFTA.  AGSAS is an Australian-based firm that provides a listing service for Australian companies wanting to have their products listed on the much-coveted General Services Administration's (GSA) Schedule contracts as well as expert US government contract advisory and assistance services to companies selling into the US federal and sate government markets.

AGSAS has recently commenced publication of its monthly newsletter US Government Contracts Report that contains a range of useful and practical information for Australian exporters interested in accessing the $200 billion per year US government market.  It's Featured Articles, News You Can Use, Selling Regulations You Need to Know, and Useful Links sections are a must read for any exporter interested in penetrating this new market. Subscribe to this valuable exporting tool.



Free US Embassy services available to members

The United States Embassy in Canberra has offered to help Ai Group members engaged in the US or considering business or study there with a range of free services.

The embassy is also planning to further upgrade its services during 2009. It currently offers Ai Group members the following services:

  • Invitations to events and digital video conferences with American scholars and experts;
  • Alerts for nominations for study tours and exchanges to the United States;
  • American speakers (e.g. on U.S. society, issues such as economics, labour and employment, regulation, climate change, management, foreign policy or security);
  • Resources such as DVDs, books, background publications etc;
  • Research on any topic connected with the U.S. (both government and non government) at email usrsaustralia@state.gov or call 02 6214 5874; and
  • Regular alerts and updates on a range of topics.