18/11/2014

When will it commence?

The actual commencement date of the FTA will remain unknown until shortly before it comes into force, however expectations is it will be 9-12 months away.

Will it affect the particular goods you import?

While we do not have duty rates for each tariff line, we generally know that the majority of qualifying Chinese imports will be duty free.

Do your goods qualify?

Qualifying for the FTA requires more than just exporting goods from Australia or China. The rules of origin can be complex and this is one of the main reasons that FTAs are underutilised by Australian importers and exporters.

Australian importers often report that foreign suppliers (usually related parties) will not prioritise the assessment of whether goods qualify for an FTA to which Australia is a party.

To help with that discussion we recommend using past import data to estimate annual savings that could be achieved through utilising the FTA. This will often present a more compelling case than by reviewing the saving on an import by import basis.

Clearance times, not duty, is the problem

For some exporters, navigating Chinese Customs is a more significant barrier to trade than customs duties. The FTA will include a chapter on customs procedures, the effectiveness of which will depend on the attitude of the individual Chinese ports.

Our view is that mutual recognition under the proposed Trusted Trader Program is likely to have a bigger trade facilitation impact than the FTA.

Will dumping duties apply?

Dumping duties can have a far greater impact on some importers than customs duties. Unfortunately for those importers there will be no relief with the introduction of the FTA.

Almost all FTAs provide that each country can still impose dumping duties.

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