House of Representatives

Explanatory Memorandum

(Circulated by authority of the Assistant Minister for Citizenship and Multicultural Affairs, the Honourable Julian Hill MP)

GENERAL OUTLINE

The primary purpose of the Customs Amendment (ASEAN-Australia-New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Bill 2024 (the Bill) is to amend the Customs Act 1901 (the Customs Act) to give effect to the customs obligations under the Second Protocol to Amend the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (Second Protocol).

The Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (the Agreement) is a comprehensive trade agreement between ASEAN member states that delivers goods, services, investment, intellectual property, e-commerce, temporary movement of business persons, and economic cooperation. The overarching aim of the agreement is to reduce barriers to trade and investment. The Agreement has resulted in a significant increase in opportunities for Australian industry and investors.

The Agreement was entered into between Australia, Brunei Darussalam, Cambodia, Indonesia, Lao People's Democratic Republic (PDR), Malaysia, Myanmar, New Zealand, the Philippines, Singapore, Thailand and Viet Nam. AANZFTA was signed by all participating countries on 27 February 2009. The Agreement originally entered into force on 1 January 2010 and was subsequently amended by the First Protocol to Amend the ASEAN-Australia-New Zealand Free Trade Area. These amendments entered into force for Australia on 1 October 2015.

On 13 November 2022, the leaders of ASEAN, Australia and New Zealand announced the substantial conclusions of negotiations to upgrade AANZFTA First Protocol. The result of the negotiations led to Assistant Minister Tim Watts, together with ASEAN and New Zealand Ministers, signing of the Second Protocol of AANZFTA (Second Protocol) on 21 August 2023. The amendments are a result of signatories to AANZFTA recognising the need to upgrade the agreement across several areas to ensure that it retains its relevance to business and adds value to developments across other frameworks including the Regional Comprehensive Economic Partnership (RCEP) signed on 15 November 2020.

The Second Protocol, amongst other matters, set out revised customs commitments in the form of new Rules of Origin procedures under Chapter 3. The new Rules of Origin procedures under Chapter 3 include news rules for document requirements (including to whom they apply), new record keeping and verification related requirements. The new product specific rules set out rules that determine whether goods made from parties not covered by the Agreement, as amended by the Second Protocol have transformed sufficiently in accordance with the Agreement to be treated as goods covered by the Agreement.

The Bill amends the Customs Act to implement the new customs commitments under the Second Protocol. Specifically, the Customs Act is amended to:

•

insert new record keeping and verification related requirements in Part VI of the Customs Act that apply to the export of goods covered by the Second Protocol;

•

amend the definition of "Harmonized System" under Division 1G of Part VIII of the Customs Act to so that Harmonized system used for the Second Protocol and subsequent versions of the System are adopted, in accordance with the Second Protocol. This measure will ensure that the correct preferential tariff treatment in the form of reduced customs duty rate will only apply to goods intended by the Agreement as amended by the Protocol, regardless of changes to the tariff classification of the goods over time;

•

insert a new definition of "Product Specific Rules" under Division 1G of Part VIII of the Customs Act such that it refers to the new rules of the same name under the Second Protocol. This ensures that the correct rules are used for determining whether the transformation of goods from a country not covered by the Agreement as amended by the Second Protocol are sufficient for the purpose of treating the transformed goods as goods that are covered by that Agreement; and

•

expand on the documents requirements under Division 1G of Part VIII of the Customs Act so that, in additional to a Certificate of Origin document issued by an authorised body, an importer may also use a self-declaration document containing information in accordance with the Second Protocol to make a claim for preferential tariff treatment for goods covered by that Agreement.

The Bill also amends the Customs Act to revise and streamline multiple provisions concerning the Regional Comprehensive Economic Partnership Agreement (the RCEP Agreement), the Pacific Agreement on Closer Economic Relations Plus (PACER Plus) and the Malaysia-Australia Free Trade Agreement (MAFTA). Specifically, the Bill amends the Customs Act to:

•

insert new verification related requirements in Division 4L of Part VI of the Customs Act that apply to the export of goods covered by the RCEP Agreement;

•

amend the definition of "Harmonized System" under Division 1GA of Part VIII of the Customs Act to so that subsequent versions of the System are adopted in accordance with PACER Plus. This measure will ensure that the correct preferential tariff treatment in the form of reduced customs duty rate will only apply to goods intended by PACER Plus, regardless of changes to the tariff classification of the goods over time;

•

insert a new definition of "Product Specific Rules" under Division 1GA of Part VIII of the Customs Act so it can refer to subsequent version of the rules of the same name under PACER Plus. This ensures that the correct rules are always used for determining whether the transformation of goods from a country not covered by PACER Plus are sufficient for the purpose of treating the transformed goods as goods that are covered by that Agreement;

•

amend the definition of "Harmonized System" under Division 1H of Part VIII of the Customs Act to so that subsequent versions of the System are adopted in accordance with MAFTA. This measure will ensure that the correct preferential tariff treatment in the form of reduced customs duty rate will only apply to goods intended by MAFTA, regardless of changes to the tariff classification of the goods over time;

•

insert a new definition of "Product Specific Rules" under Division 1H of Part VIII of the Customs Act so it can refer to subsequent version of the rules of the same name under MAFTA. This ensures that the correct rules are always used for determining whether the transformation of goods from a country not covered by MAFTA are sufficient for the purpose of treating the transformed goods as goods that are covered by that Agreement;

•

amend the definition of "Harmonized System" under Division 1M of Part VIII of the Customs Act to so that subsequent versions of the System are adopted in accordance with the RCEP Agreement. This measure will ensure that the correct preferential tariff treatment in the form of reduced customs duty rate will only apply to goods intended by the RCEP Agreement, regardless of changes to the tariff classification of the goods over time;

•

insert a new definition of "Product Specific Rules" under Division 1M of Part VIII of the Customs Act so it can refer to subsequent version of the rules of the same name under the RCEP Agreement. This ensures that the correct rules are always used for determining whether the transformation of goods from a country not covered by the RCEP Agreement are sufficient for the purpose of treating the transformed goods as goods that are covered by that Agreement.

The amendments contained in the Bill will commence on the later of the day on which the Bill receives the Royal Assent and the day on which the Second Protocol signed on 21 August 2023 enters into force for Australia.

FINANCIAL IMPACT STATEMENT

The amendments in the Bill have no specific financial obligations.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

The Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

A statement of compatibility with human rights has been prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011, and is at Attachment A.

IMPACT ANALYSIS

An impact analysis (OBPR22-02548) in relation to the regulatory impact of the measures in the Bill is at Attachment B.

COMMON ABBREVIATIONS AND ACRONYMS

NOTES ON INDIVIDUAL CLAUSES

Clause 1 Short title

1. Clause 1 provides for the Bill, when enacted, to be cited as the Customs Amendment (ASEAN Australia New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Act 2024.

Clause 2 Commencement

2. Clause 2 sets out the point in time at which the provisions of the Bill, when enacted, will commence.

3. Subclause 2(1) provides that each provision of the Bill, when enacted, specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table, and that any other statement in column 2 has effect according to its terms.

4. Table item 1 provides that sections 1 to 3 and anything in the Bill, when enacted, not covered elsewhere by the table will commence on the day the Act receives the Royal Assent.

5. Table item 2 provides that Schedule 1 will commence on the later of the day the Bill, when enacted, receives the Royal Assent and the day the Second Protocol done on 21 August 2023 at Semarang, Indonesia enters into force for Australia. However, the provisions do not commence at all if the Second Protocol does not enter into force for Australia.

6. Table item 2 also provides that the Minister must announce the day on which the Agreement enters into force for Australia by a notifiable instrument. The announcement made in the notifiable instrument does not lead to the commencement of Schedule 1, it merely requires the Minister to announce the commencement of the Second Protocol for public awareness. This instrument is not legislative in character. This instrument is declared by the Bill to be a notifiable instrument for the purposes of the Legislation Act 2003 (Legislation Act) to ensure it is still required to be made publicly available on the Register. Notifiable instruments are governed by the Legislation Act.

7. Table item 3 provides that Schedule 2 will commence on a single day to be fixed by Proclamation. However, if the provisions do not commence within the period of 6 months beginning on the day the Bill receives the Royal Assent, they commence on the day after the end of that period.

8. The note at the foot of the table explains that the table relates only to the provisions of the Bill as originally enacted and that the table will not be amended to address any later amendments of the Bill, when enacted.

9. Subclause 2(2) provides that any information in column 3 of the table is not part of the Bill, when enacted. Information may be inserted in this column, or information in it may be edited, in any published version of the Bill, when enacted.

Clause 3 Schedules

10. This clause enables the Schedules to the Bill, when enacted, to amend or repeal provisions of legislation specified in the Schedule in accordance with the applicable items. This clause also provides that any other item in a Schedule to the Act has effect according to its terms. Schedules 1 and 2 amend the Customs Act.

SCHEDULE 1 - ASEAN-Australia-New Zealand Free Trade Area Second Protocol amendments

Part 1 - Proof of Origin

Customs Act 1901

Item 1 Subsection 153ZKB(1) (definition of Certificate of Origin )

11. This item amends subsection 153ZKB(1) of the Customs Act to repeal the definition of Certificate of Origin.

12. The amendments made by item 2 will insert a definition of Proof of Origin into section 153ZKB(1) of the Customs Act. That definitions covers Certificate of Origin and a Declaration of Origin, both by reference to the meaning as set out in Chapter 3 of the Second Protocol. Because of this the definition of Certificate of Origin under subsection 153ZKB(1) of the Customs Act is no longer required and is repealed.

Item 2 Subsection 153ZKB(1)

13. This item inserts a new definition of Proof of Origin in subsection 153ZKB(1) of the Customs Act.

14. Rule 1 of Chapter 3 to Annex 3A concerns the new document requirement required to be met under the Second Protocol in order to satisfy a requirement for the purpose of determining whether import goods are to be treated as originating goods covered by that Agreement and as such be eligible for preferential tariff treatment. Under Rule 1, any of the following shall be considered as a Proof of Origin:

(a)

a Certificate of Origin issued by an Issuing Authority/Body in accordance with this Annex;

(b)

a Declaration of Origin by an approved exporter in accordance with paragraph 1(a) of Rule 14; or

(c)

a Declaration of Origin by an exporter or producer in accordance with paragraph 1(b) of Rule 14,

based on information available that the good is originating.

15. This item implements the new document requirement by defining Proof of Origin to mean a certificate or declaration that is in force and complies with the requirements of Rule 1 of Annex 3A to Chapter 3 of the Second Protocol.

16. The purpose of this amendment is to complement the amendments made by items 3 to 5, and together give effect to Article 15 of Chapter 3 of the Second Protocol for the purpose of Article 2 of that Chapter. Article 2 of Chapter 3 set out the kind of goods that are to be treated as originating goods for preferential tariff treatment provided other requirement under that Chapter are met. For Article 2, Article 15 of Chapter 3 provides that a claim that goods are eligible for preferential tariff treatment shall be supported by a Proof of Origin, which includes Declarations of Origin in addition to Certificates or Origin. Paragraph 5 of Rule 1 sets out the format and of and the matters to be included in a Proof or Origin.

17. Under the AANZFTA, a claim that goods were originating goods could only be supported by a Certificate of Origin. A Declaration of Origin differs to a Certificate of Origin in that it may be made by the exporter of goods (self-certification), as opposed to an independently issued Certificate of Origin from an authorised issuing body.

18. For a Declaration of Origin by an approved exporter, paragraph 1(a) of Rule 14 of Annex 3A of the Second Protocol requires that the document be completed by an approved exporter within the meaning of Rule 15 of Annex 3A of the Second Protocol. For a Declaration of Origin by an exporter or producer that is not an approved exporter, paragraph 1(a) of Rule 14 requires the document to be completed by the exporter or producer of the goods.

19. Regardless of whom completes a Declaration of Origin, paragraph 2 of Rule 14 provides the format of the document.

20. Furthermore, irrespective of whether a Certificate of Origin is completed, Rule 9 of Annex 3A requires that a Proof of Origin shall specify the relevant origin conferring criteria. That is, the criteria that is satisfied to qualify the good as AANZ originating goods.

21. The amendment made by this item has the effect of incorporating the aforementioned requirements under the Second Protocol, ensuring the document requirements to be met and implemented under amendments made by items 3 to 5 are consistent with the Second Protocol.

Item 3 Subparagraphs 153ZKC(1)(b)(i) and (ii)

22. Section 153ZKC of the Customs Act sets out AANZ originating goods that are wholly obtained goods as covered by Articles 2 (paragraph 1.1), 3 and 15 of Chapter 3 of the AANZFTA. These goods are the first of the three kind of goods that are eligible for preferential tariff treatment.

23. Under the Second Protocol the document requirement that must be met, in order for goods to satisfy a requirement to be treated as originating goods covered by that Protocol for preferential tariff treatment, is expanded to enable a Certificate of Origin or an alternative Declaration of Origin document to be provided for meeting document requirements. A Certificate of Origin is a document issued by an authorised issuing body, while a Declaration of Origin is a self-declaration document made by the exporter of the goods. The two concepts are collectively referred to as Proof of Origin and are implemented through amendments made by items 1 and 2.

24. Per the notes for item 2, Article 2 of Chapter 3 of the Second Protocol set out the kind of goods that are to be treated as originating goods for preferential tariff treatment provided other requirement under that Chapter are met. Goods that are wholly obtained goods, and referred to in section 153ZKC of the Customs Act, are a kind of such goods as covered by paragraph 1(a) of Article 2 of Chapter 3.

25. This item amends both subparagraphs 153ZKC(1)(b)(i) and (ii) of the Customs Act to omit the words 'Certificate of Origin' and substitute them with 'Proof of Origin'. In doing so, these amendments give effect to Article 15 of Chapter 3 of the Second Protocol (which provides a claim that a good is an AANZ originating good shall be supported by a Proof of Origin in accordance with Annex 3A) as they apply to wholly obtained goods. This will enable importers to rely on either a Certificate of Origin or an alternative Declaration of Origin for complying with document requirements for the purpose of a claim for preferential tariff treatment in the form of reduced customs duty rates set out in the Customs Tariff Act 1995 (Customs Tariff Act) that applies to AANZ originating goods. The Second Protocol does not make any changes to applicable rates.

Item 4 Subparagraphs 153ZKD(b)(i) and (ii)

26. Section 153ZKD of the Customs Act sets out AANZ originating goods that are produced from originating materials as covered by Articles 2 (paragraph 1.3), 3 and 15 of Chapter 3 of the AANZFTA. These goods are the second of the three kind of goods that are eligible for preferential tariff treatment.

27. Per the notes for item 3, the Second Protocol has the effect that, for goods to be treated as originating goods for preferential tariff treatment under that Protocol, a Certificate of Origin or alternatively a Declaration of Origin must be produced to satisfy Proof of Origin requirements.

28. Article 2 of Chapter 3 of the Second Protocol states that goods that are to be treated as originating goods for preferential tariff treatment provided other requirement under that Chapter are met. Goods that are produced entirely in a Party from originating materials only and, and referred to in section 153ZKD of the Customs Act, are a kind of such goods as covered by paragraph 1(c) of Article 2 of Chapter 3.

29. This item replaces the words 'Certificate of Origin' with 'Proof of Origin' in subsections 153ZKD(b)(i) and (ii). This amendment is to give effect to Article 15 of Chapter 3 of the Second Protocol, that a claim that a good is an AANZ originating good shall be supported by a Proof of Origin. This will enable importers to rely on either a Certificate of Origin or alternatively a Declaration of Origin for complying with document requirements for the purpose of a claim for preferential tariff treatment in the form of reduced customs duty rates set out in the Customs Tariff Act that applies to AANZ originating goods. The Second Protocol does not make any changes to applicable rates.

Item 5 Subparagraphs 153ZKE(d)(i) and (ii)

30. Section 153ZKE sets out AANZ originating goods that are produced from non-originating materials as covered by Articles 2 (paragraph 1.2), 4, 7 and 15 of Chapter 3 of the AANZFTA. These goods are the third of the three kind of goods that are eligible for preferential tariff treatment

31. Per the notes for item 3, the Second Protocol has the effect that, for goods to be treated as originating goods for preferential tariff treatment under that Protocol, a Certificate of Origin or alternatively a Declaration of Origin must be produced to satisfy Proof of Origin requirements.

32. Article 2 of Chapter 3 of the Second Protocol outlines that goods that are to be treated as originating goods for preferential tariff treatment provided other requirement under that Chapter are met. Goods that are produced entirely in a Party from non-originating materials only or from non-originating materials and originating materials and, and referred to in section 153ZKE of the Customs Act, are a kind of such goods as covered by paragraph 1(c) of Article 2 of Chapter 3.

33. This item replaces the words 'Certificate of Origin' with 'Proof of Origin' in subsections 153ZKE(d)(i) and (ii). This amendment is to give effect to Article 15 of Chapter 3 of the Second Protocol, that a claim that a good is an AANZ originating good shall be supported by a Proof of Origin. This will enable importers to rely on either a Certificate of Origin or alternatively a Declaration of Origin for complying with document requirements for the purpose of a claim for preferential tariff treatment in the form of reduced customs duty rates set out in the Customs Tariff Act that applies to AANZ originating goods. The Second Protocol does not make any changes to applicable rates.

Item 6 Application provision

34. This item provides that the amendments made by this Part apply in relation to goods imported into Australia on or after the commencement of Part 1. The purpose and effect of this amendment is to clarify the goods that are these amendments apply.

Part 2 - Harmonized System and Product Specific Rules

Customs Act 1901

Item 7 Subsection 153ZKB(1) (paragraph (b) of the definition of Harmonized system)

35. The HS is a structured nomenclature that organises goods according to the degree of production by tariff classification. They are commonly used throughout the world to identify products when assessing duties and taxes. The HS is administered by the World Customs Organisation and updated every five years.

36. Annex 3B of the Second Protocol, the PSR, contains the tariff classification numbers under the version of HS in 2022 (HS 2022), for each product listed. From 1 January 2023, Australia is required to use an updated version of the PSR which use the nomenclature of HS 2022.

37. This item amends the definition of Harmonized System to repeal and substitute paragraph 153ZKB(1)(b). Under new paragraph 153ZKB(1)(b), if either of the following events occurs:

(i)

Annex 3B to Chapter 3 of the Second Protocol is amended or replaced to refer to Chapters, headings and subheadings of an updated version of the HS; or

(ii)

there is a transposition (as mentioned in paragraph 4 of Article 3 of Chapter 3 of the Second Protocol) of Annex 3B to Chapter 3B to Chapter 3 of the Second Protocol because of an updated version of the Harmonized Commodity Description and Coding System and that transposition is adopted as mentioned in that paragraph;

the version of the Harmonized Commodity Description and Coding System covered by whichever of those events occurred most recently.

38. The purpose of this amendment is to implement the PSR using HS 2022 nomenclature in accordance with the Second Protocol. The updated definition has the effect that subsequent versions of the HS are incorporated by reference when either Annex 3B to Chapter 3 is formally amended or as a result of a transposition, which is a process by which a parallel or separate version of the PSR because of updates to the HS.

Item 8 Subsection 153ZKB(1)

39. This item inserts a definition of 'Product-Specific Rules' into subsection 153ZKB(1). The definition of PSR as contained in Article 1 of the Second Protocol provides that they are the rules in Annex 3B that specify that the materials used to produce a good have undergone a change in tariff classification or a specific manufacturing or processing operation, or satisfy a regional value content criterion or a combination of any of these criteria.

40. Annex 2 of the AANZFTA contains the PSR's for goods for the purpose of determining whether goods produced from non-originating material qualify as AANZ originating goods. The relevant Annex, however, under the Second Protocol is Annex 3B.

41. The purpose of this amendment is to ensure that the updated Annex 3B is captured or transposition of Annex 3B that does not result in the Annex being amended or replaced, that Annex is transposed is captured. The effect of this amendment is that any amendments to the PSR as well as updates that occur through a transposition of Annex 3B are recognised.

Item 9 Paragraph 153ZKE(1)(a)

42. This item amends paragraph 153ZKE(1)(a) of the Customs Act to omit the words 'the table in Annex 2 to the Agreement' and substitute with 'the Product-Specific Rules'. This amendment is consequential to amendments made by item 8.

43. Per the notes for item 8, the PSR for the AANZFTA is contained in Annex 2. Under the Second Protocol, the PSR is contained in Annex 3B.

44. The purpose of this amendment is ensure that Annex 3B is now included in this provision, ensuring the correct PSRs are referred. In doing so, it has the effect that if any changes are made to the PSR, including those that occur through a transposition of Annex 3B, it will be captured by section 153ZKE of the Customs Act.

Item 10 Paragraph 153ZKE(1)(c)

45. This item amends paragraph 153ZKE(1)(c) of the Customs Act to omit the words 'that Annex' and substitute with 'the Product-Specific Rules'. This amendment is consequential to amendments made by item 8.

46. Per the notes for item 8, the PSR for the AANZFTA is contained in Annex 2. Under the Second Protocol, the PSR is contained in Annex 3B.

47. The purpose of this amendment is ensure that Annex 3B is now included in this provision, ensuing the correct PSRs are referred. In doing so, it has the effect that if any changes are made to the PSR, including those that occur through a transposition of Annex 3B, it will be captured by section 153ZKE of the Customs Act.

Item 11 Subsection 153ZKE(2)

48. This item amends subsection 153ZKE(2) to omit the words 'the table in Annex 2 to the Agreement' and substitute with 'the Product-Specific Rules'. This amendment is consequential to the amendments made by item 8.

49. Per the notes for item 8, the PSR for the AANZFTA is contained in Annex 2. Under the Second Protocol, the PSR is contained in Annex 3B.

50. The purpose of this amendment is ensure that Annex 3B is now included in this provision, ensuring the correct PSRs are referred to. In doing so, it has the effect that if any changes are made to the PSR, including those that occur through a transposition of Annex 3B, it will be captured by section 153ZKE of the Customs Act.

Item 12 Subsection 153ZKE(2)

51. This item amends subsection 153ZKE(2) to omit the words 'that Annex' and substitute with 'the Product-Specific Rules. This amendment is consequential to amendments made by item 8.

52. Per the notes for item 8, the PSR for the AANZFTA is contained in Annex 2. Under the Second Protocol, the PSR is contained in Annex 3B.

53. The purpose of this amendment is ensure that Annex 3B is now included in this provision, ensuring that the correct PSRs are referred. In doing so, it has the effect that if any changes are made to the PSR, including those that occur through a transposition of Annex 3B, it will be captured by section 153ZKE of the Customs Act.

Item 13 Application Provision

54. This item provides that the amendments made in this Part apply in relation to goods imported into Australia on or after the commencement of this Part. The purpose and effect of this amendment is to clarify the goods to which these amendments apply.

Part 3 - Verification and record keeping requirements

Customs Act 1901

Item 14 After Division 4E of Part VI

55. This item amends Part VI of the Customs Act to insert new Division 4EAA, which is titled 'Exportation of goods to Parties to the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area'.

56. New Division 4E contains new sections 126AKDA, 126AKDB, 126AKDC, 126AKDD, 126AKDE, 126AKDF and 126AKDG. The purpose of these provisions is impose obligations on people who export originating goods to a Party to the Second Protocol and who wish to obtain preferential treatment of customs duty in respect of those goods in accordance with that Agreement, and on people who produce such goods. These provisions give effect to Rule 25 of Annex 3A to the Second Protocol.

57. This Division also contains new sections 126AKDE, 126AKDF and 126AKDG. The purpose of these provisions is to impose obligations on approved exporters and those who wish to claim originating status of goods by completing a Declaration of Origin under preferential tariff rates covered by the Second Protocol. These provisions give effect to Rule 15 of Annex 3A to the Second Protocol.

Section 126AKDA Definitions

58. New section 126AKDA defines the term 'AANZ customs official', 'Agreement', 'approved exporter database', 'customs authority', 'Declaration of Origin', 'Party', 'producer' and 'production' for the purposes of new Division 4EAA. With the exception of 'AANZ customs official', the terms have the same meaning as defined in Division 1G of Part VIII of the Customs Act.

59. 'AANZ customs official' is defined under this section to mean a person representing the customs authority of a Party to the Agreement. The term 'customs authority' is defined to have the meaning given by Article 3 of the Chapter 4 of the Second Protocol and means any authority that is responsible under the law of each Party for the administration and enforcement of its customs laws and regulations.

60. The purpose of the new section is to define terms referred to throughout new Division 4EAA and setting out the intended meaning for those terms.

Section 126AKDB Record keeping obligations

61. New section 126AKDB inserts a head of power to prescribe record keeping obligations. Those record keeping obligations will apply in respect of goods that are exported from Australia to a Party to the Second Protocol.

62. New subsection 126AKDB(1) enables regulations to prescribe record keeping obligations that apply in relation to goods that are exported to a Party and that are claimed to be originating goods, in accordance with Annex 3A of the Second Protocol, for the purpose of obtaining preferential tariff in the Party.

63. It is intended that the method of keeping the documents, such as the length of time for which they must be kept and the manner in which they must be kept, will be similar to current record keeping obligations under the Customs Act. However, the type of documents that will be required to be kept will be much broader than current requirements. The requirements will extend to all records relating to the origin of the goods for which preferential tariff treatment is claimed and may include, amongst other things, records associated with the tariff classification of the goods and the origin or value of the materials used to produce the goods.

64. New subsection 126AKDB(2) provides that the regulations made for the purpose of subsection 126AKDB(1) may impose obligations on an exporter or producer of goods.

Section 126AKDC Power to require records

65. Under Rule 25 of the Annex 3A of the Second Protocol, the importing party may take action to verify the eligibility of goods for preferential treatment, including requesting the supply of information relating to the production or export of the goods. New section 126AKDC gives effect to this Rule by imposing a requirement on exporters and producers to produce records to authorised officers, and empowering authorised officers to disclose records AANZ custom officials.

66. Subsection 126AKDC(1) provides that an authorised officer (as defined in section 4 of the Customs Act) may require a person who is subject to record keeping obligations under regulations made for the purpose of section 126AKDB to produce to the officer such of those records as the officer requires.

67. The note to new subsection 126AKDC(1) indicates that, where an authorised officer has requested a person who is subject to record keeping obligations under regulations made for the purposes of section 126AKDB, a failure to produce documents or records by that person may be an offence under section 243SB of the Customs Act. The note also indicates that, under section 243SC of the Customs Act, a person does not have to produce a record if doing so would tend to incriminate the person.

68. New subsection 126AKDC(2) provides that an authorised officer (as defined in section 4 of the Customs Act) may disclose any records so produced to a AANZ customs official for the purpose of verifying a claim for a preferential tariff in a Party. Records obtained by an authorised officer under new section 126AKDC may be 'Immigration and Border Protection information' within the meaning of the ABF Act.

69. Section 42 of the ABF Act prohibits the disclosure of Immigration and Border Protection information except, amongst other things, where the disclosure is authorised by or under a law of the Commonwealth.

70. By including an express provision in the Customs Act to permit the disclosure of information that may be Immigration and Border Protection information to an AANZ customs official, the disclosure of such information is required or authorised by a law of the Commonwealth for the purposes of Part 6 of the ABF Act.

Section 126AKDD Power to require records

71. New subsection 126AKDD(1) provides that an authorised officer (as defined in section 4 of the Customs Act) may require a person who is an exporter or producer of goods that:

(a)

are exported to a Party; and

(b)

are claimed to be originating goods, in accordance with Chapter 3 of the Agreement, for the purpose of obtaining a preferential tariff in the Party;

to

answer questions in order to verify the origin of the goods.

72. The power to ask questions in the circumstances set out in this section is considered a necessary adjunct to the power to require records in new section 126AKDD.

73. The note to new subsection 126AKDD(1) indicates that, where an authorised officer has requested a person to answer questions in order to verify the origin of goods in accordance with this subsection, a failure to answer questions by that person may be an offence under section 243SA of the Customs Act. The note also indicates that, under section 243SC of the Customs Act, a person does not have to produce a record if doing so would tend to incriminate the person.

74. Subsection 126AKDD(2) enables an authorised officer (as defined in section 4 of the Customs Act), for the purpose of verifying a claim for a preferential tariff in a Party, to disclose any answers to questions answered in accordance with new subsection 126AKDD(1) to a AANZ customs official.

75. The answers to questions obtained by an authorised officer under new section 126AKDD may also be 'Immigration and Border Protection information' within the meaning of Part 6 of the ABF Act and therefore cannot be disclosed to an AANZ customs official except as allowed by Part 6. By including an express provision in the Customs Act allowing for this information to be disclosed to an AANZ customs official, the disclosure is required or authorised by a law of the Commonwealth for the purposes of Part 6 of the ABF Act.

Section 126AKDE Approved exporters and Declarations of Origin

76. New subsection 126AKDE(1) provides that any exporter or producer can make a Declaration of Origin under Rule 14.1(b) of the Annex 3A to Chapter 3 of the Second Protocol if the importing and exporting parties have implemented this provision within the defined period outlined in paragraph 1(c) of Rule 1. An exporter to the Second Protocol that has not implemented paragraph 1(c) of Rule 1, must not complete a Declaration of Origin for the goods unless the exporter is, under the regulations, an approved exporter.

77. New subsection 126AKDE(2) inserts a head of power to administer the approved exporter scheme including by prescribing various matters in regulations. The purpose and effect of this amendment is to implement the obligations as set out in Rule 15 of the Annex 3A to Chapter 3 of the Second Protocol.

78. New subsection 126AKDE(3) provides that the Comptroller-General of Customs may make provision for the following matters:

(a)

the making of applications to the Comptroller-General of Customs by entities for approval as approved exporters and the withdrawal of those applications;

(b)

the eligibility criteria that an entity must meet in order for the Comptroller-General to approve the entity as an approved exporter;

(c)

the matters that the Comptroller-General must consider in deciding whether to approve an entity as an approved exporter;

(d)

the making of decisions by the Comptroller-General of Customs in relation to the applications;

(e)

the conditions that an approval of an entity as an approved exporter is subject to;

(f)

the variation, suspension or termination of an approval of an entity as an approved exporter;

(g)

the giving of notice of decisions made by the Comptroller-General of Customs ;

(h)

the review of decisions made by the Comptroller-General of Customs.

79. Prescribing matters relating to the approved exporter scheme in subordinate regulations ensures flexibility and adaptability. The regulatory frameworks for the approved exporter scheme have been designed to balance stability and transparency, allow reasonable flexibility to take account of the dynamic international trade environment and ensure the continued relevance of the scheme to participants. This approach also allows the Department to more quickly update the scheme as international trade dynamics change or as compliance requirements evolve. By using prescribing details of the scheme in the regulations, the Department can implement and revise procedures efficiently, making it easier for exporter to understand and comply with the requirements.

80. The implementation of the scheme will be subject to ongoing evaluation by the Department. As the programme evolves, further opportunities to reduce the regulatory burden associated with customs procedures at the border may be identified. Prescribing these in the regulations rather than the primary legislation will provide the flexibility that is required to enable the scheme to develop.

81. As the regulations are a legislative instruments, they will be subject to parliamentary scrutiny and disallowance.

Section 126AKDF ASEAN Register of Approved Exporters

82. Rule 15.3 of Annex 3A to the Second Protocol provides that the ASEAN Secretariat shall be the custodian of the approved exporter database. Section 126AKDF implements this obligation on the Comptroller-General of Customs.

83. Subsection 126AKDF(1) provides that the Comptroller-General of Customs may maintain a register, to be known as the ASEAN Register of Approved Exporters, which is to contain information that relates to which entities have been approved under section 126AKDE, the conditions than an approved entity is subject to and the variation, suspension or termination of an entity's approval. New subsection 126AKDF(2) provides that the Register must be made publically available and subsection 126AKDF(3) outlines that the Register is not a legislative instrument.

Section 126AKDG Inclusion of information in approved exporter database

84. The rules of the approved exporter scheme are set out in Rule 15 of Annex 3A to the Second Protocol. Paragraph 15.5 requires Australia to include the following information on a database of approved exporters:

•

the legal name and address of the exporter;

•

the approved exporter authorisation code;

•

the issuance date and, if applicable, the expiry date of its approved exporter authorisation; and

•

a list of goods subject to the authorisation, at least at the HS Chapter level.

85. Paragraphs 126AKDG (a) and (b) provide that the Comptroller-General of Customs may include or disclose information (including personal information within the meaning of the Privacy Act 1988) if it is for the purpose of the information being included in the approved exporter database.

86. Paragraphs 126AKDG (c), (d) and (e) provide that the information included in the approved exporter database will be information relating to:

(c)

an entity approved as an approved exporter under regulations made for the purposes of section 126AKDE;

(d)

the conditions that an approval of an entity as an approved exporter is subject to;

(e)

the variation, suspension or termination of an approval of an entity as an approved exporter.

87. The majority of exporters that will participate in the approved exporter scheme are businesses. An exporter's legal name and address could be considered to be 'personal information' if the exporter is a sole trader or a partnership who have listed their residential address as their place of business or if the exporter's business name is similar to the individual's name.

88. To the extent that information about approved exporter will be published is 'personal information' under the Privacy Act 1988, the use of the personal information to create the register of approved exporters, and the disclosure of the register, will be lawful under the Australian Privacy Principle (APP) 6.2(b), and the disclosure to overseas recipients will be lawful under APP 8.2(c). Both apply when a use or disclosure (for APP 6) or a disclosure (for APP 8) is required or authorised by or under, relevantly, an Australian law. Here, the Australian law is proposed new section 126ADKF of the Customs Act (read together with the regulations that will be made under this section). To the extent that an entity's right to privacy is affected by the amendments, the impact is not arbitrary.

89. The amendments are reasonable, necessary and proportionate to achieving the legitimate objectives of the Scheme and will ensure proper governance and transparency of the Scheme within the Department of Home Affairs (Department).

90. Disclosing particular personal information on the public on the register is vital for Australia to meet its international obligations and non-disclosure of particular details would frustrate the objective of the scheme. A fundamental purpose of the approved exporter scheme is to allow importing countries to confirm, on an accessible register, that the exporter of another country has met the necessary conditions to self-certify the preferential origin themselves.

91. Applications for approved exporter status will be supplemented with a privacy notice listing the circumstances in which their personal information can be used, stored and disclosed. It should also be emphasized that it is an opt-in scheme and that non-disclosure methods of certifying preferential origin is also available to exporters.

92. The inclusion of this information is necessary to identify entities who are participating in the approved exporter scheme so that other parties to the Second Protocol will be able to identify approved exporters from Australia that have been approved as an entity meeting out the conditions set out in the Second Protocol. The Department will not publish information that extends beyond what is required by the proposed new provision or regulations. The Department will rely on its computer and network security, such as user passwords to protect personal information that it collects, but does not need to be disclosed under the Approved Exporter Scheme.

Item 15 Application provision

93. This item also provides that the amendment made by Part 2 applies in relation to goods exported to the Party on or after the commencement of that Part (whether the goods were produced before, on or after that commencement). The purpose and effect of this amendment is to clarify the goods to which these amendments apply.

Part 4 - Miscellaneous

Customs Act 1901

Item 16 Subsections 153ZKB(7) and (8)

94. This item repeals current subsections 153ZKB(7) and (8) of the Customs Act and substitutes them with new subsection 153ZKB(7).

95. New subsection 153ZKB(7) provides that the Minister must announce, by notifiable instrument, the day on which the Agreement, or amendment of the Agreement, enters into force for a Party other than Australia.

96. This purpose of this subsection is to modernise it and substitute it with this new provision which has the effect of overriding subsection 14(2) of the Legislation Act 2023 should be it be necessary in order to implement the Agreement by applying, adopting or incorporating an instrument or other writing that is not an Act or disallowable legislative instrument. Any instrument and other writing so incorporated will be limited to those that are required for the operation of the Agreement and will be accessible through the Department's website, and free of charge, to ensure they are readily available and at no cost to persons concerned.

Item 17 Subparagraphs 153ZKJ(1)(b)(ii) and (iii)

97. This item amends the Customs Act to repeals subparagraphs 153ZKJ(1)(b)(ii) and (iii), and substitutes them with new subparagraph 153ZKJ(1)(b)(ii). New subparagraph 153ZKJ(1)(b)(ii) provides that the goods enter into commerce or free circulation in that country or place. This is different from the previous subparagraph 153ZKJ(1)(b)(ii), which provides that the goods enter the commerce of that country or place.

98. Under paragraphs 2.2 and 2.3 of Article 14 of Chapter 3 of the AANZFTA, in order to satisfy a requirement to retain originating status for AANZ originating goods that transited through a non-Party to that Agreement:

(a)

the good has not entered the commerce of a non-Party (paragraph 2.2 of Article 14 of Chapter 3 of the AANZFTA. This requirement is implemented by subparagraph 153ZKJ(1)(b)(ii) of the Customs Act;

(b)

the transit entry must be justified for geographical, economic or logistical reasons (paragraph 2.3 of Article 14 of Chapter 3 of the AANZFTA). This requirement is implemented by subparagraph 153ZKJ(1)(b)(iii) of the Customs Act.

99. Updated Article 14 of Chapter 3 of the Second Protocol does not replicate the requirement under paragraph 2.3 of Article 14 of Chapter 3 of the AANZFTA. Furthermore, the requirement under subparagraph (b)(ii) of updated Article 14 now requires that the good has not entered into commerce or free circulation in the non-Party.

100. This amendment gives effect to changes in paragraph (b) of the updated Article 14 of Chapter 3 of the Second Protocol which now requires that in order to satisfy a requirement to retain originating status for AANZ originating goods the good must not have entered into commerce or free circulation in the non-Party.

Item 18 Application provision

101. This item provides that the amendments made by this Part apply to:

(a)

goods imported into Australia on or after the commencement of this Part; and

(b)

goods imported into Australia before the commencement of this Part, where the time for working out the rate of import duty on the goods had not occurred before the commencement of this Part.

102. The purpose and effect of this amendment is to clarify the goods to which these amendments apply.

SCHEDULE 2 - Other Amendments

Part 1 - Approved exporters for Regional Comprehensive Economic Partnership Agreement

Customs Act 1901

Item 1 Section 126AQA

103. This item amends section 126AQA of the Customs Act to insert a new definition of 'approved exporter database', which means the approved exporter database referred to in paragraph 6 of Article 3.21 of Chapter 3 of RCEP. This item also amends section 126AQA to insert a new definition of 'Declaration of Origin', which is taken to mean the Declaration of Origin referred to in paragraph 1 of Article 3.16 of Chapter 3 of RCEP Agreement.

104. The purpose of this amendment is to define terms referred to throughout Division 4L and setting out the intended meaning for those terms.

Item 2 At the end of Division 4L of Part VI

105. This item amends Part VI of the Customs Act to insert new sections 126AQE, 126AQF and 126AQG. The purpose and effect of these provisions is to impose obligations on approved exporters and those who wish to claim originating status of goods by completing a Declaration of Origin under preferential tariff rates covered by the Second Protocol.

Section 126AQE Approved exporters and Declarations of Origin

106. New subsection 126AQE(1) provides that any exporter or producer can make a Declaration of Origin under Clause 3.16.1(b) of Chapter 3 of the RCEP Agreement if the importing and exporting parties have implemented this provision within the defined period outlined in paragraphs 2 and 3 of Article 3.16. An exporter to the RCEP Agreement that has not implemented paragraph 1(b) of Article 3.18, must not complete a Declaration of Origin for the goods unless the exporter is, under the regulations, an approved exporter.

107. New subsection 126AQE(2) inserts a head of power to administer the approved exporter scheme including by prescribing various matters in regulations. The purpose of this amendment is to allow for regulations to prescribe any further requirements as to the administration of the approved exporter scheme that cannot be legislated on the face of the Customs Act.

108. New subsection 126AQE(3) provides that the Comptroller-General of Customs may make provision for the following matters:

•

the making of applications to the Comptroller-General of Customs by entities for approval as approved exporters and the withdrawal of those applications;

•

the eligibility criteria that an entity must meet in order for the Comptroller-General of Customs to approve the entity as an approved exporter;

•

the matters that the Comptroller-General of Customs must consider in deciding whether to approve an entity as an approved exporter;

•

the making of decisions by the Comptroller-General of Customs in relation to the applications;

•

the conditions that an approval of an entity as an approved exporter is subject to;

•

the variation, suspension or termination of an approval of an entity as an approved exporter;

•

the giving of notice of decisions made by the Comptroller-General of Customs;

•

the review of decisions made by the Comptroller-General of Customs.

109. Prescribing matters relating to the approved exporter scheme in subordinate regulations ensures flexibility and adaptability. The regulatory frameworks for the approved exporter scheme have been designed to balance stability and transparency, allow reasonable flexibility to take account of the dynamic international trade environment and ensure the continued relevance of the scheme to participants. This approach also allows the Department to more quickly update the scheme as international trade dynamics change or as compliance requirements evolve. By using prescribing details of the scheme in the regulations, the Department can implement and revise procedures efficiently, making it easier for exporter to understand and comply with the requirements.

110. The implementation of the scheme will be subject to ongoing evaluation by the Department. As the programme evolves, further opportunities to reduce the regulatory burden associated with customs procedures at the border may be identified. Prescribing these in the regulations rather than the primary legislation will provide the flexibility that is required to enable the scheme to develop.

111. As the regulations are a legislative instruments, they will be subject to parliamentary scrutiny and disallowance.

Section 126AQF RCEP Register of Approved Exporters

112. Article 3.21 to the RCEP Agreement provides that the RCEP Joint Committee may designate the custodian of the approved exporter database. Section 126AKDF implements this obligation on the Comptroller-General of Customs.

113. Subsection 126AQF(1) provides that the Comptroller-General of Customs may maintain a register, to be known as the RCEP Register of Approved Exporters, which is to contain information that relates to which entities have been approved under section 126AKDE, the conditions than an approved entity is subject to and the variation, suspension or termination of an entity's approval. New subsection 126AQF(2) provides that the Register must be made publically available and subsection 126AQF(3) outlines that the Register is not a legislative instrument.

Section 126AQG Inclusion of information in approved exporter database

114. The rules of the approved exporter scheme are set out in Article 3.21 of Chapter 3 of RCEP Agreement. Article 3.21 requires Australia to include the following information on a database of approved exporters:

•

the legal name and address of the exporter;

•

the approved exporter authorisation code;

•

the issuance date and, if applicable, the expiry date of its approved exporter authorisation; and

•

a list of goods subject to the authorisation, at least at the HS Chapter level.

115. Paragraphs 126AQG (a) and (b) provides that the Comptroller-General of Customs may include or disclose information (including personal information within the meaning of the Privacy Act 1988) if it is for the purpose of the information being included in the approved exporter database.

116. Paragraphs 126AQG (c), (d) and (e) provide that the information included in the approved exporter database will be information relating to:

•

an entity approved as an approved exporter under regulations made for the purposes of section 126AQE;

•

the conditions that an approval of an entity as an approved exporter is subject to;

•

the variation, suspension or termination of an approval of an entity as an approved exporter.

117. The majority of exporters that will participate in the approved exporter scheme are businesses. An exporter's legal name and address could be considered to be 'personal information' if the exporter is a sole trader or a partnership who have listed their residential address as their place of business or if the exporter's business name is similar to the individual's name.

118. To the extent that information about approved exporter will be published is 'personal information' under the Privacy Act 1988, the use of the personal information to create the register of approved exporters, and the disclosure of the register, will be lawful under the Australian Privacy Principle (APP) 6.2(b), and the disclosure to overseas recipients will be lawful under APP 8.2(c). Both apply when a use or disclosure (for APP 6) or a disclosure (for APP 8) is required or authorised by or under, relevantly, an Australian law. Here, the Australian law is proposed new section 126AQF of the Customs Act (read together with the regulations that will be made under this section). To the extent that an entity's right to privacy is affected by the amendments, the impact is not arbitrary.

119. The amendments are reasonable, necessary and proportionate to achieving the legitimate objectives of the Scheme and will ensure proper governance and transparency of the Scheme within the Department of Home Affairs (Department).

120. Disclosing particular personal information on the public on the register is vital for Australia to meet its international obligations and non-disclosure of particular details would frustrate the objective of the scheme. A fundamental purpose of the approved exporter scheme is to allow importing countries to confirm, on an accessible register, that the exporter of another country has met the necessary conditions to self-certify the preferential origin themselves.

121. Applications for approved exporter status will be supplemented with a privacy notice listing the circumstances in which their personal information can be used, stored and disclosed. It should also be emphasised that it is an opt-in scheme and that non-disclosure methods of certifying preferential origin is also available to exporters.

122. The inclusion of this information is necessary to identify entities who are participating in the approved exporter scheme so that other parties to the RCEP Agreement will be able to identify approved exporters from Australia that have been approved as an entity meeting out the conditions set out in the RCEP Agreement. The Department will not publish information that extends beyond what is required by the proposed new provision or regulations. The Department will rely on existing computer and network security, such as user passwords, to protect personal information that it collects, but does not need to be disclosed under the Approved Exporter Scheme.

Part 2 - Harmonized System and Product Specific Rules

Customs Act 1901

Item 3 Subsection 153ZKL(1) (paragraph (b) of the definition of the Harmonized System)

123. The HS is a structured nomenclature that organises goods according to the degree of production by tariff classification. They are commonly used throughout the world to identify products when assessing duties and taxes. The HS is administered by the World Customs Organisation and updated every five years.

124. Annex 3-B of the PACER Plus, the PSR, contains the tariff classification numbers under the HS 2022, for each product listed. From 1 January 2023, Australia is required to use an updated version of the PSR which use the nomenclature of HS 2022.

125. This item amends the definition of Harmonized System to repeal and substitute paragraph 153ZKL(1)(b). Under new paragraph 153ZKL(1)(b), if either of the following events occurs:

i.

Annex 3-B to Chapter 3 of the PACER Plus is amended or replaced to refer to Chapters, headings and subheadings of an updated version of the HS; or

ii.

there is a transposition (as mentioned in paragraph 1 of Article 29 of Chapter 3 of the PACER Plus) to Annex 3-B to Chapter 3 of the PACER Plus because of an updated version of the Harmonized Commodity Description and Coding System and that transposition is adopted as mentioned in that paragraph;

the version of the Harmonized Commodity Description and Coding System covered by whichever of those events occurred most recently.

126. The purpose of this amendment is to implement the PSR using HS 2022 nomenclature in accordance with PACER Plus. The updated definition has the effect that subsequent versions of the HS are incorporated by reference when either Annex 3-B to Chapter 3 is formally amended or as a result of a transposition, which is a process by which a parallel or separate version of the PSR because of updates to the HS.

Item 4 Subsection 153ZKL(1)

127. This item inserts a definition of 'Product-Specific Rules' into subsection 153ZKL(1). The definition of PSR as contained in Article 1 of the PACER Plus provides that they are the rules set out in Annex 3-B.

128. The purpose of this amendment is to ensure that if a transposition of Annex 3-B that does not result in the Annex being amended or replaced, that Annex is transposed is captured. The effect of this amendment is that any amendments to the PSR as well as updates that occur through a transposition of Annex 3-B are recognised in section 153ZKL.

Item 5 Paragraph 153ZKO(1)(a)

129. This item amends paragraph 153ZO(1)(a) of the Customs Act to omit the words 'the table in Annex 3-B to Chapter 3 of the Agreement' and substitute with 'the Product-Specific Rules'. The amendment is consequential to amendments made by item 4.

130. Per the notes for item 4, the PSR for the MAFTA is contained in Annex 3-B.

131. The purpose and effect of this amendment is to ensure that if any changes are made to the PSR, including those that occur through a transposition of Annex 3-B, it will be captured by section 153ZKO of the Customs Act.

Item 6 Paragraph 153ZKO(1)(c)

132. This item amends paragraph 153ZKO(1)(c) of the Customs Act to omit the words 'that Annex' and substitute with 'the Product-Specific Rules'. This amendment is consequential to amendments made by item 4.

133. Per the notes for item 4, the PSR for the MAFTA is contained in Annex 3-B.

134. The purpose and effect of this amendment is to ensure that if any changes are made to the PSR, including those that occur through a transposition of Annex 3-B, it will be captured by section 153ZKO of the Customs Act.

Item 7 Paragraph 153ZKO(2)

135. This item amends subsection 153ZKO(2) of the Customs Act to omit the words 'the table in Annex 3-B to Chapter 3 of the Agreement' and substitute with 'the Product-Specific Rules'. This amendment is consequential to the amendments made by item 4.

136. Per the notes for item 4, the PSR for the MAFTA is contained in Annex 3-B.

137. The purpose and effect of this amendment is to ensure that if any changes are made to the PSR, including those that occur through a transposition of Annex 3-B, it will be captured by section 153ZKO of the Customs Act.

Item 8 Paragraph 153ZKO(2)

138. This item amends subsection 153ZKO(2) of the Customs Act to omit the words 'that Annex' and substitute with 'the Product-Specific Rules'. This amendment is consequential to items 5 to 7. The purpose and effect of this amendment is to ensure that if any changes are made to the PSR, including those that occur through a transposition of Annex 3-B, it will be captured by section 153ZKO.

Item 9 Subsection 153ZLB(1) (paragraph (b) of the definition of the Harmonized System)

139. The HS Codes is a structured nomenclature that organises goods according to the degree of production by tariff classification. They are commonly used throughout the world to identify products when assessing duties and taxes. The HS is administered by the World Customs Organisation and updated every five years.

140. Annex 2 of the Malaysia-Australia Free Trade Agreement (MAFTA), the PSR contains the tariff classification numbers under the HS 2022, for each product listed. From 1 January 2023, Australia is required to use an updated version of the PSR which use the nomenclature of HS 2022.

141. This item amends the definition of Harmonized System to repeal and substitute paragraph 153ZLB(1)(b). Under new paragraph 153ZLB(1)(b) substitutes the definition of HS to ensure that if either of the following events occurs:

i.

Annex 2 of the Agreement is amended or replaced to refer to Chapters, headings and subheadings of an updated version of the HS; or

ii.

there is a transposition (as mentioned in paragraph 2 of Article 3.24 of Chapter 3 of the Agreement) to Annex 2 of the Agreement because of an updated version of the Harmonized Commodity Description and Coding System and that transposition is adopted as mentioned in that paragraph;

the version of the Harmonized Commodity Description and Coding System covered by whichever of those events occurred most recently.

142. The purpose of this amendment is to implement the PSR using HS 2022 nomenclature. The updated definition subsequent versions of the HS are incorporated by reference when either Annex 2 is formally amended or as a result of a transposition, which is a process by which a parallel or separate version of the PSR because of updates to the HS.

Item 10 Subsection 153ZLB(1)

143. This item inserts a definition of 'Product-Specific Rules' into subsection 153ZLB(1).

144. Annex 2 of MAFTA contains the PSR's for goods for the purposes of containing whether goods produced from non-originating material qualify as AANZ originating goods.

145. The purpose of this amendment is to ensure that if a transposition of Annex 2 that does not result in the Annex being amended or replaced, that Annex is transposed. The effect is that any amendments to the PSR as well as updates that occur through a transposition of Annex 2 are recognised in section 153ZLB.

Item 11 Paragraph 153ZLE(1)(a)

146. This item amends paragraph 153ZLE(1)(a) of the Customs Act to omit the words 'they are classified to a Chapter, heading or subheading of the Harmonized System that is covered by the table in Annex 2 of the Agreement' and substitute with 'the Product-Specific Rules'. The amendment is consequential to amendments made by item 10.

147. Per the notes for item 10, the PSR for the MAFTA is contained in Annex 2.

148. The purpose and effect of this amendment is to ensure that if any changes are made to the PSR, including those that occur through a transposition of Annex 2, it will be captured by section 153ZLE of the Customs Act.

Item 12 Paragraph 153ZLE(1)(c)

149. This item amends paragraph 153ZLE(1)(c) of the Customs Act to omit the words 'that Annex' and substitute with 'the Product-Specific Rules'. This amendment is consequential to amendments made by item 10.

150. Per the notes for item 10, the PSR for the MAFTA is contained in Annex 2.

151. The purpose and effect of this amendment is to ensure that if any changes are made to the PSR, including those that occur through a transposition of Annex 32, it will be captured by section 153ZLE of the Customs Act.

Item 13 Subsection 153ZLE(2)

152. This item amends subsection 153ZKLE(2) of the Customs Act to omit the words 'the table in Annex 2 to the Agreement' and substitute with 'the Product-Specific Rules'. This amendment is consequential to amendments made by item 10.

153. Per the notes for item 10, the PSR for the MAFTA is contained in Annex 2.

154. The purpose and effect of this amendment is to ensure that if any changes are made to the PSR, including those that occur through a transposition of Annex 2, it will be captured by section 153ZLE of the Customs Act.

Item 14 Subsection 153ZKLE(2)

155. This item amends subsection 153ZKLE(2) of the Customs Act to omit the words 'that Annex' and substitute with 'the Product-Specific Rules'. This amendment is consequential to amendments made by item 10.

156. Per the notes for item 10, the PSR for the MAFTA is contained in Annex 2.

157. The purpose and effect of this amendment is to ensure that if any changes are made to the PSR, including those that occur through a transposition of Annex 2, it will be captured by section 153ZLE of the Customs Act.

Item 15 Subsection 153ZQB(1) (paragraph (b) of the definition of the Harmonized System)

158. The HS Codes is a structured nomenclature that organises goods according to the degree of production by tariff classification. They are commonly used throughout the world to identify products when assessing duties and taxes. The HS is administered by the World Customs Organisation and updated every five years.

159. Annex 3A to Chapter 3 of RCEP, the Product Specific Rules (PSR), contains the tariff classification numbers under the HS 2022, for each product listed. From 1 January 2023, Australia is required to use an updated version of the PSR which use the nomenclature of HS 2022.

160. This item amends the definition of Harmonized System to repeal and substitute paragraph 153ZQB(1)(b). Under 153ZQB(1)(b) substitutes the definition of HS to ensure that if either of the following events occurs:

i.

Annex 3A to Chapter 3 of the Agreement is amended or replaced to refer to Chapters, headings and subheadings of an updated version of the HS; or

ii.

there is a transposition (as mentioned in Article 3.34 of Chapter 3 of the Agreement) to Annex 3A to Chapter 3 of the Agreement because of an updated version of the Harmonized Commodity Description and Coding System and that transposition is adopted as mentioned in that paragraph;

the version of the Harmonized Commodity Description and Coding System covered by whichever of those events occurred most recently.

161. The purpose of this amendment is to implement the PSR using HS 2022 nomenclature. The updated definition subsequent versions of the HS are incorporated by reference when either Annex 3A is formally amended or as a result of a transposition, which is a process by which a parallel or separate version of the PSR because of updates to the HS.

Item 16 Subsection 153ZQB(1)

162. This item inserts a definition of 'Product-Specific Rules' into subsection 153ZQB(1).

163. Annex 3A to Chapter 3 of RCEP contains the PSR's for goods for the purposes of containing whether goods produced from non-originating material qualify as AANZ originating goods.

164. The purpose of this amendment is to ensure that if a transposition of Annex 3B that does not result in the Annex being amended or replaced, that Annex is transpose is captured. The effect is that any amendments to the PSR as well as updates that occur through a transposition of Annex 3A are recognised.

Item 17 Paragraph 153ZQE(1)(a)

165. This item amends paragraph 153ZQE(1)(a) of the Customs Act to omit the words 'the table in Annex 3A to Chapter 3 of the Agreement' and substitute with 'the Product-Specific Rules'. The amendment is consequential to amendments made by item 16.

166. Per the notes for item 16, the PSR for RCEP is contained in Annex 3A.

167. The purpose and effect of this amendment is to ensure that if any changes are made to the PSR, including those that occur through a transposition of Annex 3A, it will be captured by section 153ZQE of the Customs Act.

Item 18 Paragraph 153ZQE(1)(c)

168. This item amends paragraph 153ZQE(1)(a) of the Customs Act to omit the words 'that Annex' and substitute with 'the Product-Specific Rules'. The amendment is consequential to amendments made by item 16.

169. Per the notes for item 16, the PSR for RCEP is contained in Annex 3A.

170. The purpose and effect of this amendment is to ensure that if any changes are made to the PSR, including those that occur through a transposition of Annex 3A, it will be captured by section 153ZQE of the Customs Act.

Item 19 Subsection 153ZQE(2)

171. This item amends subsection 153ZQE(2) of the Customs Act to omit the words 'the table in Annex 3A to Chapter 3 of the Agreement' and substitute with 'the Product-Specific Rules'. The amendment is consequential to amendments made by item 16.

172. Per the notes for item 16, the PSR for RCEP is contained in Annex 3A.

173. The purpose and effect of this amendment is to ensure that if any changes are made to the PSR, including those that occur through a transposition of Annex 3A, it will be captured by section 153ZQE of the Customs Act.

Item 20 Subsection 153ZQE(2)

174. This item amends subsection 153ZQE(2) of the Customs Act to omit the words 'that Annex' and substitute with 'the Product-Specific Rules'. The amendment is consequential to amendments made by item 16.

175. Per the notes for item 16, the PSR for RCEP is contained in Annex 3A.

176. The purpose and effect of this amendment is to ensure that if any changes are made to the PSR, including those that occur through a transposition of Annex 3A, it will be captured by section 153ZQE of the Act.

Item 21 Application provision

177. This item provides that the amendments made by this Part apply in relation to goods imported into Australia on or after the commencement of Part 1. The purpose and effect of this amendment is to clarify the goods to which these amendments apply.

Attachment A Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Customs Amendment (ASEAN-Australia-New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Bill 2024

The Customs Amendment (ASEAN-Australia-New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Bill 2024 (the Bill) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in the definition of human rights in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Bill

The purpose of the Bill is to amend the Customs Act 1901 (Customs Act) to give effect to the customs obligations arising under the Second Protocol to Amend the Agreement establishing the ASEAN-Australia-New Zealand Free Trade Area (the Second Protocol).

In particular, the Bill will:

•

replace the definition of Certificate of Origin with Proof of Origin under the Second Protocol to allow for a second type of document of origin, a Declaration of Origin, to be produced by approved exporters; and

•

insert verification and record keeping requirements for the exportation of goods to Parties to the Agreement establishing the ASEAN-Australia-New Zealand Free Trade Area (the Agreement) where those goods are claimed to be originating under the Second Protocol.

The Bill provides for the creation of an approved exporter scheme under the Second Protocol and Regional Comprehensive Economic Partnership Agreement (RCEP). The approved exporter scheme allows approved exporters to complete Declarations of Origin in order for importers to claim preferential rates of customs duty under the respective free trade agreements.

The ability for approved exporters to make a Declaration of Origin will streamline the process for Australian exporters who opt into the system and will reduce both time and financial costs related to obtaining Certificates of Origin from third party issuing bodies.

The approved exporter scheme provides administrative benefits to that entity if:

•

the entity nominates itself to participate in the approved exporter scheme; and

•

the Comptroller-General of Customs is satisfied that the entity has satisfied the qualification criteria set out in the Customs (ASEAN-Australia-New Zealand Rules of Origin) Regulations 2009 and the Customs (Regional Comprehensive Economic Partnership Rules of Origin) Regulations 2021 (the regulations).

The approved exporter scheme allows the Comptroller-General of Customs to:

•

approve an entity as an approved exporter subject to conditions prescribed by the regulations;

•

vary, suspend or terminate the approved exporter's status if he or she reasonably believes that the entity has not complied, or is not complying, with any condition prescribed by the regulations or any term or condition specified when granting approved exporter status;

•

not grant an applicant approved exporter status;

•

maintain a public register containing information of a kind prescribed by the regulations in relation to the status of an approved exporter; and

•

prescribe regulations, by legislative instrument, for and in relation to the operation of the approved exporter scheme.

Decisions to vary, suspend, terminate or not grant approved exporter status will be reviewable under by Administrative Review Tribunal (ART).

The Bill also amends the definition of Harmonized System and related provisions for several free trade agreements including the Second Protocol, RCEP, Pacific Agreement on Closer Economic Relations Plus and Malaysia-Australia Free Trade Agreement to ensure that subsequent versions of the Harmonized Commodity Description and Coding System (HS) are incorporated by reference from time to time in the Customs Act.

Human rights implications

This Bill engages:

•

the right to a fair and public hearing, including the preservation of the privilege against self-incrimination under Article 14 of the International Covenant on Civil and Political Rights (ICCPR); and

•

the right to privacy under Article 17 of the ICCPR.

Right to Privacy

Article 17 of the ICCPR prohibits unlawful or arbitrary interferences with a person's privacy. It also prohibits unlawful attacks on a person's honour or reputation. It provides that persons have the right to protection of the law against such interference or attacks. An interference with privacy will not be arbitrary if it is authorised by law or consistent with the provisions, aims and objectives of the ICCPR and reasonable in the circumstances. Reasonableness, in this context, incorporates notions of proportionality, appropriateness and necessity. In essence, this will require that limitations:

•

serve a legitimate objective

•

adopt a means that is rationally connected to that objective and

•

the means adopted are not more restrictive than they need to be to achieve that objective.

A number of amendments in the Bill engage the right to privacy contained in Article 17 of the ICCPR because they require the collection, use and disclosure of commercial and personal information.

Nomination

Under the Bill, the Comptroller-General of Customs may grant approved exporter status if, amongst other things, the entity nominates itself to participate in the scheme. Participation in the scheme is voluntary and will require the entity to disclose information to the Comptroller-General of Customs as part of its nomination.

A nomination made by an entity must be in writing. The nomination will require the entity seeking to participate in the scheme to disclose information that may be personal information. This information will be limited to information identifying the exporter, such as their legal or trading name and business address, and information required to assess the suitability of an exporter for the approved exporter scheme, such as the exporter's prior compliance with the scheme. The collection, use and disclosure of this information will be done in accordance with the Privacy Act 1988 and the Australian Privacy Principles.

Applications for approved exporter status will be supplemented with a privacy notice listing the circumstances in which their personal information can be used, stored and disclosed. It should also be emphasised that it is an opt-in scheme and that non-disclosure methods of certifying preferential origin is also available to exporters.

As part of this nomination an entity will be required to consent to their personal information being collected and disclosed either to the other Parties to the respective agreement or through a public register established. Failure to consent to such sharing will mean they not meet the requirements of the respective agreements. The collection and disclosure of this information will allow the Parties to verify compliance with the approved exporter scheme which then entitles them to preferential rates of customs duty in the importing country.

In most cases entities applying for approved exporter status will be corporations. However, in instances in which the entity is an individual, the right privacy will be engaged in relation to the requirement to provide personal information and consent to its disclosure.

To the extent that an entity is an individual and their name is disclosed to parties to the agreement or through the public register, the right to privacy will be limited. This measure is aimed at the legitimate objective of implementing international obligations that aim to simplify and improve the rules of origin requirements. The scheme makes it easier and less costly for businesses to access the benefits under the Agreement and RCEP. Adopting this measure is rationally connected to that objective because it establishes a scheme to ensure that only exporters who have demonstrated their capacity to comply with origin requirements under the agreements are able to self-certify the originating status of their goods. The limitations this self-nomination mechanism will have on the right to privacy are reasonable, necessary and proportionate to because it is a voluntary to opt into the scheme and there is an alternative mechanism for individuals to obtain certification of the originating status of their goods should they choose not to participate.

Public Register of Approved Exporters

Amendments in the Bill allow the Comptroller-General of Customs to publish and maintain a public register containing certain information on approved exporters. This engages the right to privacy, because the public register may contain information such as:

•

the legal name and address of the exporter

•

the approved exporter authorisation code

•

the issuance date and, if applicable, the expiry date of its approved exporter authorisation and

•

a list of goods subject to the authorisation, at least at the HS Chapter level.

Disclosure of this information is necessary to ensure transparency of the scheme and is set out in Paragraph 15.5 of Annex 3A - Operational certification procedures and Paragraph 3.21.4 of RCEP. It will identify the entities who are participating the scheme so that other parties to the Agreement and RCEP will be able to identify approved exporters from Australia that have been approved as an entity meeting the conditions set out in the Agreement or RCEP.

In most cases entities applying for approved exporter status will be corporations. However, in instances in which the entity is an individual, the right to privacy will be engaged by personal information being published and maintained on the public register.

To the extent that an entity is an individual and their name is disclosed to parties to the agreement or through the public register, the right to privacy will be limited. This measure is aimed at the legitimate objective of implementing international obligations that aim to simplify and improve the rules of origin requirements. The scheme makes it easier and less costly for businesses to access the benefits under the Agreement and RCEP. Adopting this measure, particularly the public register of approved exporters, is rationally connected to that objective because it sets up a scheme to allow importing parties to the agreements to access the register to determine whether an importer has met the necessary conditions to be an approved exporter in Australia. Providing sufficient personal information on a public database is also necessary for an importing country to assess whether the importer has met the necessary conditions to access preferential rates for their goods. Only personal information that is necessary under the agreements will be made publically available on the register. The privacy notice provided to applicants during the application process will advise applicants what particular information will be made public on the register.

The limitations this Public Register of Approved Exporters will have on the right to privacy is reasonable, necessary and proportionate because it will ensure proper governance and transparency of the scheme. Disclosing particular personal information on the public register is vital for Australia to meet its international obligations and non-disclosure of particular details would result in Australia being non-compliant with its international obligations. A fundamental purpose of the approved exporter scheme is to allow importing countries to confirm, on an accessible register, that the exporter of another country has met the necessary conditions to self-certify the preferential origin themselves.

Finally, the amendments do not limit the obligations of the Department under the Privacy Act 1988 and the Australian Privacy Principles. The Department will adhere to the safeguards in the Privacy Act 1988 and Australian Privacy Principles to ensure no unlawful interference with privacy occurs.

Right to a Fair and Public Hearing

Article 14(1) of the ICCPR provides the right a fair and public hearing in civil proceedings as one of the guarantees in relation to legal proceedings. The right to a fair hearing provides that all persons are equal before courts and tribunals and guarantees a fair and public hearing before a competent, independent and impartial court or tribunal established by law.

In most cases entities applying for approved exporter status will be corporations. However, in instances in which the entity is an individual, the right to equality and non-discrimination will be engaged in relation to a decision of the Comptroller-General of Customs under the approved exporter scheme.

The Bill promotes this right because it provides for external merits review of the certain decisions by the Comptroller-General of Customs under the scheme. These include:

•

a decision of the Comptroller-General of Customs to refuse to grant approved exporter status; and

•

a decision of the Comptroller-General of Customs to vary, suspend or terminate the approved exporter status.

This supports the right to a fair hearing as entities may apply to the Administrative Review Tribunal to seek an independent review of certain decisions made by the Comptroller-General of Customs. An internal review mechanism will be available for entities to seek an initial review of these decisions.

Preservation of the privilege against self-incrimination

Article 14.3(g) of the ICCPR sets out that "Everyone shall be entitled to the following minimum guarantees, in full equality... ...not to be compelled to testify against himself or to confess guilt".

In most cases entities applying for approved exporter status will be corporations. However, in instances in which the entity is an individual, the right to equality and non-discrimination will be engaged in relation to a decision of the Comptroller-General of Customs under the approved exporter scheme.

New sections 126AKDC and 126AKDD of the Customs Act will provide that an authorised officer may require a person:

•

who is subject to record keeping obligations under regulations made for the purposes of section 126AKDB to produce to the officer such of those records as the officer requires, and

•

who is an exporter or producer of goods that are exported to a Party and claimed to be originating goods, in accordance with Chapter 3 of the Second Protocol, for the purpose of obtaining a preferential tariff in the Party to answer questions in order to verify the origin of the goods.

Sections 243SA (Failure to Answer Questions) and 243SB (Failure to produce documents or records) of the Customs Act are strict liability offences and subject to a penalty of 30 penalty units.

Section 243SC (Preservation of the privilege against self-incrimination) of the Customs Act provides that where a person would be required:

a.

to answer a question under section 243SA of the Customs Act or

b.

produce a document or record under section 243SB of the Customs Act

That person need not comply with the requirement if complying would tend to incriminate the person; or result in further attempts to obtain evidence that would tend to incriminate the person.

That is, the Custom Act provides protections for the preservation of the privilege against self-incrimination and this new measure does not limit these protections.

Conclusion

The Bill is compatible with human rights because it promotes the right to a fair and public hearing including the preservation of the privilege against self-incrimination and to the extent that it limits the right to privacy, those limitations are reasonable, necessary and proportionate in achieving a legitimate objective.

Signing of the Second Protocol to Amend the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area

Impact Analysis

Introduction

Signing the Second Protocol to Amend the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area

In accordance with the Australian Government Guide to Policy Impact Analysis, the Department of Foreign Affairs and Trade (DFAT) has completed this Impact Analysis (IA) to analyse the impact of the decision to sign the Second Protocol to Amend the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA Amendment).

The Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) entered into force in January 2010 for Australia. It is a regional free trade agreement (FTA), with the ten ASEAN Member States (Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam), Australia and New Zealand. The Agreement has provisions for regular reviews to improve its implementation and ensure it remains a high quality, ambitious, and contemporary FTA.

In 2016, the Parties commenced a General Review of AANZFTA, in line with Article 9 of Chapter 18 of the Agreement, with the aim of removing impediments to trade and to further increase trade and investment between the Parties.

In 2018, AANZFTA Ministers endorsed recommendations from the General Review, agreeing to start upgrade negotiations. These negotiations were formally launched in late 2020, with negotiation rounds starting from 2021. Ministers involved in the negotiations substantially concluded negotiations to the upgraded AANZFTA on November 13, 2022, at the 40th and 41st ASEAN Summit in Phnom Penh, Cambodia.

Negotiations on the AANZFTA Amendment were finalised in June 2023. The 2023 ASEAN Chair, Indonesia, alongside other ASEAN member states, intends the AANZFTA Amendment to be signed in the margins of the ASEAN Economic Ministers' Meetings in Semarang, Indonesia, between 20-22 August 2023. This is a Priority Economic Deliverable for Indonesia as 2023 ASEAN Chair, highlighting Indonesia's commitment to these timeframes.

Australia has a strong relationship with ASEAN states. Australia is ASEAN's first dialogue partner and in 2024, Australia will celebrate 50 years of dialogue partnership, including with a proposed Special Commemorative Summit. In 2021, our relationship was elevated to a Comprehensive Strategic Partnership (CSP). The CSP highlighted regional priorities, including the development of high-quality digital trade standards and the Regional Trade for Development (RT4D) initiative, in which Australia will contribute AUD46 million to support the implementation of both RCEP and AANZFTA through economic cooperation programs to maximise the benefits of these agreements. Ensuring that AANZFTA is a high-quality, contemporary agreement is essential to enable delivery of these key priorities.

Prime Minister Anthony Albanese has commented directly on the value of AANZFTA Amendment, by saying: 'Strengthening trade agreements with ASEAN and New Zealand will mean better outcomes for Australian business and Australian families.' The Minister for Trade and Tourism, Senator Don Farrell, said: 'By upgrading AANZFTA, we hope to create new commercial opportunities for Australians, our exporters and investors to work hand-in-hand with ASEAN. This would cement Australia as a partner of choice in an open and inclusive region.'

Part 1 Impact Assessment Timeline

Below is a summary of the timeline of updates to the Impact Assessment.

1. What is the problem you are trying to solve?

1.1 DFAT assessed that the original AANZFTA no longer met Australian consumer and business requirements

The original AANZFTA has not kept pace with new opportunities in the ASEAN region, such as in education, services, investment, mobility, and digital trade. Since AANZFTA entered into force in 2010, best practice for FTAs has changed as a result of technological developments in the digital economy and uptake of e-commerce, in order to facilitate greater e-commerce in the region and enhance consumer confidence, data transfers, promote privacy and combat fraud. The original AANZFTA also lacks modern FTA outcomes on areas such as environmental protection, competition, government procurement, labour rights and gender equality.

The upgrade to AANZFTA solves the problem of the current version of AANZFTA no longer meeting the consumer and business requirements for a high-quality, contemporary FTA.

ASEAN's trade is important for the Australian economy and it is therefore important to ensure that Australia remains a trading partner of choice for ASEAN. In 2021, Australia's trade with ASEAN countries was $127.1 billion, which is greater than our two-way trade with Japan and the United States. Our two-way investment with ASEAN in 2021 was $248.7 billion. A strong AANZFTA is also important as it reinforces a rules-based and ASEAN-centred regional economic architecture.

1.1.1 Australian Stakeholders assessed that AANZFTA required upgrading

Submissions received from key Australian stakeholders, including peak industry bodies, on balance indicated that the Australian business community saw a requirement for the AANZFTA upgrade. In particular, stakeholders saw a need for streamlined rules of origin processes and updated services and investment outcomes to increase certainty for Australian businesses and investors. Stakeholders also sought trade facilitation measures and for progressive trade outcomes, such as on competition and sustainable development, to be included in the upgrade.

1.2 AANZFTA Parties agreed that the original AANZFTA required upgrading

The AANZFTA Parties envisaged that the Agreement would be a 'living' document and need periodic review and updating to ensure it remained a high quality and ambitious agreement. The First Protocol to Amend AANZFTA was signed by Ministers on 26 August 2014. This responded to practical business concerns in resolving implementation problems associated with Certificates of Origin and Rules of Origin.

In 2018, following the delivery of a 2017 comprehensive review of the Agreement (the AANZFTA General Review Stage One Report), AANZFTA trade and economic ministers agreed that AANZFTA required further modernisation to address technological advancements and to bring it in line with contemporary FTAs such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The General Review Stage One Report found that the implementation period had been positive, with an ongoing implementation agenda, supported by review mechanisms, work programs and institutional arrangements established under the Agreement. Trade, investment and AANZFTA business utilisation had continued to increase. However, questions remained over business awareness and use of AANZFTA.

One challenge that reaffirmed the need to change international trade structures was the COVID-19 pandemic. This demonstrated a need for expedited trade during humanitarian crises, epidemics and pandemics - reinforcing the need to upgrade the Agreement to promote supply chain resiliency and economic integration.

Part 2 1.1.3 Key areas where the original AANZFTA required upgrading

Industry inputs to the General Review highlighted a number of key issues for further work under AANZFTA, which are illustrated in Box 3.1, which was included in the Stage One Report.

The report highlighted that the broader regional architecture had evolved, with many AANZFTA Parties having signed more comprehensive bilateral and multilateral FTAs that provided more access to certain investment, services , digital opportunities, and closer economic cooperation commitments. AANZFTA Parties were also involved in the RCEP negotiations, which aimed to go further on goods, services, and investment commitments. In this broader context, it became imperative for AANZFTA to progress its built-in agenda and issues of interest to business, as well as to engage with other stakeholders. In particular, there was considerable potential for more work in the areas of customs procedures, sanitary and phytosanitary measures (SPS) and standards, technical regulations and conformity assessment procedures (STRACAP). Priority was accorded to progressing the services and investment built-in agendas, in particular on improving legal certainty and predictability of services regulations and investment regimes, as well as further developing rules in areas where policy frameworks are still developing, such as e-commerce. AANZFTA also provides a strategic focus for Australia, to promote ASEAN centrality and support the international rules-based order. The upgrade will further instil the importance of ASEAN in our region to promote economic integration, security, and supply chain resilience.

To address these limitations, the Ministers agreed to initiate AANZFTA upgrade negotiations on the following

•

Rules of origin: to take better account of modern trade practices, address implementation issues encountered by Australian exporters and make rules of origin easier to use and less costly for traders.

•

Customs procedures: enhance and modernise AANZFTA's provisions on customs procedures to promote trade facilitation, including a new provision that promotes expedited trade during humanitarian crises, epidemics and pandemics.

•

Services and investment: incorporate best practice rules and legal architecture, as reflected in modern FTAs, such as the CPTPP and RCEP, to support market openness and enhance trade facilitative practices and regulatory certainty.

•

Movement of natural persons: to better facilitate the movement of natural persons engaged in the conduct of trade and investment between the Parties and improve transparency of procedures of visa applications.

•

E-Commerce: modernise AANZFTA to support the growth of the digital economy in Australia and reflect the substantial developments in the digital economy since AANZFTA was originally negotiated.

•

Competition (including consumer protection): build on RCEP standards to include new provisions on consumer protection, including regional cooperation on the development and implementation of matters covered by the revised chapter.

•

Government procurement: facilitate enhanced cooperation on labour rights, women's economic empowerment and environmental protection.

•

Micro, small, and medium enterprises (MSMEs): new provisions for MSMEs as well as a framework for sharing information on best practice programs and activities aimed to enhance the capability of MSMEs to participate in and benefit from the economic opportunities created by the upgraded agreement.

AANZFTA's services and investment outcomes are modest compared to other agreements. Only 2.8 per cent of Australian investment goes to ASEAN and services exports are also underutilised, with Singapore accounting for one third of all Australian services exports to ASEAN. Australian companies are deterred from entering the underutilised ASEAN markets as they are concerned that the domestic laws and policies will change with no or little notice.

In their 13 November 2022 joint statement on the upgrade's substantial conclusion, the AANZFTA ministers emphasized the importance of the upgrade to strengthening the resilience of supply chains. The joint statement said that the upgrade 'is a testament to the AANZFTA Parties' resolve to accelerate post-pandemic economic recovery by deepening and broadening economic integration and cooperation to bolster more robust and resilient supply chains, keep markets open for trade and investment and catalyse longer-term growth by leveraging digital trade and sustainable development.'^[1]

While AANZFTA remains the highest quality of ASEAN's FTAs with its partners there were areas for significant improvement identified by the AANZFTA General Review. The AANZFTA Amendment directly addresses the AANZFTA General Review's recommendations and is consistent with the first recommendation of the Pivot report by enhancing opportunities for Australians wishing to trade with ASEAN Member States.

Part 3 1.1.4 The original AANZFTA was surpassed by RCEP

The Regional Comprehensive Economic Partnership (RCEP) entered into force for Australia on 1 January 2022. RCEP is a regional free trade agreement that complements and builds upon Australia's existing free trade agreements with 14 other Indo-Pacific countries (Brunei Darussalam, Cambodia, China, Japan, Laos, New Zealand, Singapore, Thailand, Vietnam, Republic of Korea, Malaysia, Indonesia and the Philippines). Building on RCEP outcomes, an upgraded AANZFTA will ensure the Agreement remains a relevant, contemporary agreement, which will continue to provide commercial benefits to businesses and consumers.

1.3 DFAT assessed that the original AANZFTA was no longer consistent with Australia's trade diversification agenda

Trade diversification is the central pillar of the Government's trade policy strategy, providing us and our regional partners with certainty and agency in the choices we make about where and with whom we trade, and addressing the risk of over-exposure to any one market or product. ASEAN partners are key to this diversification effort. Australia's liberal trade policy settings have underpinned our ongoing economic growth. Our open economy and support for rules-based international trade have contributed to the high standard of living Australians enjoy. Maintaining contemporary trade agreements that are fit for purpose is central to this policy.

In 2020, an Inquiry by the Joint Standing Committee on Trade and Investment Growth into Diversifying Australia's Trade and Investment Profile concluded in a report entitled 'Pivot'^[2], that there was a need to diversify Australia's trade. The first recommendation was:

•

That the Australian Government develop and release a plan for trade diversification, with:

-

a focus on maintaining relationships with existing close trading partners as well as expanding trade with other countries; and,

-

a plan for diversifying Australia's range of goods and services exports.

2. Why is Government action needed?

2.1 Objectives of government action

The overall objective of upgrading AANZFTA is to ensure that Australia remains a trading partner of choice for ASEAN member countries. This benefits Australian businesses and investors by ensuring the region is open to trade with Australia, thereby expanding economic opportunities for Australians and, ultimately, contributing to maintaining and improving the living standards of Australians. This also complements Australia's other foreign policy and diplomatic efforts, such as under Australia's Comprehensive Strategic Partnership with ASEAN. Additional objectives of Government action in upgrading AANZFTA include supporting the sustainable and inclusive development of our neighbouring ASEAN economies, in particular the least developed ASEAN economies, and reinforcing our region's rules-based and ASEAN-centred regional economic architecture.

Australia's economy relies on a strong and open global trading environment. The Australian Government is strongly committed to the WTO and its framework of rules, which helps promote and protect the open global trading system. Our membership in the WTO means that we benefit from its trade rules and we have a process to settle disputes if other trade partners breach these rules. A key rule of the multilateral trade system is that reductions in trade barriers should be applied, on a most-favoured nation basis, to all WTO members. This means that no WTO member should be discriminated against by another member's trade regime. However, regional trade agreements (RTAs) are an important exception to this rule. Under RTAs reductions in trade barriers apply only to the parties to the agreement. This exception is allowed under Article XXIV of the General Agreement on Tariffs and Trade (GATT) for trade in goods, in Article V of the General Agreement on Trade in Services (GATS) for Trade in Services and in the Enabling Clause for developing countries. There are two major types of regional trade agreements under the WTO - customs unions and free trade areas, with AANZFTA being a free trade area. RTAs must be consistent with the WTO rules governing such agreements, which require that parties to a regional trade agreement must have established free trade on substantially all trade within the regional area, and that the parties cannot raise their tariffs or other barriers against countries outside the agreement.

RTAs like AANZFTA are treaties, and the power to enter into treaties is an Executive power within section 61 of the Australian Constitution. Given that any treaty necessarily involves an element of Australia's foreign relations, the Minister for Foreign Affairs and the Department of Foreign Affairs and Trade (DFAT) have responsibility for treaties.

Part 4 2.1.2 Methods to achieve government action

Australia's method to achieve this government action is through its trade liberalisation agenda. The upgraded AANZFTA seeks to reinforce the trade liberalisation agenda and be a liberalising framework by:

•

Improving the government procurement processes through improved transparency and cooperation in government procurement.

•

Streamlining rules of origin processes to make it easier and less costly for businesses to access AANZFTA's benefits, with Figure 1 highlighting the importance of goods trade to Australia's economy.

•

Improving uptake of investments through high quality commitments on the entry of Australians to ASEAN Member States to supply services, including as business visitors and intra-corporate transfers, with Figure 1 also highlighting the importance of services trade to Australia's economy.

•

Boosting Australian investors' confidence, particularly in the region's higher income services sectors, including to create legal certainty for our services providers and investors in Southeast Asia.

•

Including new provisions for micro, small, and medium enterprises (MSMEs) to sharing information on best practice programs and activities aimed to enhance the capability of MSMEs to participate in and benefit from the economic opportunities created by the upgraded agreement.

•

Including new provisions on digital trade standards, digital inclusion, and dispute settlement reflect developments in digital trade since the original AANZFTA entered into force in 2010.

•

Including a new trade and sustainable development chapter to address identified emerging priorities in sustainable and inclusive trade, including labour rights, environmental protection, and women's economic empowerment, and to facilitate Australia's targeted economic cooperation activities under the Regional Trade for Development Program (RT4D).

Figure 1: AANZFTA Goods and Services Trade

2.2 Why government action is required

Government action is required to ensure AANZFTA remains a competitive, relevant, contemporary agreement, which continues to deliver economic benefits to Australian businesses and consumers. Signing the AANZFTA Amendment ensures that AANZFTA will provide opportunities to further promote and facilitate trade and investment between Australia and ASEAN member states, improve business conditions specific to Australian commercial interests and enhance regional economic integration.

Government action is needed for the AANZFTA upgrade to enter into force. As stipulated under article 7 of Chapter 18 'Final Provisions' of the Agreement, for the upgrade to come into effect it requires Australia, New Zealand, and at least four ASEAN Member States to ratify. To ensure that at least four ASEAN Member States (AMS) ratify in a timely manner, the Australian Government will advocate the benefits of the upgrade and provide support to countries requiring assistance (capacity building). Since some AMS do not have similar resources as Australia, it would most likely delay the upgrade's entry into force, delaying Parties stakeholders in realising the benefits from the upgrade. To progress entry into force, Australia could entail translation assistance, which is a requirement in those countries for ratifying free trade agreements. Australia could provide marketing material and other advocacy documents for use of these least developed nations, helping them advocate internally to reassure their domestic decision makers and expedite the process.

Figure 2 highlights the value of the ASEAN market to Australia's economy, and therefore the value of upgrading AANZFTA to ensure that Australia remains a trading partner of choice for ASEAN.

Figure 2: ASEAN Key Economic Indicators

2.3 Potential Implications of failure to take government action

Failure of the Government to implement the AANZFTA upgrade will forego the opportunity for Australian industry to benefit from improvements in market access and trade rules through the AANZFTA upgrade. Failing to sign the upgraded AANZFTA may also have negative implications for Australia's relationship with ASEAN and ASEAN member countries and reduce Australia's influence with ASEAN. Not signing will also undermine complementary effects such as the Southeast Asia Economic Strategy.

2.4 Alternatives to government action

DFAT assessed that there were not feasible alternatives to government action. Australian businesses and services are not able to seek trade enhancement, under AANZFTA, without the Australian Government's intervention to upgrade the Agreement. As addressed above, the power to enter into treaties is an Executive power within section 61 of the Australian Constitution, which only the Australian Government, and not private actors, can do.

2.5 Barriers to government action

While Australia negotiates FTAs to benefit Australian exporters, importers, producers and investors by reducing and eliminating certain barriers to international trade and investment, these negotiations are always subject to the agreement and preferences of our negotiating partners. This is particularly true in the case of multilateral negotiations including countries with a variety of different priorities and sensitivities.

3. What policy options are you considering?

This Impact Analysis considers two options: to sign or not to sign AANZFTA Amendment.

3.1 Option 1 - Sign the upgraded AANZFTA

The upgraded AANZFTA addresses issues identified under the AANZFTA General Review and agreed by AANZFTA trade and economic ministers and also includes new outcomes on issues such as digital trade and sustainable development.

Signing the upgraded AANZFTA will provide opportunities to further promote and facilitate trade and investment between Australia and ASEAN Member States, improve business conditions specific to Australian commercial interests and enhance regional economic integration. The upgraded AANZFTA builds on RCEP outcomes, and ensures AANZFTA remains a relevant, contemporary agreement, which continues to provide commercial benefits to businesses and consumers.

To ensure AANZTFA is contemporary and delivers financial benefits and ease of access to Australian businesses and consumers, Australia achieved the following the key outcomes in the course of AANZFTA Upgrade negotiations.

3.1.1 Key AANZFTA Upgrade Outcomes

Part 5 Rules of Origin

This chapter determines which goods are originating under AANZFTA and eligible for preferential tariff treatment. Key outcomes include enhanced, trade facilitating documentary evidence of origin arrangements (such as self-certification of origin); transit arrangements that reflect modern hubbing practices; and greater support for regional value chains, through more flexible rules on which regional inputs may count towards a good's originating status.

The upgraded AANZFTA will establish new regional rules of origin that make it easier and less costly for businesses to access AANZFTA's benefits. New cumulation rules will give traders more flexibility in sourcing and shipping inputs, promoting greater integration into regional and global supply chains. There is now a standalone consignment provision that provides for transhipment - this will provide clearer and broader scope for goods to retain their originating status when transiting through countries outside of AANZFTA.

The upgraded AANZFTA will also simplify and empower traders when it comes to completing documentation. Certificate of Origin arrangements, which are already familiar to Australian business will be maintained. The upgrade establishes an option for self-declaration (Declarations of Origin), with scope for proof of origin to be accepted in electronic format. Several AANZFTA Parties are familiar with Declarations of Origin through other FTAs. In addition, third party invoices will only require information to be provided where known, promoting ease of access to FTA benefits.

The Product Specific Rules (PSR) (which are the detailed Rules of Origin applying to individual products) have been upgraded to reflect specific treatment of chemical and technical rules. The PSR format will also be updated to be consistent with the current version of the HS (HS 2022). The AANZFTA PSR are currently recorded in a previous version of the HS (HS 2012). This causes unnecessary complexity for businesses and creates a risk that business will inadvertently make a mistake when claiming AANZFTA tariff preference.

Part 6 Customs Procedures

The Customs Procedures chapter has been expanded to include trade facilitation arrangements, building on commitments under the World Trade Organization (WTO) Trade Facilitation Agreement and gains made in other negotiations. Key outcomes include modernised rules enhancing predictability, consistency, and transparency in the application of customs laws and regulations; and promoting more efficient administration of customs procedures (e.g. through expedited clearance of express consignments and perishable goods; an authorised operator's scheme to reduce compliance burdens; and encouraging post-clearance audits a risk-based approach to customs compliance activities).

Part 7 Services & Investment

Figure 3 highlights the value of services trade to Australia's economy. The services commitments and chapter text have been expanded in the upgrade, taking into account existing built-in agenda items and progress in other relevant FTAs. Key outcomes include building on ASEAN´s existing AANZFTA services commitments to achieve an RCEP parity agreement as a baseline, going beyond RCEP in areas of commercial interest for Australia such as education and professional services, including by further facilitating mutual recognition of professional qualifications, and ensuring greater regulatory coherence and harmonisation in the region. The two Annexes on Telecommunications and Financial Services have also been upgraded to build on RCEP standards.

Figure 3: AANZFTA Services Trade

The Investment chapter text has been expanded considering existing built-in agenda items and progress in other relevant FTAs. Key gains include investment outcomes that reflect, or where possible, build on RCEP outcomes, and exploring the inclusion of modern safeguards or other approaches to enhance certainty in the Investor-State Dispute Settlement mechanism.

The upgraded AANZFTA will provide a strong platform to expand trade in services and to promote investment throughout the region. AANZFTA will establish high quality rules for investment and the supply of services between AANZFTA parties, including obligations to provide access to foreign service suppliers (market access), to treat local and foreign suppliers and investors equally (national treatment) and to treat foreign suppliers and investors at least as well as suppliers and investors of any other non-AANZFTA country (most-favoured-nation or MFN).

The upgraded AANZFTA will include a forward-looking MFN provision in services, like that agreed in RCEP, and a significant improvement over the MFN provision that existed in the original AANZFTA.

Several parties will make use of the inherently more liberalising approach of negative listing for the first time for services market access. All parties to the original AANZFTA used the 'positive list' approach to scheduling services, while the upgraded agreement will see the 'negative list' used in AANZFTA for the first time by Australia, Brunei Darussalam, Indonesia, Malaysia, New Zealand, and Singapore.

All AANZFTA parties have scheduled investment commitments in a 'negative list', and AANZFTA parties that have used a 'positive list' for services commitments are required to transition to a negative list. This ensures clarity and consistency across regional agreements.

The upgraded AANZFTA will include a 'ratchet-mechanism' which locks in future unilateral liberalisation for selected sectors and will allow significant reduction of barriers to services and investment trade over time.

The upgraded AANZFTA enhances the protections for Australian investors through the Investor-State Dispute Settlement (ISDS) mechanism, guaranteeing Australians against unlawful expropriation and unequitable treatment and provides investors with the right to access an international tribunal to resolve international disputes. The upgrade will modernise ISDS through exempting the Foreign Investment Review Board (FIRB) and expanding security exceptions. Australia could not unilaterally remove ISDS from AANZFTA. However, under the AANZFTA package of outcomes, Parties will review AANZFTA's existing ISDS mechanism through a work program that will commence 18 months after the entry into force of the upgraded AANZFTA. Further, the AANZFTA Amendment will disapply ISDS to AANZFTA's "National Treatment" obligation for 30 months from the date of entry into force. Foreign investment screening under Australia's Foreign Investment Review Board will also be exempt from the application of ISDS and state-to-state dispute settlement.

The sector-specific commitments provided by the other parties represent substantial improvements over those contained in the original AANZFTA agreement. These improvements will provide greater certainty for Australian service suppliers and investors and will benefit Australian businesses across a range of sectors, including in professional services; education services; financial services; communications services; healthcare services; construction and related engineering services; tourism, recreational, cultural and sporting services; transport services; and wholesale trade and retailing services.

The Annex on Professional Services (Annex 8C) facilitates cooperation on recognition of professional qualifications, licensing and registration requirements. It provides a framework for professional bodies to expand their links with AANZFTA counterparts, encouraging dialogue on recognition of qualifications, licences and registration, as well as encouraging development of mutual recognition arrangements in professions of mutual interest and alignment with international frameworks on standards and criteria for professions.

The Annex on Education Services Cooperation (Annex 8D) recognises the important role that education services play in enhancing growth and prosperity and deepening institutional and people-to-people links among the Parties. The Annex will encourage cooperation in education quality assurance processes and the recognition of qualifications. It will also encourage cooperation on the development of training, programs, and staff exchanges. The Annex provides an important signal of the Parties' mutual priorities and interests in particular sectors or fields, and complements the specific, formalised rules contained in the market access schedules.

Part 8 Movement of Natural Persons

The mobility market access commitments and chapter text has been expanded to further facilitate the movement of natural persons engaged in the conduct of trade and investment between the Parties, and improve transparency of procedures of visa applications - while protecting the integrity of Australia's borders, domestic labour force and permanent employment.

The Movement of Natural Persons chapter and related schedules build on the original AANZFTA and RCEP commitments and provide certainty on temporary entry and stay for businesspersons to facilitate trade and investment in the region.

The upgraded Movement of Natural Persons chapter (chapter 9) builds on existing AANZFTA commitments, giving Australian businesspersons certainty on temporary entry and stay access in the region and greater certainty about the rules that will apply to them. The Movement of National Persons chapter establishes rules for the temporary entry and stay of natural persons between AANZFTA parties, including new obligations to facilitate and streamline immigration formalities. These include obligations to accept immigration formalities in electronic format, accept copies of authenticated documents, and to publish information in English. The chapter also includes new provisions to distinguish the Movement of Natural Persons chapter from other chapters of the agreement, removing ambiguity regarding obligations in other chapters applying to temporary entry and stay, especially as they relate to Trade in Services obligations such as Most-Favoured Nation. This provides additional protections for Australia's, and other Parties', immigration systems.

Australia's Movement of Natural Persons schedule of commitments are consistent with original AANZFTA and RCEP commitments. Australia made commitments on business visitors, intra-corporate transferees, independent executives, contractual service suppliers and spouses. Consistent with AANZFTA and RCEP, Australia has retained the right to apply labour market testing for contractual service suppliers, to the extent that this is not inconsistent with commitments under the WTO. Consistent with more recent trade agreements, including RCEP, Australia has removed sectoral commitments under all categories, providing Australia more flexibility to modify its domestic visa arrangements, such as changes to occupation lists.

Part 9 Electronic Commerce (E-Commerce)

The Electronic Commerce chapter text has been expanded to take into account developments at the international, regional and national level. Key outcomes include digital trade outcomes up to our best trade agreement practice, including high quality rules that improve on RCEP outcomes; and the application of dispute settlement to as much of the ecommerce chapter as possible.

The upgraded E-Commerce chapter will modernise AANZFTA to support the growth of the digital economy in Australia and reflect the substantial developments in the digital economy since AANZFTA was originally negotiated. The chapter will help provide certainty for businesses and consumers engaging in digital trade in the region by promoting interoperability of systems across borders, protecting consumer privacy and building trust in the online environment.

Several new articles have been adapted from RCEP (given its status as a shared precedent for AANZFTA Parties), but the upgraded chapter also extends beyond RCEP by including articles on digital inclusion, electronic invoicing, digital trade standards and open government data.

Specifically, the chapter includes obligations that promote a move towards paperless trading in the digital economy by requiring the acceptance of e-signatures and e-authentication, and by encouraging the adoption of interoperable electronic invoicing systems. The chapter also includes commitments that promote trust and confidence in the digital economy through rules on the protection of personal information, consumer protection, transparency and the prevention of unsolicited communications (e.g. spam).

The movement of data across borders continues to be a fundamental aspect of e-commerce between countries, with most transactions involving the creation and transfer of data. The chapter includes rules that support the free flow of data across borders and that prevent unjustified data localisation requirements, while maintaining appropriate regulatory space in certain areas, including for the protection of privacy.

Significantly, AANZFTA Parties agreed that the dispute settlement mechanism in chapter 17 will apply to the E-Commerce chapter subject to specific transitional periods for data rules (Articles 17 and 18.

Part 10 Competition

The Competition chapter text has been expanded to build on RCEP standards to include new provisions on consumer protection, including regional cooperation on the development and implementation of matters covered by the revised chapter.

The Competition chapter (chapter 14) now contains obligations requiring AANZFTA parties to adopt or maintain competition laws and regulations to proscribe anti-competitive actions and enforce those laws accordingly. The chapter obliges AANZFTA parties to adopt or maintain laws or regulations to proscribe the use in trade of misleading practices or false or misleading deceptions. It also provides for cooperation between the AANZFTA parties on consumer protection and on competition law enforcement. The Competition chapter contains standard provisions that are similar to Australia's previous FTAs and are consistent with the Competition and Consumer Act 2010.

Part 11 Government Procurement

A Government Procurement chapter has been developed, without market access commitments, which supports improved transparency and cooperation in government procurement. Key outcomes include transparency, integrity and cooperation provisions reflecting our best trade agreement practice, building on the RCEP Government Procurement chapter, and establishing a platform for future negotiations on government procurement commitments through a built-in work programme.

The Government Procurement chapter (chapter 17) provides for commitments that recognise the importance of promoting enhanced transparency and integrity in government procurement processes; facilitating Micro, Small and Medium Enterprise participation in government procurement; promoting the concept of environmental sustainability in government procurement; and promoting the use of electronic procurement systems to facilitate easier access to ASEAN and New Zealand procurement opportunities for Australian suppliers. In addition, the chapter provides for capacity building and the development of cooperation among the AANZFTA Parties.

The chapter does not contain market access commitments and its scope is limited to the central government level (the Commonwealth Government in Australia). No legislative or regulatory changes are required for Australia.

Part 12 Trade and Sustainable Development

The upgraded AANZFTA will include a new Trade and Sustainable Development chapter which will facilitate enhanced cooperation on labour rights, women's economic empowerment and environmental protection. This chapter will facilitate Australia's targeted economic cooperation activities under the Regional Trade for Development Program (RT4D).

The upgraded AANZFTA's new Trade and Sustainable Development chapter is ASEAN's first chapter on sustainable development issues in a trade agreement. For AANZFTA members not party to the CPTPP, it also contains their first commitments in a trade agreement on environment and labour standards. It contains all ASEAN members' first commitment in a trade agreement on women's economic empowerment.

The chapter recognises Parties' commitment to sustainable development, environmental protection, labour protections and women's economic empowerment. Parties also recall their commitment to multilateral environment and labour agreements to which they are individually a party, as well as to the 2030 Agenda for Sustainable Development and its Sustainable Development Goals. Parties additionally recognise that it is inappropriate to weaken or reduce levels of protection in their environmental or labour standards to encourage trade and investment. The chapter facilitates economic cooperation activities in these areas, including in climate, green and blue economy, energy and sustainable development broadly. Cooperation under the chapter is overseed by the FTA Joint Committee.

Part 13 Micro, Small and Medium Enterprises (MSMEs)

A new MSMEs chapter has been developed to help address issues that MSMEs face, which other larger businesses don't. Priorities include seeking a range of provisions aimed at fostering the growth and development of the sector: e.g., Information sharing - commitments that will make it easier for businesses to get the information they need to export/import; and cooperation provisions - to allow parties to work together on issues such as trade facilitation and digital trade.

The Micro, Small and Medium Enterprises chapter seeks to promote information sharing and cooperation among AANZFTA parties to enhance opportunities for their MSMEs to participate in the benefits created by the upgraded Agreement.

3.2 Option 2 - No action

The second option is for Australia to not sign the upgraded AANZFTA. DFAT has identified the below two limitations with this option.

Part 14 3.2.1 DFAT assess that declining to sign the upgraded AANZFTA would be inconsistent with Australia's trade liberalisation agenda

Not signing the AANZFTA upgrade would be at odds with Australia's trade liberalisation agenda and may have reputational risks for Australia's relationship with ASEAN Member States. Not upgrading Australia's most important FTA with ASEAN will not serve our strategic interests in promoting a prosperous and secure region. If we do not ensure our participation with ASEAN economic development and cooperation in the Indo-Pacific, Australia will reduce its influence and limit the potential opportunities for trade diversification and economic resiliency. We will reduce our ability to guide regional trade, such as enhanced supply chains, greater trade facilitation, and ease of doing business for all Parties. ASEAN is forecasted to grow 4.7 per cent in 2023 (ADB) with a nominal GDP USD 3.66 trillion and will continue to grow. ASEAN, as a combined economy, is projected to rank as the fourth-largest economy globally by 2050, and currently ranks as the seventh-largest economy (McKinsey). If we do not upgrade AANZFTA, Australia is projected to lose the economic opportunity of selling Australian products, services, and investments to ASEAN Member States.

Part 15 3.2.2 DFAT assess that declining to sign the upgraded AANZFTA or delays in Australia's ratification would prevent the upgrade from entering into force for other AANZFTA members

Pursuant to Article 2(2) of the Second Protocol to Amend the Agreement Establishing AANZFTA, the upgraded AANZFTA will only enter into force 60 days after the date on which Australia, New Zealand and at least four ASEAN member states have deposited their instruments of ratification, acceptance or approval. This means that if Australia fails to sign and ratify the upgraded AANZFTA, that it will prevent the upgraded AANZFTA from entering into force for all other AANZFTA members. This would prevent AANZFTA members, including less developed ASEAN members, from realising the benefits of the upgraded AANZFTA, despite the extensive resources these countries have extended to upgrade the Agreement.

Delays in any aspects of the legislative process could result in delays to entry into force of the upgraded AANZFTA. Depending on the reasons for these delays, this could result in reputational risks for Australia, as it could be perceived that Australia is stalling on its commitments.

Australia's bilateral engagement with the countries of Southeast Asia is strengthened by Australia's engagement with ASEAN, the region's premier representative grouping. Government to government links between Australia and ASEAN are strong and reflect close to half a century of cooperation. Compromising these by not signing the upgrade which has been under negotiations since 2018 could be harmful to our bilateral relationships and people-to-people links between Governments. Not signing would also undermine efforts to implement and maximise benefits outlined in the Southeast Asia Economic Strategy 2040.

4. What is the likely net benefit of each option?

4.1 Option 1 - Sign the upgraded AANZFTA

Signing the upgraded AANZFTA will be a strong sign of the Government's commitment to diversifying our trading relationships, creating new commercial opportunities for our exporters and driving inclusive economic growth for all Australians. The changes that will be made to AANZFTA through upgrade also complements the Government's Southeast Asia Economic Strategy to 2040 by strengthening Australia's economic engagement with the region. Once in force, the upgrade will maintain AANZFTA's status as ASEAN's highest-quality trade agreement and further reinforce the Indo-Pacific's rules-based economic architecture.

Impacts of key changes to AANZFTA through the upgrade process

Part 16 4.1.1 Rules of Origin

Benefits

The upgraded AANZFTA establishes new rules of origin that make it easier and less costly for business to access the Agreement's benefits. The upgrade streamlines and modernises product origin documentation and transit agreements, making is easier and less costly for business to export products to ASEAN Member States.For example, new opportunities will be created for ASEAN exporters by enabling traders to have more flexibility in sourcing inputs for the products they sell. In turn, Australian exporters will gain greater demand for their inputs into ASEAN production. This provides for the future implementation of Declarations of Origin (DOOs), reducing time and cost for traders by allowing self-certification.

Costs

There is potential for some upfront implementation costs for business, including the costs associated with training staff to understand and implement new Rules of Origin processes. However, no longer term costs have been identified.

Part 17 4.1.2 Customs Procedures

Benefits

Key outcomes include modernised rules enhancing predictability, consistency, and transparency in the application of customs laws and regulations through promoting more efficient administration of customs procedures. For example, the upgrade will expedite clearance of express consignments and perishable goods and will put into place an authorised operator's scheme to reduce compliance burdens. The upgrade will also encourage post-clearance audits a risk-based approach to customs compliance activities and includes provisions for trade facilitation of essential goods during crises, which streamlines trade procedures. These changes have the cumulative impact of reducing current compliance burdens, which will reduce broader operating costs for businesses.

Costs

There are limited costs associated with changes to customs procedures provisions, as the modernised rules will enhance and streamline compliance and regulatory administration. There may be limited upfront implementation costs for businesses.

Part 18 4.1.3 Services and Investment

Benefits

The upgraded AANZFTA modernises existing protection for investors, including guarantees against unlawful expropriation, and adds rules to provide further protections for investors, such as protecting investors from requirements to appoint nationals as the manager or to the board of their investment.

The upgrade also establishes high quality rules for investment and the supply of services between AANZFTA parties, including obligations to provide access to foreign service suppliers (market access), to treat local and foreign suppliers and investors equally (national treatment); and to treat foreign suppliers and investors at least as well as suppliers and investors of any other non-AANZFTA country (most-favoured-nation or MFN). Australian service suppliers and investors will benefit across a range of sectors, including in professional services; education services; financial services; communications services; healthcare services; construction and related engineering services; tourism, recreational, cultural and sporting services; transport services; and wholesale trade and retailing services.

Professional services will benefit from stronger rules and legal architecture by assisting business with a platform for the development of mutually acceptable professional standards. A 'ratchet-mechanism' which locks in future unilateral liberalisation for selected sectors and will also allow significant reduction of barriers to services and investment trade over time. This means that countries cannot walk back on existing market access commitments, providing businesses and consumers a guaranteed level of investment and services.

Costs

Some stakeholders held concerns on the Investor-State Dispute Settlement (ISDS) mechanism, which is still active in AANZFTA. However, Australia and New Zealand continue constructive engagement with existing commitments under ISDS. Under the AANZFTA package of outcomes, the Parties will review AANZFTA's existing Investor State Dispute Settlement ISDS mechanism through a work program that will commence 18 months after the entry into force of the upgraded AANZFTA.

Part 19 4.1.4 Movement of Natural Persons

Benefits

The upgraded AANZFTA will improve transparency of procedures of visa application, through established rules and new obligations to facilitate immigration formalities (digitalised forms, documents and translated in English). The upgrade expands on existing commitments and provides certainty on temporary entry and stay for businesspersons to facilitate trade and investment in the region. Australia has removed sectoral commitments under all visa categories, providing Australia more flexibility to modify its domestic visa arrangements, such as changes to occupation lists.

Figure 4 highlights the movement of persons over the previous decade between AANZFTA members and Australia. Please note the COVID19 pandemic impacted the number of arrivals in 2020, however, since travel restrictions have been lifted, returns are rebounding.

Figure 4: Movement of persons between AANZFTA members and Australia

[11]

Costs

Nil costs have been identified.

Part 20 4.1.5 Electronic Commerce

Benefits

The upgraded AANZFTA provides improved certainty for business and consumers engaging in digital trade in the region by promoting interoperability of systems across borders, protecting consumer privacy, and building trust in the online environment. The Electronic Commerce chapter includes key obligations that promote a move towards paperless trading in the digital economy by requiring the acceptance of e-signatures and e-authentication, and by encouraging the adoption of interoperable electronic invoicing systems. The chapter moreover includes commitments that promote trust and confidence in the digital economy through rules on the protection of personal information, consumer protection, transparency and the prevention of unsolicited communications (e.g. spam), in addition to rules that support the free flow of data across borders

Costs

Nil costs have been identified from the new E Commerce chapter for Australia.

Part 21 4.1.6 Competition

Benefits

The upgraded AANZFTA includes new provisions on consumer protection, including regional cooperation on the development and implementation matters. These outcomes protect Australian business and consumers by requiring AANZFTA Parties to adopt or maintain competition laws and regulations an enforce laws accordingly.

Costs

Nil costs have been identified from these new commitments for Australia. Australia, already having high regulatory standards, is already compliant with these outcomes.

Part 22 4.1.7 Government Procurement

Benefits

The upgraded AANZFTA includes government procurement chapter including transparency, integrity, and cooperation provisions reflecting best trade practices. These outcomes promote the use of electronic procurement systems to facilitate easier access to Australian suppliers.

Costs

Nil costs have been identified. Advice taken from State and Territories consultations was to not include market access commitments in upgrade negotiations. As there are no changes to market access commitments under the Government Procurement chapter, there has been no changes to these settings when compared with the existing AANZFTA. This also means that the commitments under the chapter do not limit the Government's ability to direct procurement to Australian small businesses, such as under the Buy Australia Plan.

Part 23 4.1.8 Trade and Sustainable Development

Benefits

The upgraded AANZFTA will be ASEAN's first trade agreement to include outcomes on environmental protection, labour rights and women's economic empowerment. The trade and sustainable development chapter intends to facilitate enhanced cooperation in these areas.

Costs

Nil costs for government are identified as emerging from the upgrade, as these are cooperation commitments that are implemented under Australia's already in place Regional Trade for Development Initiative.

Part 24 4.1.9 Micro, Small and Medium Enterprises (MSMEs)

Benefits

The upgraded AANZFTA provides a facility for MSMEs to share information and best practices to foster growth and development in import/export sectors.

Costs

Nil costs are identified, as these are cooperation commitments.

Part 25 Summary Table :Cost-Benefit Analysis

Key

As a bloc, ASEAN accounted for 14.3 per cent of Australia's total trade in 2021-22, or A$150,875 billion. In its 2021 National Trade Survey, the Australian Chamber of Commerce and Industry found that businesses rated AANZFTA as the third most utilised free trade agreement for goods traders, behind FTAs with China and the US .[1] However, only 2.8 per cent of Australian investment goes to ASEAN Member States .[2] In 2021-22, Australia's services trade with ASEAN was A$19,142 billion, with Singapore accounting for more than 59 per cent of that figure. When compared to Australia's A$1.3 trillion plus services sector, there is room to grow.

There are multiple influences on international trade and investment flows, such as current economic conditions, exchange rate fluctuations, supply and demand factors, and environmental issues such as natural disasters. This has an impact on determining a causal relationship between an FTA and trade and investment outcomes.

While economic forecasting is not currently available on the potential net-benefits of the AANZFTA upgrade, the economic benefits of AANZFTA to Australia and its AANZFTA partners are nonetheless demonstrated by available data. We know that AANZFTA contains regional rules of origin and substantial tariff reduction and elimination commitments, as well as World Trade Organization (WTO)-plus commitments in other areas such as services, which provide commercially meaningful benefits to Australian business and further strengthen Australia's commercial ties with ASEAN. Improved access and certainty in ASEAN markets resulting from AANZFTA is commercially significant for Australian industry, particularly in the Indonesian, Philippines and Vietnamese markets. The Australian Chamber of Commerce and Industry have advised that they see AANZFTA as 'Australia's leading Free Trade Agreement' and that AANZFTA has 'provided benefits to our members and Australia in general.' Demonstrating this, Figure 5 highlights goods exports to ASEAN since 2017, including that there has been a steady increase in exports, with this increase being anticipated to continue in coming years.

Figure 5: Australia's Monthly Goods Exports to AANZFTA [5]

Australian industry peak bodies have highlighted the benefits of AANZFTA for their exports in addition to the net benefits of an upgrade. The Minerals Council of Australia (MCA) in their submission to the AANZFTA review highlighted the high value of Malaysia, Vietnam and Indonesia as export markets for Australian minerals, and the importance of addressing non-tariff barriers and barriers to services and investment in the AANZFTA upgrade to facilitate continued export growth to these markets .[6] The MCA have found that ASEAN imports of minerals and basic metals were more than USD94 billion in 2018 (compared to USD530 billion in 2022), with import growth from ASEAN countries being faster in aggregate than for China, India and Japan, and faster than for the rest of the world minus ASEAN. The AANZFTA upgrade will ensure Australia maintains its access to the ASEAN Minerals market, taking advantage of the growth in the region .[7] Figure 6 also highlights the net benefits of goods and services trade under AANZFTA.

Figure 6: Australia's Goods and Services Trade with AANZFTA (Exports -ve / Imports +ve) [8]

Table 1 below demonstrates the key sectors benefitting from Australia's services trade under AANZFTA during 2021-22, including A$11.5 billion in exports and A$12.6 billion in imports.

Table 1: Australia's services trade with AANZFTA, 2021-22

4.2 Option 2 - No action

There are no meaningful advantages to not signing the AANZFTA upgrade but there are many disadvantages.

Part 26 4.2.1 Declining to sign the upgraded AANZFTA would be inconsistent with Australia's trade liberalisation agenda

As outlined in the problem identification and policy options sections, if Australia did not sign the upgraded AANZFTA, this would be at odds with Australia's trade liberalisation agenda. Australia would forego the opportunity to benefit from improvements in market access and trade rules through the AANZFTA upgrade and Australian businesses would continue to face higher transaction costs for exporters, lower investment confidence and outdated digital trade standards.

Part 27 4.2.2 Declining to sign the upgraded AANZFTA would prevent the upgrade from entering into force for other AANZFTA members

Pursuant to Article 2(2) of the Second Protocol to Amend the Agreement Establishing AANZFTA, the upgraded AANZFTA will only enter into force 60 days after the date on which Australia, New Zealand and at least four ASEAN member states have deposited their instruments of ratification, acceptance or approval. This means that if Australia fails to sign and ratify the upgraded AANZFTA, that it will prevent the upgraded AANZFTA from entering into force for all other AANZFTA members. This would prevent AANZFTA members, including less developed ASEAN members, from realising the benefits of the upgraded AANZFTA, despite the extensive resources these countries have extended to upgrade the Agreement.

This course of action may have tangible negative implications for Australia's relationship with New Zealand, ASEAN and ASEAN member countries and reduce Australia's influence with ASEAN. Australia's bilateral engagement with the countries of Southeast Asia is strengthened by Australia's engagement with ASEAN, the region's premier representative grouping. Government to government links between Australia and ASEAN are strong and reflect close to half a century of cooperation.

4.3 Trade Impact Assessment of the AANZFTA Upgrade

The upgrade to AANZFTA will maintain Australia's competitive edge in Southeast Asia and will enable Australian exporters to diversify. It will also boost investor confidence in the region. The upgrade to AANZFTA is consistent with Australia's international commitments, including those under the World Trade Organisation (WTO).

As a bloc, ASEAN accounted for 14.3 per cent of Australia's total trade in 2021-22 or A$150,875 billion. In 2021-22, Australia's services trade with ASEAN was A$19,142 billion.

The upgrade to AANZFTA is likely to impact predominantly on services and investment between Australia, New Zealand and ASEAN Member States.

The main affected stakeholders in Australia will be:

•

Consumers, who will be able to access more competitive goods and services and to transact on-line with enhanced protection.

•

Australian businesses, who will benefit from enhanced transparency and integrity in the government procurement process which will create a more level playing field in bidding for contracts across the region.

•

Professionals, who will benefit from mutually acceptable professional standards and streamlined licensing and registration systems, which will reduce costs and time for them and their clients.

•

Traders, who will benefit from increased flexibility in sourcing and shipping inputs, promoting greater integration into regional and global supply chains. Additionally, traders will benefit from simplified documentation requirements from origin certification to invoicing.

The upgrade to AANZFTA will have a positive impact on services, trade and investment by simplifying documentation requirements and enhancing trader and consumer confidence in online and electronic business. The upgrade to AANZFTA does not contain any AANZFTA-minus commitments, meaning it only serves to improve services, trade and investment between Australia, New Zealand and ASEAN Member States.

The upgrade to AANZFTA would need to be notified to the WTO pursuant to Paragraph 14 of the Transparency Mechanism for Regional Trade Agreements (WT/L/671).

5. Who did you consult and how did you incorporate their feedback?

5.1 Submissions Received

DFAT provided stakeholders the opportunity to provide written submissions on the AANZFTA General Review process. Table 2 below outlines submissions received, which are also published on DFAT's website.

Table 2: Summary of Stakeholder Submissions

These submissions helped inform Australia's position on the areas to be considered as part of the AANZFTA upgrade.

The submissions highlighted that AANZFTA has been a transformative trade agreement, benefitting both small and large companies within the member economies and endorsed the governments to position to upgrade AANZFTA. Australian Pork Limited commented on the fact that exports of Australian pork to the ten ASEAN economies rose from A$80.7 million in 2009 to A$87 million in 2016, growth of almost ten percent since the introduction of AANZFTA. The submissions also highlighted that and that upgrading AANZFTA will expand the benefits of the agreement for member economies, including through the removal of barriers to trade such as tariffs, quota restrictions and licensing and registration restrictions.

The upgrade to AANZFTA directly addresses concerns raised by these submissions, such as the Export Council of Australia's requests to simplify rules of origin and introduce chapters on trade facilitation and government procurement. These amendments to AANZFTA support Australian businesses to fully utilise the benefits of the Agreement.

5.2 Stakeholder Engagement

DFAT also reached out to industry stakeholders and offered regular engagement opportunities throughout the ANZFTA upgrade negotiations, including engaging directly with representatives of the business sector and civil society on relevant aspects of the upgrade negotiations. DFAT held Biannual Peak Bodies Consultations, allowing Australian businesses, civil society, First Nations groups and unions to engage with the Department's trade agenda. DFAT provided updates on the outcomes of the negotiation rounds through published articles on the DFAT AANZFTA website and stakeholder engagement sessions.

5.3 States and Territories

States and Territories were consulted throughout the negotiations. Consultations included 5 State and Territory information seminars. The main interest of States and Territories was changes to market access to government procurement, which was not included in the Government Procurement chapter review.

5.4 Whole of Australian Government Engagement

Throughout the negotiation period DFAT hosted regular interdepartmental meetings to keep whole of Australian Government stakeholders updated. DFAT subject matter negotiators also engaged continuously and directly with Australian Government policy leads throughout the negotiation process.

6. What is the best option from those you have considered?

Table 3 below summarises the costs and benefits of the two options. DFAT's qualitative assessment is that signing AANZFTA Amendment will result in a net benefit for Australia.

6.1 Option 1 - Sign the upgraded AANZFTA

Taking into account submissions and consultations in combination with available data on the benefits of AANZFTA to the Australian economy, signing the upgraded AANZFA has been identified as the best option with the greatest net benefits. This includes a provision to make it easier for business to self-certify the origin of their goods, eliminating the need to pay a peak body to obtain a certificate of origin, which was a specific request of the Export Council of Australia.

Signing the upgraded AANZFTA will provide opportunities to further promote and facilitate trade and investment between Australia and ASEAN Member States, improve business conditions specific to Australian commercial interests, and enhance regional economic integration. Building on RCEP outcomes, the upgrade negotiations have ensured that the upgraded AANZFTA remains a relevant, contemporary agreement, which will continue to provide commercial benefits to businesses and consumers.

The upgrade is well aligned with the Government's policy to improve business conditions for Australian exporters of goods and services, and Australian investors, and with our geostrategic interests in promoting transparent and rules-based approaches to trade and enhancing regional prosperity and integration.

The upgraded AANZFTA is consistent with Australia's obligations under other international agreements, including the WTO. Chapter 21 (Final Provisions) provides that AANZFTA will coexist with AANZFTA parties' existing international agreements with each other (which include, for example, the WTO Agreement and Australia's bilateral FTAs with other AANZFTA Parties).

Part 28 6.1.1 Regulatory impacts

The upgraded AANZFTA entering into force is expected to result in a reduction in ongoing business compliance costs for Australian businesses trading with ASEAN due to simplified documentation requirements from origin certification to invoicing.

The upgrade will not result in changes to regulations that would adversely affect Australian businesses, community organisations, or individuals. The AANZFTA upgrade is unlikely to impose any additional regulatory costs to businesses or individuals.

7. How will you implement and evaluate your chosen option?

7.1 Implementation

In line with Australia's treaty-making processes the text of the AANZFTA upgrade will be tabled in Parliament. The Joint Standing Committee on Treaties (JSCOT) will then conduct an inquiry into the FTA and report back to the Parliament. Following consideration by the JSCOT, Parliament will consider any legislation, or amendments to existing legislation that may be necessary to implement the Agreement prior to treaty action being taken.

Article 2 of the Second Protocol provides that it shall enter into force 60 days after the date on which Australia, New Zealand and at least four of the ten ASEAN Member States have notified other AANZFTA Parties of the completion of their respective internal requirements necessary for entry-into-force. The Parties are aiming for entry-into-force in 2024.

Australia would need to make legislative changes in order to implement the obligations in AANZFTA, including amendments to the following:

a.

Customs Act 1901

b.

Customs (International Obligations) Regulation 2015; and

c.

Customs (ASEAN-Australia-New Zealand Rules of Origin) Regulations 2009 (for determining

d.

the originating status of goods for the purpose of determining eligibility for preferential rates of customs duty)

DFAT will work closely with the relevant Australian Government departments to implement the necessary administrative and legislative changes, as outlined in the above paragraph, required to give effect to the proposed AANZFTA upgrade.

7.2 Evaluation

Part 29 7.2.1 Continued evaluation by DFAT

DFAT will continue to internally review and evaluate AANZFTA's implementation in Australia, including in close coordination with DFAT's Trade Data analytics area as new data on AANZFTA becomes available. DFAT will utilise relevant ABS and Home Affairs trade and mobility data, as available, in this monitoring.

Part 30 7.2.2 Evaluation in accordance with the Agreement

In accordance with Chapter 21, Article 10 of the proposed AANZFTA upgrade, AANZFTA will continue to undergo formal periodic reviews and upgrades to ensure it remains fit-for-purpose in an evolving regional trade and investment environment. Australia will continue to participate in AANZFTA review and upgrade processes, including through inviting submissions from and consulting with stakeholders in the course of these processes.

Evaluation metrics will include both quantitative and qualitative assessment and the extent to which the relevant committee, subsidiary bodies and working groups under AANZFTA are working effectively and meeting regularly.

The scheduled review of the upgraded AANZFTA may consider the following:

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each chapter, annex and appendix of AANZFTA;

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any elements of the built-in agenda that have not been completed;

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the role of economic cooperation in the ongoing implementation of the Agreement and negotiation of the built-in agenda, as well as advancing economic integration among the Parties (Annex 1: Economic Cooperation);

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supporting the ASEAN objectives of narrowing development gap, including facilitating the more effective economic integration of least developed ASEAN Member States;

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the outcomes from any reviews of other FTAs that ASEAN, Australia or New Zealand is a member of, and any RCEP outcomes, in assessing any implications for AANZFTA;

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improvements that could be made to areas of commitments already included in AANZFTA;

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options to enhance AANZFTA's role in promoting closer economic integration among the Parties (e.g. regulatory cooperation); and

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the inclusion of any other issues that would ensure AANZFTA remains a high quality and ambitious agreement.

In support of this work, AANZFTA Parties may share trade data and other analysis, including tariff preference utilisation to the extent that such information is available. The findings of consultation and analysis undertaken individually by the Parties may be shared with the other Parties.