House of Representatives

Customs Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Implementation) Bill 2008

Explanatory Memorandum

Circulated By Authority of the Minister for Home Affairs, the Honourable Brendan O'Connor Mp

ANNEX B

ASEAN-Australia-New Zealand Free Trade Area (AANZFTA):

Summary of Key Obligations

Preamble and Chapter 1: Establishment of the Free Trade Area, Objectives and General Definitions

1. The Preamble recites the historical basis, regional context and broad aims for the AANZFTA. Importantly, the AANZFTA is cited as an "important building block towards regional economic integration" in recognition of the free trade agreement's (FTA's) role in contributing to the development of regional economic architecture. Chapter 1 sets out the objectives of the FTA, establishes the ASEAN-Australia-New Zealand Free Trade Area (consistent with World Trade Organization (WTO) rules) and defines terms that are used in more than one chapter of the FTA.

Chapter 2: Trade in Goods

2. The Trade in Goods Chapter obliges Parties to progressively reduce and/or eliminate tariffs in accordance with each Party's applicable schedule contained in the Schedule of Tariff Commitments. It establishes the framework of rules for trade in goods among the Parties. The Chapter affirms a number of WTO provisions that already govern trade in goods among the Parties and, in some cases, provides for more specific commitments as well as enhanced transparency. This includes provisions covering: national treatment, fees and charges connected with importation and exportation, publication and administration of trade regulations, and import licensing. The Chapter contains a commitment that, consistent with WTO rights and obligations, each Party will eliminate all forms of export subsidies for agricultural goods exported to other Parties. There is also a commitment for the Committee on Trade in Goods (established pursuant to Article 11) to review non-tariff measures and to report to the FTA Joint Committee within two years of entry into force of the Agreement with a view to considering the scope for additional means to increase trade between the Parties.

3. The Chapter provides for the establishment of contact points to facilitate information exchange. The Chapter also provides for consultations on request as well as for the Committee on Trade in Goods to consider matters arising under this Chapter or under other goods-related chapters (Chapters 3, 4, 5, 6 and 7).

4. With regard to tariffs, the tariff schedules in Annex 1 to the Agreement provide for the reduction and elimination of tariffs over a transition period. Tariffs will be eliminated on a high percentage of tariff lines in all AANZFTA Parties. The tariff elimination commitments will be phased-in from early in the transition period, and many tariffs currently at possibly prohibitive levels will be reduced to levels that should allow trade to flow within a few years. Exclusions from tariff commitments have been kept to a minimum, and generally do not exceed one per cent of a country's national tariff lines. For those tariff lines where tariffs are not eliminated, but which are not in the exclusion category, tariffs will either be bound at the base (i.e. 2005) tariff rate or subject to tariff reductions.

5. The tariff outcomes provide for longer transition periods and lower tariff elimination outcomes for Vietnam and the three least developed countries (Burma, Cambodia and Laos), in recognition of their status as newer ASEAN member countries with less developed economies.

6. For further information, see Annex C: Summary of AANZFTA Tariff Commitments.

Chapter 3: Rules of Origin

7. The Rules of Origin (ROO) Chapter and associated Operational Certification Procedures (OCP) and Schedule of Product Specific Rules (PSRs) establish the criteria for determining whether goods will qualify for preferential tariff treatment under the AANZFTA (whether a good "originates" in Australia, New Zealand or an ASEAN member country). The chapter also sets out the procedures and documentation for demonstrating that a good qualifies for preferential treatment and, if necessary, verifying that this is the case.

8. The AANZFTA establishes a ROO based on "co-equal" access to rules based on either the 'change in tariff classification' (CTC) model or a regional value content (RVC) test. For most goods under AANZFTA, exporters have the choice of testing their products under a CTC-based rule or an equivalent RVC-based rule. For some goods, only a single option applies. Exporters wishing to access the tariff arrangements agreed under AANZFTA will need to support their claim with a certificate of origin issued by a relevant industry body.

9. The key benefit of the "co-equal" approach is that it marries the objectivity of Australia's preferred CTC approach - there is a single, clear rule for each tariff line - with ASEAN's greater familiarity and comfort with the RVC-based approach. The agreement to adopt alternative approaches to ROO also provides additional flexibility for Australian exporters who may, for whatever reason, choose to export their goods under the RVC-based test.

10. The rules in this Chapter provide for regional cumulation - that is, where a good which complies with the origin requirements is exported by a Party for use as an input in the production of a good in another Party, the good will be treated as if it originated in the Party where the working or processing of the finished good has taken place. This recognises the increasing trend to global production chains in the region.

11. The Chapter includes provisions relating to a comprehensive set of issues relating to the determination of origin, including: methodology for calculating regional value content; minimal operations and processes which do not affect originating status; treatment of accessories, parts and tools; treatment of goods where only a small proportion of inputs fail to meet the relevant ROO (the so-called de minimus principle); treatment of packing materials and containers, and transport of goods through AANZFTA Parties and through third countries.

12. The Chapter also sets out procedures and requirements relating to the issuance of certificates of origin, including data requirements for applications and for the content of certificates. It also contains provisions relating to review and appeal of determinations of eligibility for preferential tariff treatment.

13. There are provisions for ongoing consultations aimed at ensuring effective administration of the provisions on ROO, and providing opportunity for review and amendment of the Chapter. The Chapter also provides for the establishment of a Sub-Committee, which, among other things, is required to commence a Review of Article 6 of the Chapter (which defines the operation of the cumulation principle) and the application of "chemical reaction" and other process-based rules between 12 and 18 months from entry into force of the Agreement.

14. The Annexes to the Chapter include the Schedule of Product Specific Rules in Annex 2 to the Agreement and an additional Annex and two Appendices relating to procedures and requirements for the issuance of Certificates of Origin.

15. For further information, see AANZFTA Fact Sheet - Rules of Origin.

Chapter 4: Customs Procedures

16. The Chapter on Customs Procedures establishes arrangements for expeditious, predictable, transparent and simplified customs administration aimed at facilitating trade among the Parties. In particular, the Chapter encourages procedures that facilitate the clearance of low-risk goods and the use of automated, electronic customs transactions.

17. The Chapter affirms that the customs value of goods is to be determined in accordance with the WTO Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (GATT) (Agreement on Customs Valuation). In addition the Chapter provides that, wherever possible, authorities will provide advance rulings to enable exporters to verify tariff classification, and seek rulings about the valuation and the origin of goods in advance of export. The Chapter also contains provisions relating to the assurance of protection of confidentiality of information provided by exporters.

18. The Chapter provides for the establishment of inquiry points and publication of all statutory, regulatory and administrative requirements, either on the internet or in print. There is also a requirement for Parties to ensure importers have access to administrative review within customs administrations or, where applicable, access to further administrative or judicial review of determinations.

Chapter 5: Sanitary and Phytosanitary Measures

19. The Chapter on Sanitary and Phytosanitary Measures affirms that such measures will continue to be applied in accordance with the Parties' rights and obligations under the WTO Agreement on the Application of Sanitary and Phytosanitary Measures. The Chapter contains provisions on arrangements aimed at strengthening information exchange, cooperation and consultation among the Parties. It also provides for the establishment of contact points and a Sub-Committee on Sanitary and Phytosanitary Measures to review progress in the implementation of the Chapter.

20. The dispute settlement provisions of the AANZFTA are not applicable to any matter arising under this Chapter.

Chapter 6: Standards, Technical Regulations and Conformity Assessment Procedures

21. The Chapter on Standards, Technical Regulations and Conformity Assessment Procedures affirms the Parties' rights and obligations under the WTO Agreement on Technical Barriers to Trade and provides for the establishment of arrangements for enhanced information exchange, cooperation and consultation among the Parties. The Chapter identifies a range of possible vehicles for giving effect to enhanced cooperation.

22. The Chapter also recognises the scope for Parties to enter into agreements or arrangements on regulatory matters as a means of facilitating trade, and encourages consideration of extending such arrangement to interested Parties. The Chapter provides for the establishment of contact points and a Sub-Committee on Standards, Technical Regulations and Conformity Assessment Procedures to monitor implementation of the Chapter, and to consider issues that may be raised by the Parties.

Chapter 7: Safeguard Measures

23. The Chapter on Safeguard Measures establishes arrangements for safeguard measures which may be applied during the transitional period, i.e. while tariffs are being reduced and/or eliminated. Safeguard measures may only be applied to the extent and for such time as may be necessary to prevent or remedy serious injury and to facilitate adjustment during the transitional period. The transitional period is defined as the period from entry into force of the Agreement until three years after the customs duty on a particular good is eliminated or reduced to its final commitment, in accordance with a Party's schedule of tariff commitments. There are limits on the length of time for which a safeguard measure may be applied (two years, with a possible extension for one year), and limits in respect of any repeat application of a safeguard measure. In addition, the Chapter sets out procedures and conditions for compensation or the suspension of substantially equivalent concessions by Parties affected by the application of transitional safeguard measures.

24. The Chapter also contains provisions relating to the level of tariffs that may be applied as safeguard measures, and minimum thresholds for the application of safeguard measures to imports from ASEAN Parties.

25. Provisions setting out procedures for notification, investigation, application of provisional safeguard measures, and review of measures mirror relevant provisions of the GATT Article XIX and the WTO Agreement on Safeguards. The Chapter also affirms the Parties' rights and obligations in relation to global safeguard measures applied in accordance with the WTO Agreement.

Chapter 8: Trade in Services

26. The Chapter on Trade in Services includes the substantive obligations relating to trade in services and each Party's Schedule of Specific Services Commitments in Annex 3 to the Agreement, including market access and national treatment; provisions on most-favoured-nation treatment and safeguards; and various regulatory disciplines and other obligations that will enhance certainty and transparency for Australian services exporters. The Chapter also contains two annexes which set out sector-specific obligations for financial and telecommunications services respectively.

27. The Chapter provides for a "positive list" approach to scheduling market access and national treatment commitments, where each Party identifies in its own schedule the services for which market access and national treatment apply, including the specification of any limitations to such access or national treatment. This approach, including the definition of "trade in services" with its four modes of services supply, is identical to the approach provided for under the WTO General Agreement on Trade in Services (GATS), with one exception. The exception is that a Party's commitments in relation to the movement of natural persons (mode 4) are set out in a separate schedule to the Movement of Natural Persons Chapter (mode 4 commitments) (see chapter 9 below). Each Party's Schedule of Specific Services Commitments therefore contain commitments only in relation to cross-border supply (mode 1); consumption abroad (mode 2); and commercial presence (mode 3).

28. Consistent with the GATS, the market access obligation requires a Party to specify in its Schedule any limitations on market access where it has undertaken commitments in a sector (e.g. limitations on foreign equity, restrictions on the organisational form of commercial presence, number of service suppliers or total value of services transactions or assets). The national treatment obligation requires that, in sectors where commitments have been undertaken, each Party shall accord to services and service suppliers of another Party treatment no less favourable than it accords to its own like services and service suppliers, subject to any specified conditions and qualifications. Like the GATS, there is also provision for a Party to make additional commitments relating to qualifications, standards or licensing matters. A Party may modify its specific commitments, subject to compliance with formal procedures for notification of, and consultation with, other Parties and, if necessary, compensatory adjustments.

29. Under the provision for consultations on most-favoured-nation (MFN) treatment, Australia has the right to request an ASEAN member country to extend to Australian services and to service suppliers any more favourable treatment that it accords to a third country in a future ASEAN-wide agreement. ASEAN member countries have the same right in relation to future bilateral and plurilateral FTAs to which Australia is a Party, except bilateral and plurilateral agreements involving Australia or New Zealand and one or more ASEAN member countries. The requested Party is obliged to enter into consultations, although whether it accedes to the request is a matter for negotiation. (Vietnam has also included in its Schedule of Specific Services Commitments an MFN commitment on the cross-border supply of higher education services, undertaking to extend any commitments that go beyond the AANZFTA made to a third country as part of future ASEAN-wide FTAs.)

30. The Chapter also provides that, pending the conclusion of multilateral negotiations under GATS on emergency safeguard measures, a Party may request consultations with another Party if it considers that implementation of the AANZFTA commitments has caused substantial adverse impact to a service sector. Any measure adopted as a result of these consultations must be mutually agreed between the Parties concerned. The operation of this provision will be reviewed upon conclusion of multilateral negotiations under GATS on emergency safeguard measures.

31. The Chapter provides for a review of commitments by Parties three years after entry into force of the Agreement, and periodically thereafter as determined by the FTA Joint Committee. The aim of these reviews is for Parties to further improve specific services commitments so as to progressively liberalise trade in services. The Chapter establishes a Committee on Trade in Services which is required, inter alia, to carry out these reviews of commitments, enter into discussions on the application of MFN, and to review the implementation of the Chapter.

32. The Chapter sets out a range of obligations on Parties that will enhance regulatory certainty and transparency for Australian services exporters. These are based upon equivalent GATS obligations, including in relation to domestic regulation (licensing and qualification requirements and procedures and technical standards) and transparency, although they go beyond the GATS in several areas. Key 'GATS-plus' regulatory obligations include requirements on Parties to:

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encourage competent bodies to enter into negotiations for recognition of professional qualifications, licensing and registration requirements and procedures;
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ensure that the use of business names under which service suppliers normally trade in their respective home country markets is not unduly restricted;
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publish measures of general application affecting trade in services on the Internet, to the extent possible;
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endeavour to provide interested persons of other Parties with a reasonable opportunity for comment prior to adoption of new measures;
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provide license applicants with an opportunity to remedy incomplete applications, status reports on the progress of applications on request, and reasons for the denial or termination of applications;
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observe minimum standards of procedural transparency, such as reasonable notice of administrative processes (e.g. licensing and rule-making in specific cases) and opportunities to present facts and arguments before final administrative action;
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afford services suppliers with a commercial presence certain post-establishment investment protections, as set out in the Chapter on Investment, including investor-state dispute settlement.

33. The Chapter contains two sector-specific annexes, covering financial services and telecommunications.

34. For further information, see Annex D: AANZFTA Services: Key 'WTO Plus' Gains.

Annex on Financial Services

35. In line with the GATS Annex on Financial Services, the AANZFTA Annex on Financial Services sets out certain rights and obligations on Parties that reflect the distinctive characteristics and systemic importance of financial sector regulation. These include exceptions for a Party in relation to measures taken for prudential reasons, to ensure the integrity and stability of the financial system, to ensure the stability of the exchange rate or to prevent deceptive and fraudulent practices. However, the AANZFTA Annex also contains obligations that go beyond the GATS Annex in relation to transparency, timely processing of licensing applications, and transfers and processing of information by financial service suppliers in the ordinary course of business.

Annex on Telecommunications

36. The Annex on Telecommunications builds on WTO rules (the WTO Telecommunications Reference Paper) in relation to major suppliers of telecommunications services that control essential facilities or have a dominant position in the market. Parties are required to prevent anti-competitive conduct and ensure that major suppliers provide interconnection, leased circuit services and co-location of equipment on reasonable, non-discriminatory terms and conditions.

37. The Annex also contains provisions on transparency, including in relation to licensing, and review of regulatory decisions. Regulators must be independent and impartial and must provide written explanation of regulatory decisions on request. Recognising that some ASEAN countries are still developing their telecommunications regulatory regime, Parties are permitted to delay the application of some obligations, according to a specified timetable (set out in an Appendix to the Annex).

38. For further information, see Annex D: AANZFTA Services: Key 'WTO Plus' Gains.

Chapter 9: Movement of Natural Persons

39. The Chapter on Movement of Natural Persons (MNP) provides a framework for commitments on the temporary movement of services suppliers, investors, goods sellers and other business persons engaged in regional trade and investment. Each Party has a Schedule of MNP Commitments in Annex 4 to the AANZFTA, setting out commitments on specific categories of natural persons, in accordance with its temporary entry regime. Commitments in relation to the movement of natural persons who are services suppliers (mode 4) are set out in each Party's MNP Schedule (mode 4 commitments), rather than in their respective Specific Services Commitments Schedule.

40. The Chapter contains obligations which require Parties to publish information on temporary entry requirements, process completed applications for temporary entry and stay promptly and to notify applicants, on request, about the status or outcome of the application. The Chapter preserves each Party's right to protect the integrity of its borders and to ensure the orderly movement of persons across them.

41. The Parties are obliged to endeavour to settle any differences arising out of implementation of the Chapter through consultations. Dispute settlement under AANZFTA is available where there has been a refusal to grant temporary entry, but only when: (a) the matter involves a pattern of practice and (b) the natural persons affected have exhausted the available domestic remedies regarding the particular matter.

42. For further information, see Annex E: AANZFTA Temporary Movement of Natural Persons (MNP): Key 'WTO Plus' Gains.

Chapter 10: Electronic Commerce

43. The Chapter on Electronic Commerce establishes a framework for regional cooperation and coordination on electronic commerce. Parties are obliged to maintain, or adopt as soon as practicable, domestic regulatory frameworks for electronic commerce that are based on relevant international standards, including in relation to electronic authentication of documents and transactions. Parties are obliged to publish regulatory measures relating to electronic commerce and respond to requests for information about such measures promptly.

44. The Chapter involves provisions on online consumer protection, online data protection and paperless trading. The Parties are to encourage cooperation in research and training activities that will enhance the development of e-commerce. Recognising that some ASEAN countries are still developing their regulatory regimes in this area, Parties are permitted to delay the application of some obligations, pending implementation of relevant domestic legislation. The Chapter is not subject to the AANZFTA's dispute settlement provisions (Chapter 17).

Chapter 11: Investment

45. The Chapter on Investment includes a range of obligations on Parties aimed at enhancing legal protection and certainty in relation to investment. The Chapter uses a broad, non-exhaustive, "asset-based" definition of investment covering every kind of asset owned or controlled by an investor, including, inter alia, shares, property, and business concessions conferred by law or contract, including any concession to search for, cultivate, extract or exploit natural resources.

46. The obligations are directed primarily at the post-establishment stage of investment. These include requirements on Parties to:

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apply fair and equitable treatment and full protection and security (the minimum standard of treatment at customary international law) to investments;
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ensure non-discriminatory treatment in relation to measures for investors that have suffered losses due to armed conflict, civil strife or states of emergency;
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allow funds of an investor relating to an investment to be transferred freely and without delay, subject to specified exceptions;
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ensure that any expropriation or nationalisation of an investment is only for a public purpose, applied in a non-discriminatory manner, is in accordance with due process of law and is accompanied by payment of prompt, adequate and effective compensation (the Chapter includes an Annex to elaborate the nature and scope of "indirect" expropriation).

47. There are detailed provisions on investor-state dispute settlement (ISDS) which provide that, where an investor alleges that a Party has breached specific obligations (including those mentioned in the previous paragraph) in such a way as to cause loss or damage, and it has not been possible to resolve the dispute by consultations, the dispute may be referred to international arbitration. Investor-state dispute settlement will not apply to investment screening or admission processes.

48. The Chapter provides for a work program to develop market access schedules, covering pre-establishment issues such as foreign equity limits, within five years of entry into force of the Agreement, subject to the agreement of the Parties. The development of these schedules will be based on a national treatment obligation and a two-annex "negative listing" approach to scheduling, set out in the chapter. The work program notes, inter alia, that further discussions between the Parties will take place on the application of MFN treatment and procedures for the modification of schedules.

49. The Chapter also contains provisions on transparency and performance requirements, which cover both the pre- and post-establishment stages of investment. The latter obligation prohibits a Party from adopting performance requirements that are inconsistent with the WTO Agreement on Trade-Related Investment Measures.

50. Australia's four bilateral investment treaties with ASEAN member countries (Indonesia, Laos, the Philippines and Vietnam) and the investment provisions of Australia's FTAs with Singapore and Thailand remain in force (i.e. are not superseded or terminated by AANZFTA). AANZFTA does not override existing investment agreements and makes it clear that, in the event of any inconsistency between the Agreement and existing investment agreements, Parties will immediately consult with a view to finding a mutually satisfactory solution.

51. For further information, see AANZFTA Fact Sheet - Investment.

Chapter 12: Economic Cooperation

52. The Chapter on Economic Cooperation records the agreement of the AANZFTA Parties to support implementation of the AANZFTA through economic cooperation activities that are trade or investment related as set out in a separate work program mutually determined by the parties prior to the entry-into-force of the Agreement.

53. The Parties are obliged to contribute to the implementation of the programme of economic cooperation activities ("the work program") taking into account their different levels of development and capacities. The work program is to be reviewed by the FTA Joint Committee to assess its overall effectiveness. The Chapter is not subject to the AANZFTA dispute settlement provisions.

54. For further information, see Annex F: AANZFTA Economic Cooperation.

Chapter 13: Intellectual Property

55. The Chapter on Intellectual Property (IP) reinforces the Parties' existing rights and obligations under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and builds on them in a number of areas.

56. The Parties are obliged to accord national treatment in relation to the protection of IP rights, subject to the exceptions provided for in the TRIPS Agreement and in multilateral agreements concluded under the auspices of the World Intellectual Property Organization (WIPO). The chapter contains a number of specific obligations on protection of intellectual property rights, government use of software and transparency. This includes an obligation on Parties to endeavour to make available on internet databases all pending and registered trade mark rights in their respective jurisdictions.

57. The Chapter contains detailed provisions for cooperation between the Parties to assist in the implementation of the chapter. These include the establishment of contact points in relevant government agencies, information exchange on infringement of IP rights, the promotion of IP education and awareness, promotion of efficiency and transparency in IP administration and registration systems, and the facilitation of responses to requests by Parties for technical assistance to enhance their respective national IP frameworks. The provisions also refer to cooperation to support any Party's accession to, and implementation of, specified international IP agreements, including the Patent Cooperation Treaty 1970 and Patent Law Treaty 2000; WIPO Copyright Treaty 1996, WIPO Performances and Phonograms Treaty 1996 and the TRIPS Agreement.

58. The Chapter also establishes a Committee on Intellectual Property to monitor the implementation of the chapter.

Chapter 14: Competition

59. The Chapter on Competition establishes a framework for cooperation in the promotion of competition, economic efficiency, consumer welfare and the curtailment of anti-competitive practices. The Chapter covers the establishment of contact points, exchange of information and experience on the promotion and enforcement of competition law and policy, and exchanges of officials between Parties for training purposes and to participate in advocacy programs. There is also provision for Australia and New Zealand to assist ASEAN member countries, if Australia deems appropriate, with the implementation of the Chapter, subject to appropriate identification of competition policy-related needs and availability of resources. The Chapter is not subject to the AANZFTA's dispute settlement provisions.

Chapter 15: General Provisions and Exceptions

60. The Chapter on General Provisions and Exceptions sets out a number of general provisions and exceptions which apply to some or all chapters of the AANZFTA. The WTO-style general and security exceptions specify that nothing in certain chapters of the AANZFTA precludes the adoption by a Party of certain measures, for example, to protect human, animal or plant life or health, as provided for in these exceptions. The Chapter also carves out application of the AANZFTA to a Party's taxation measures except where specifically intended, such as in certain disciplines under the Chapter on Investment. The Chapter also includes a WTO-style article allowing a party in serious balance of payments and external financial difficulties (or a threat thereof) to take restrictive measures in prescribed circumstances. The Chapter further includes a New Zealand-specific exception allowing New Zealand to take measures that it deems necessary to accord more favourable treatment to Maori including in fulfilment of its obligations under its Treaty of Waitangi, provided that such measures do not involve arbitrary or unjustified discrimination, or a disguised restriction on trade. There is also a general exception available to all AANZFTA Parties relating to 'creative arts' which can be exercised under prescribed circumstances.

Chapter 16: Institutional Provisions

61. The Chapter on Institutional Provisions establishes the FTA Joint Committee, consisting of representatives of the Parties, to oversee implementation and operation of the AANZFTA and supervise and coordinate the work of subsidiary committees. Unless the Parties otherwise agree, the FTA Joint Committee shall meet within one year after the AANZFTA enters into force, and thereafter as the Parties mutually agree, and as necessary to discharge its functions. The FTA Joint Committee reports to the ASEAN Economic Ministers (AEM) - Closer Economic Relations (CER) Trade Ministers consultations, through the related senior officials meetings (SEOM-CER). The Chapter also establishes contact points for each Party to facilitate communication on any matter relating to the AANZFTA. These contact points are additional to subject matter-specific contact points established in other chapters.

Chapter 17: Consultations and Dispute Settlement

62. The Chapter on Consultations and Dispute Settlement establishes a process for consultations and for settlement of disputes arising under the FTA. The Chapter does not apply to disputes arising under Chapter 5 (Sanitary and Phytosanitary Measures), Chapter 10 (Electronic Commerce), Chapter 12 (Economic Cooperation) and Chapter 14 (Competition). If a dispute arises on a matter under the FTA and under another international agreement to which the disputing parties are party (such as the WTO), the complaining party has a choice of forum. The Chapter sets out procedures and timelines for consultations on disputes arising under the FTA and for establishment, composition, proceedings and reports of arbitral tribunals. Time periods specified in the Chapter may be modified by mutual agreement of the Parties to a dispute.

Chapter 18: Final Provisions

63. The Chapter on Final Provisions governs the way in which AANZFTA operates as a treaty. The AANZFTA does not derogate from the WTO Agreement or other agreements to which the Parties are party, and Parties will consult in the event of any inconsistencies. In the event of an inconsistency between the AANZFTA and any other agreement to which two or more Parties are party, those Parties shall consult with a view to finding a mutually satisfactory solution. The Chapter provides that entry into force shall occur on or after 1 July 2009 provided that Australia, New Zealand and at least four ASEAN member countries have notified each other of completion of their internal requirements. The Parties have also agreed to conduct a general review of the AANZFTA in 2016.


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