House Of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Immigration and Border Protection the Honourable Peter Dutton MP)

Outline

The purpose of the Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015 (the Bill) is to amend the Customs Act 1901 (the Customs Act) to introduce new rules of origin for goods that are imported into Australia from China to give effect to the China-Australia Free Trade Agreement (the Agreement). The Customs Act amendments will enable goods that satisfy the rules of origin to enter Australia at preferential rates of customs duty.

Complementary amendments will also be made to the Customs Tariff Act 1995 (the Customs Tariff Act) by the Customs Tariff Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015 to give effect to the Agreement.

The Agreement is a comprehensive and wide-ranging agreement that provides China and Australia with more liberal access to each other's goods, services and investment markets.

Formal talks between the Governments of Australia and China to establish a Free Trade Agreement between the two countries began in 2005. These negotiations concluded in early November 2014.

Following finalisation of the text, the Agreement was signed in Canberra on 17 June 2015 and the Agreement was tabled on the same day.

In close consultation with the Government of China, the Australian Government is working towards entry into force of the Agreement before the end of 2015 in order to maximise the business gains for both Parties.

To give effect to the preferential entry of goods under the Agreement, the amendments contained in this Bill provide rules for determining whether goods are Chinese originating goods. The amendments to the Customs Tariff Act will provide for the preferential entry of goods that meet those rules.

The amendments contained in this Bill also impose obligations on exporters of Australian goods to China and for which a preferential rate of duty will be claimed, and on people who produce such goods.

The amendments contained in this Bill will be operative the later of the day on which this Act receives the Royal Assent and the day on which the Agreement done at Canberra on 17 June 2015 enters into force for Australia.

In view of the Parliamentary sitting schedule, the benefits to Australian businesses of a double cut to tariffs on exports to the territory of China should the Agreement enter into force before the end of the year, and the importance to the Parliament and the community of seeing the changes that are required to be made under this Agreement, the Government has decided to introduce the implementing legislation before the Joint Standing Committee on Treaties has issued its report in relation to the Agreement.