Commonwealth Numbered Regulations - Explanatory Statements

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CUSTOMS (AUSTRALIA-US FREE TRADE AGREEMENT) AMENDMENT REGULATION 2012 (NO. 1) (SLI NO 8 OF 2012)

EXPLANATORY STATEMENT

Select Legislative Instrument 2012 No. 8

Issued by the Authority of the Minister for Home Affairs

Customs Act 1901

Customs (Australia-US Free Trade Agreement) Amendment Regulation 2012 (No. 1)

Subsection 270(1) of the Customs Act 1901 (the Act) provides, in part, that the

Governor General may make regulations not inconsistent with the Act prescribing all matters which by the Act are required or permitted to be prescribed or as may be necessary or convenient to be prescribed for giving effect to the Act or for the conduct of any business relating to Customs.

The amending Regulations amend the Customs (Australia-US Free Trade Agreement) Regulations 2004 (the Principal Regulations) to incorporate changes made to Annex 4-A of the Australia-US Free Trade Agreement (AUSFTA Agreement) as a result of negotiations between Australia and the United States.

The AUSFTA Agreement entered into force on 1 January 2005 and is a bilateral trade agreement between Australia and the United States (US) designed to increase trade liberalisation and facilitate investment between Australia and the US.

Schedule 2 to the Principal Regulations incorporates the Product Specific Rules for textiles and apparel (PSRs) set out in Chapter 4 and Annex 4-A of the AUSTFA Agreement.  

Under the current PSRs for goods classified under tariff headings 5501-5511, yarn made from viscose rayon fibres is eligible for preferential tariff treatment as an originating good if the viscose rayon fibres used to produce the yarn are sourced from Australia or the US.  

However, viscose rayon fibres are no longer produced in either country. This means that yarn made from viscose rayon fibres is not able to achieve status as an originating good under the current PSRs. Consequently, Australia and the US cannot take advantage of the potential benefits of the AUSTFA Agreement.

Following negotiations between Australia and the US, Annex 4-A (Textile or Apparel Specific Rules of Origin) of the AUSTFA Agreement was amended through an Exchange of Letters, to address this shortcoming.

The amending Regulations replace the existing PSR for tariff headings 5501-5511 with three new PSRs for goods classified under these same tariff headings.

The PSR for goods classified under tariff heading 5510.90 enables both Australia and the US to provide preferential tariff treatment for yarns classified to this tariff heading regardless of the country of origin of the viscose rayon fibres used to produce that yarn. 

The PSRs for goods classified under tariff headings 5501.10 to 5510.30 and 5511 remain unchanged.

The amending Regulations implement domestically the agreed changes to Annex 4-A of the AUSTFA Agreement, by deleting the existing PSR for tariff headings 5501-5511 and replacing them with PSRs for goods classified under tariff headings 5501.10-5510.30, 5510.90 and 5511.

These amendments result in potential savings for manufacturers and reduced prices for consumers.

Consultation was undertaken with Industry in relation to the changes to Annex 4-A of the AUSFTA Agreement, resulting in the amendments to the Principal Regulations. Specifically, an Australian producer of goods classified under tariff heading 5510.90 requested the amendments to the AUSFTA Agreement to allow goods produced by them to achieve status as an originating good. 

The amending Regulations have no adverse impact on Industry as they implement Australia's international obligations under the AUSFTA Agreement.

The amending Regulations do not raise any human rights issues. See the Statement of Compatibility at Attachment A.

The amending Regulations commence on the day the amendments to Annex 4-A to the AUSFTA Agreement, agreed to in 2010, enter into force.  This day will be notified in the Gazette.

ATTACHMENT A

Statement of Compatibility with Human Rights

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

Customs (Australia-US Free Trade Agreement) Amendment Regulation 2012 (No. 1)

This legislative instrument 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 Regulation

This legislative instrument makes technical amendments to the Customs (Australia-US Free Trade Agreement) Amendment Regulations 2004, to incorporate proposed amendments to Annex 4-A of the Australia-US Free Trade Agreement (AUSFTA Agreement).

None of the amendments make any substantive changes to the law.

The Regulations commence on the day the amendments to Annex 4-A to the AUSFTA Agreement, agreed to in 2010, enter into force.  This day will be notified in the Gazette.

Human Rights implications

This legislative instrument does not engage, impact on or limit in any way, the human rights and freedoms recognised or declared in the international instruments listed in the definition of human rights at section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Conclusion

This legislative instrument does not raise any human rights issues.

Minister for Home Affairs

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