• Australia and the United States agreed to eliminate customs duties on almost all automotive products from the day the agreement entered into force.
• The United States’ 2.5 per cent duty on passenger motor vehicles, the 25 per cent tariff on light commercial vehicles and tariffs on auto parts and accessories exports were immediately eliminated.
• Australian duties on passenger motor vehicles will be phased, to zero in 2010.

Summary

The United States agreed to remove, from day one, all tariffs on automotive products.   For most automotive products, US tariffs were generally low. Australian tariffs on finished passenger motor vehicles are being phased out by 2010.

Australia's tariffs on all other automotive goods, in particular car parts and commercial vehicles, were eliminated from day one of the Agreement.

Gains for Australia

The United States is the largest market in the world for autos and auto parts.   The AUSFTA assists with the integration of Australian manufacturers into the US market.   Though US tariffs on automotive parts are relatively low, their removal will provide Australian manufacturers with an edge against competitors from other US import markets in an industry where margins are slim.