Australia-United States Free Trade Agreement

KEY OUTCOMES

Overview

Australia now has the opportunity to more closely integrate its economy with the United States through increased trade and investment links.

Agriculture

Two thirds of all agricultural tariffs - including in important commodities such as lamb, sheep meat and horticultural products, were eliminated immediately
- a further 9 per cent of tariffs were cut to zero in 2008.
- AUSFTA provides greater access to the US market for two of Australia's key agricultural export industries, beef and dairy.

Australia's quarantine and food safety regimes, which ensure our health and our environment are protected, are not affected by the Agreement.

Manufacturing

Duties on more than 97 per cent of US non-agricultural tariff lines (excluding textiles and clothing) became duty free from day one of the Agreement.
Tariffs on textiles, some footwear and a handful of other items will be phased out, with all trade in goods free of duty by 2015.
A mechanism to address non-tariff barriers was established.

Services

Access to US markets has been locked in for Australian service suppliers such as providers of professional, business, education, environmental, financial and transport services
A framework to promote mutual recognition of professional services has been developed - which has led to Australian lawyers being allowed to provide services in Australian law in Delaware and Australian engineers gaining a temporary practise right in Texas.

Financial services

Australia's financial sector will reap the benefits associated with financing the increased trade in goods and services flowing from the Agreement.
Future access for Australian financial services providers to the world's largest financial market is assured through the Agreement guaranteeing that any future US liberalisation in this sector cannot be reversed.
Australia and the US agreed to jointly consider a number of issues regarding the closer integration of our financial sectors.

Government procurement

The US federal government procurement market, worth at least US$415 billion annually, and that of 31 state governments are now open to Australia.
Australia has a waiver from many US programs favouring US firms and products.
Australian preferences for small businesses and indigenous people remain in place.

Intellectual property

Australia's IP laws will be substantially harmonised with the world’s largest intellectual property market, and a global leader in innovation and creative products.
Australia's international reputation as one of the world's leading countries in protecting and enforcing intellectual property rights has been reinforced.
Standards of intellectual property protection are beyond those provided by multilateral agreements such as the WTO TRIPS agreement and WIPO Treaties.

Investment

The Agreement provides a strong framework to promote high levels of two-way investment between Australia and the US.
There is no investor-state dispute settlement provision in the Agreement.
The Agreement preserves Australia's foreign investment policy, but with a includes changes that maintain our ability to screen all investment of major significance.

Health

Access by Australians to affordable medicines under the PBS has been maintained under the AUSFTA.
The Agreement reinforces Australia's existing framework for intellectual property protection of pharmaceuticals.

Audio-visual

The Agreement protects our right to ensure local content on Australian media, and retains the capacity to regulate new and emerging media, including digital and interactive TV.
AUSFTA ensures that there can be Australian voices and stories on audiovisual and broadcasting services, now and in the future.

Automotive

Australia and the United States agreed to eliminate customs duties on almost all automotive products from the day the agreement enters into force.
The 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 out, to zero in 2010.

Competition

The Agreement ensures that Australia and the United States continue to cooperate on competition law and policy.
Businesses and individuals are to be treated fairly in enforcing competition law.
Consumer protection agencies will work together in combating illegal activity.
Consumers and investors defrauded or deceived now have greater redress.

Telecommunications

The Agreement ensures the maintenance of pro-competitive regulatory frameworks for Australian and US companies, high standards of transparency and WTO-plus rules on major suppliers.
AUSFTA provides a new avenue for consultations with the United States on market access and embraces a market-based regulatory approach .

E-commerce

AUSFTA recognises the importance of there being no barriers to trade conducted electronically.
Australia is still be able to regulate for public policy purposes.
Trade and investment is encouraged by facilitating electronic commerce.

Rules of origin

Simple and objective tests apply to rules of origin for manufactured products, which must be substantially transformed in either Australia or the United States before they can benefit from the Agreement.
The Agreement applies the change of tariff classification approach, with a straightforward method of claiming origin that does not require obtaining a certificate of origin.

Sanitary and Phyto-sanitary measures

The integrity of Australia's quarantine regime and our right to protect animal, plant, and human health and life are preserved.
Decisions about market access on quarantine or food safety grounds will continue to be made on the basis of science.
A framework for discussions on specific products has been established.

Technical Regulations and Standards

Australian exporters now have greater opportunities to understand and meet US requirements dealing with technical regulations and standards.
A framework for exporters to work with government in tackling barriers has been established.

Environment & labour

The Parties agreed not to fail to enforce their own environmental and labour laws in a manner affecting trade between the Parties.
Both Parties retain the right to establish their own domestic environmental and labour standards, and to adapt or modify their own laws.