How to take advantage of free trade agreement tariff rates

Australia's free trade agreements (FTAs) reduce tariffs – the taxes and duties that businesses pay on the goods they import or export.

But businesses don't always get the tariff cuts associated with FTAs automatically. To get these tariff cuts, there are a few steps exporters and importers of goods need to follow in order to prove the product they're exporting or importing originates in one of the countries in the FTA.

The following explains the steps involved and where to go for more information and assistance.

Step 1: Check the FTA Portal to see what tariffs apply (if any)

A lot of international trade already occurs without tariffs being applied, so you should first determine if these FTAs cut the tariff that usually applies to your product. Traded products are classified using an internationally-recognised system known as the Harmonised Commodity Description and Coding system, or 'HS code'.

Using DFAT's FTA Portal type in key words about your product (or HS code if you already know it) and the FTA partner country to which you are exporting. The Portal will provide guidance on the different trade agreements available between Australia and the country you have selected, as there may be more than one.  It will show you the default tariff rate if the good is traded outside of any FTA, and the likely applicable tariff rates under any available preferential FTAs. You will also see the Product Specific Rule that applies under each FTA, and what type of documentation may be required to prove the origin of your good (Step 2 below).

Note: the FTA Portal is intended as a guide only. Ultimately, the decision around the HS classification of the good and the tariff rate that will apply is made by the importing country's customs authority.

Step 2: Assess if your product meets the FTA's rules of origin

Once you've searched and found your product on the Portal, click on the 'Rules' tab. Scroll down and click on the FTA you'd like to use. Then answer a few simple questions to determine whether your product is likely to meet the rules of origin requirements of the FTA you're planning to export under.

Step 3: Get a certificate or declaration of origin to accompany your goods

Once your assessment is complete, click on the Summary tab. Under the Certificate of Origin column, you will see whether a Certificate of Origin (COO) or Declaration of Origin (DOO) is required for each applicable FTA. (Different FTAs require different processes for obtaining a COO/DOO. Most commonly, businesses obtain certification through an authorised certifying body (COO); some FTAs also allow for an importer, exporter or producer to make a Declaration of Origin (also known as a DOO or DO)).

Once you have chosen which FTA you will use, click on the 'Certificates of Origin' tab of the Portal and select the FTA you'd like to export under. The information provided under each individual FTA on this page provides guidance specific to that FTA on the type of proof of origin (e.g. COO, DOO) required.This document will identify the goods you are exporting and certify that they meet the FTA's rules of origin requirements. It will be used (when the good arrives) by the importing country's customs authority to determine eligibility for preferential tariff treatment.

For more information on obtaining a COO from an authorised body: How to obtain a Certificate of Origin

Step 4: Ensure that you are in a position to provide evidence that your product meets the FTA's rules of origin

FTA partners' customs authorities have the right to seek documentary evidence that your good qualifies for preferential tariff access under the FTA. Documentary evidence of origin will vary depending on the complexity of your product. While a DOO does not require the issuance of a formal preferential Certificate of Origin, it still requires the same documentation to be retained and available for verification if requested by an importing customs authority.