Overview on Claiming Preferential Treatment Under The U.S.-Australia Free Trade Agreement
The U.S.-Australia Free Trade Agreement (UAFTA) entered into force on January 1, 2005. As a result, import duties on more than 99 percent of tariff lines covering qualifying industrial and consumer goods have been eliminated. Import duties on other manufactured goods will be phased out over periods of up to 10 years. The following is a brief overview on how importers and exporters can determine the duty rates applicable to their products.
Rules of Origin
In order to take advantage of the benefits for U.S. goods under the UAFTA, exporters and importers will need to understand how to determine that their goods are "originating," that is, qualified for preferential duty treatment under the UAFTA Rules of Origin. The UAFTA Rules of Origin were modeled upon previously negotiated free trade agreements. There are, however, some important differences, which require close attention. The UAFTA rules of origin can be found at the following link:
www.ustr.gov/assets/Trade_Agreements/Bilateral/Australia_FTA/Final_Text/asset_upload_file665_3424.pdf.
On December 30, 2004, U.S. Customs and Border Protection (CBP) issued a memorandum summarizing how U.S. importers can claim benefits for qualifying Australian goods under the UAFTA. The memorandum, in MS-Word format, can be accessed at the following link: www.customs.gov/linkhandler/cgov/import/international_agreements/autrade.ctt/autrade.doc.
The U.S. International Trade Commission (USITC) has modified the 2005 edition of the Harmonized Tariff Schedule of the U.S. (HTSUS) to reflect the changes made as a result of the tariff reductions set forth in the UAFTA. Items eligible for duty-free treatment are designated in the HTSUS by the code "AU" in the "Special" sub column. The complete HTSUS can be found at the ITC's Web site at www.usitc.gov/tata/hts/bychapter/index.htm. For items that are not eligible for duty-free status immediately, the staged reduction schedule (contained at Appendix 2B of UAFTA) can be found at the following link:
www.ustr.gov/assets/Trade_Agreements/Bilateral/Australia_FTA/Final_Text/asset_upload_file455_3421.pdf.
1. USTR has posted the Australian version of the UAFTA Tariff Schedule on its Web site at: www.ustr.gov/assets/Trade_Agreements/Bilateral/Australia_FTA/Final_Text/asset_upload_file737_3420.pdf.
The document codes each line item with a letter, indicating the staging by which the current tariff for each item is reduced and ultimately eliminated. The key to the staging categories can be found in the General Notes to the Australian Tariff Schedule, which can be found at: www.ustr.gov/assets/Trade_Agreements/Bilateral/Australia_FTA/Final_Text/asset_upload_file828_3419.pdf.
The Australian tariff schedule also notes the base rate of customs duty, which is used to determine the starting point and interim rate at each stage of reduction for an item.
2. While Australia has not yet updated their version of the HTS to reflect the changes made by the UAFTA, Australia Customs has posted a document on their Web site indicating the duty rates applicable to U.S.-origin goods at www.customs.gov.au/site/page.cfm?u=4273 (see schedule 5 at the bottom of the page).
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