The Australia-United States FTA is celebrating its 10th anniversary. It came into force on 1 January 2005. The trade agreement was with the world’s largest economy which is also the most significant merchandise and services exporter / importer. The FTA aimed to improve Australia’s growth and competitiveness, the attractiveness of Australia to the USA as an investment destination and strengthen trade relations as well as promote economic integration with the USA across multiple sectors.
What were the effects for Australian exporters and importers, and the impact on sea freight from USA to Australia? What has been the outcome of the AUSFTA so far?
In this post we take a look at what the AUSFTA has produced so far and the changes and additional benefits that were introduced at the beginning of this year.
What have been the effects of the Australia-United States Free Trade Agreement for Australian exporters?
Major duty reductions and benefits have been achieved for Australian exporters.
The Merchandise Processing Fee on all imports was waived by the USA, which in total was estimated to result in US$10 million savings a year for the Australian industry.
Australia furthermore received access to the US Federal Government procurement market, with a market value of more than US$535billion in 2011.
What have been the effects of the Australia-United States Free Trade Agreement for Australian importers?
The industry sectors most effected by the FTA are:
- farmers & food processors
- service providers
- miners & metal producers
- creative industry
Overall duties were dropped up to 100% for many products from the above named sectors. For more details please visit the DFAT website. The complete document can be accessed here.
What are the outcomes of the past 10 years?
In 2013 alone, the US invested in total more than A$657 million, compared to Australia’s investments of A$471 in the US. Overall A$54.8 billion had been traded with Australia.*
When the FTA was set up the overall opinion was rather restrained. Several studies showed an expected small impact on the Australian economy and a few studies anticipated a negative outcome.**
Overall it was expected that there were going to be winners and losers. Looking back we can say, importers/exporters of the commodities covered by the FTA did have positive outcomes and sea freight from USA to Australia was impacted by that.
Additional benefits since 1 January 2015
From 1 January 2015 the following changes have taken effect.
All US tariffs on the following products were removed:
All Australian tariffs on the following products were removed:
- bedding and similar furnishings
- surgical materials
- increase of the duty free tariff quotas for Australian beef, dairy, tobacco, cotton, peanuts, avocados
- reduction in over-quota tariffs for Australian exports of beef, goya cheese, tobacco, cotton, peanuts, avocados
The implementation of the Australia-United States FTA is still in progress and has not been completely rolled out yet. The full implementation of the FTA is planned for 2022 (with the exemption of sugar and out-of-quota dairy).
Are you frequently importing or exporting to the USA? For further advise please contact the BCR Customs Consultancy experts.
For more than a century, BCR has continued to help small, medium and large businesses achieve an optimum logistics solution with warehousing and transportation, including air freight and sea freight services to and from the major ports including Brisbane, Sydney, Melbourne, Adelaide and Fremantle (Perth).