China Australia Free Trade is only days away by FJT (Australia)

FJT LOGISTICS, your PANGEA Partners in Australia, would like to share with your below recent news as China Australia Free Trade is just days away.

Australia and China signed the Free Trade agreement in June this year.

Many goods imported from China will receive a reduction in the rate of duty payable, at the time of introduction many imported goods will be duty free, other goods will have phasing duty rates in place. The phasing rates will reduce to free over 3 or 5 years.

How it works.

For goods to qualify for preference they will need to meet the relevant rules of origin, these are:

• WO (Wholly Obtained) this rule requires that the goods wholly originate in China, this covers agricultural products grown in China, live animals born and raised in China, and minerals extracted in China.
• WP (Wholly Produced) this rule requires that goods are made only from materials that originate in China or Australia. This covers goods manufactured from Wholly Obtained materials.
• PSR (Product Specific Rules) this rule applies to goods manufactured in China that contain materials that have been imported into China (non-originating materials) and requires that the exported goods meet the product specific rules that apply to the exported product. These rules can be Wholly Obtained, CTC (Change of Tariff Classification) this requires that imported materials undergo a process of manufacture that results in a change in classification of those goods, RVC (Regional Value Content) this requires that the exported goods have a minimum percentage of value added content from within China. Specific Process of Production, this rule requires that non-originating materials undergo a specific processing operation within China.

The Australian Minister for Trade and Investment indicated that he and his Chinese counterpart were working towards a commencement date for ChAFTA of 20 December 2015. During the course of the DFAT (Department of Foreign Affairs and Trade) Trade Agreement Negotiations and Implementation meeting of Peak Organisations in Canberra on 8 December 2015 DFAT confirmed that Australia and China were to exchange “Diplomatic Notes” on the 9th of December 2015) with the intent that ChAFTA would then commence on 20 December 2015.

What it means for you as an importer:

It will deliver one tariff cut for 2015 on commencement with one to follow on 1 January 2016.

For importers, exporters, producers and FJT Logistics as licensed customs brokers and freight forwarders, it means a busy time. We will need to secure appropriate Certificates of Origin (CoO), possibly Advance Rulings, Declarations of Origin (DoO) and to arrange freight to take advantage of ChAFTA from its commencement.

Who are the Chinese authorised bodies for the purposes of ChAFTA?

​China’s authorised bodies are: AQSIQ (General Administration of Quality Supervision, Inspection and Quarantine) where the actual certificates will be issued by provincial Entry-Exit Inspection and Quarantine Bureaus, which are administered by AQSIQ; and the China Council for the Promotion of International Trade.

There are important issues regarding the shipping of goods to Australia through HK. This seems to have been remedied through the passage of a new regulation which states that so long as goods are transported from China through the “Customs Territory of HK” they are deemed to be subject to customs control and remain entitled to retain the status as China originating goods. However, other acts in relation to goods in HK can still cause those goods to lose their status as China originating goods so care must be taken. It is early days but please liaise with FJT if you have any questions. The issue of consignment of Australian originating goods from Australia to China through HK (or other “non – parties”) has yet to be resolved and is still a “work in progress”. That will cause issues for Australian exporters.

It is a difficult time of the year to work with the introduction of substantial changes, new documentation and other regulatory issues, all at a time when the focus for many is a well-earned break.

If you have any questions do not hesitate to contact us at FJT Logistics, we will help you work through the issues.

Pls. visit www.fjt.com.au for more information