Jill Hall (Shortland, Australian Labor Party) Share this | Hansard source

The Customs Amendment (Australia-Chile Free Trade Agreement Implementation) Bill 2008 and cognate bill are very important pieces of legislation. On 30 July 2008 Australia and Chile signed the Australia-Chile Free Trade Agreement. The Australia-Chile FTA is expected to commence on 1 January 2009 and will provide Australia and Chile with, among other things, preferential access to each other’s goods. To give effect to the agreement, Customs will need to arrange for amendment of the Customs Act 1901 and the Customs Tariff Act 1995 and for the creation of regulations.

The Customs Amendment (Australia-Chile Free Trade Agreement Implementation) Bill contains amendments to the Customs Act 1901 to introduce rules for determining whether goods originate in Chile and the requirement for Australian producers and exporters to keep and present to Customs records associated with the origin of the goods exported to Chile under the Australia-Chile Free Trade Agreement and to answer questions from Customs in relation to these goods.

The agreement was considered by the Joint Standing Committee on Treaties, and I fully support the report that was tabled in the House by the committee. We considered a number of issues when we looked at the agreement, and it was the feeling of the committee that the agreement should be supported. Some concern was expressed about horticultural matters—and I think the previous speaker referred to those concerns—but overall it was felt that the agreement would be quite beneficial to Australia. One concern was that the Australian market would be flooded with goods from Chile. It was felt that this was one area that needed to be watched very carefully. However, on the balance of trade and the benefits that would come to Australia, it was decided that it was well and truly worth while for Australia to enter into this agreement.

The free trade agreement is a comprehensive and wide-ranging agreement that provides for Australia and Chile to have much more liberal access to each other’s goods and services. The agreement reaffirms the close relationship between Australia and Chile. I see the member for Isaacs to my left; he has a very close relationship with Chile, given that his wife is Chilean. Earlier, he was espousing to me the virtues of Chile. The relationship between our two countries will flourish with this agreement. It will contribute to greater growth, prosperity and security in the region. It will be a great breakthrough for both countries.

In order to implement the agreement, two pieces of legislation require amending: the Customs Act 1901 and the Customs Tariff Act 1995. The Customs Amendment (Australia-Chile Free Trade Agreement Implementation) Bill contains proposed amendments to the Customs Act 1901. These amendments provide rules for determining whether goods originate in Chile, and introduce powers to allow Customs to obtain manufacturing records from Australian exporters and producers. The amendments will give effect to Australia’s obligation under chapter 4 of the Australia-Chile FTA. Chapter 4 provides the rules for determining whether goods originate in Australia and whether goods originate in Chile. The rules are essential in determining whether goods imported from Chile are eligible for preferential customs rates under the agreement. I feel that this agreement, properly entered into with the right spirit from both countries, will really benefit both countries.

The bill will be complemented by the Customs Tariff Amendment (Australia-Chile Free Trade Agreement Implementation) Bill 2008. Goods will be considered to originate in Chile for the purpose of providing a preferential duty rate if they are wholly obtained or wholly produced in Chile or if they meet the product-specific rules of annex 4-C of the agreement. The product-specific rules use the ‘change in tariff classification’ concept, as used in previous Australian free trade agreements. Under the changes in tariff classification rules, as I said, origin will be conferred on a product where the tariff classification of the non-originating material—in this case, material from outside Chile and Australia used in the manufacture of the product—is different from the tariff classification of the goods. The rules are a means of demonstrating that there has been a substantial transformation of the non-originating material inputs, so it looks at the materials as well as the product. Customs will also have the power to obtain manufacturing records of Australian exporters and producers to verify that the goods that they export to Chile were produced in Australia.

Overall, I believe that there are safeguards in this legislation that will ensure that this agreement works and works well. I think that the treaties committee, as I mentioned, examined all aspects of this treaty, and I am very, very confident that the legislation will ensure that the agreement between our two countries operates and operates effectively.

See this speech in context