Australia: China Free Trade Agreement: What's crucial for customs brokers?

Last Updated: 25 November 2014
Article by Russell Wiese and Lynne Grant

With the announcement that negotiations over the Australia China free trade agreement have concluded, your clients will be interested to discover how this new FTA will affect them.

Here, we provide guidance on common importer/exporter questions, and detail the steps you can take to help clients maximise the benefits of the FTA.


The actual commencement date of the FTA will remain unknown until shortly before it comes into force.

Following conclusion of negotiations, a number of steps need to be taken before the FTA can commence. Initially, the wording of the agreement needs to be finalised, approved and signed. The FTA will then be reviewed by a senate committee. Following this, enabling legislation will need to be introduced and passed by parliament.

Simultaneously, China will be undertaking its own treaty making process.

When both countries have completed their domestic processes there will be a diplomatic exchange of notes following which the FTA will come into force on a nominated date.

We recommend informing clients that a period of 9 – 12 months is usual for the implementation of an FTA. For example, negotiations over the Korea FTA concluded in December 2013 and the FTA has not yet commenced. Similarly, there was nine months between the end of negotiations over the Malaysia FTA and its eventual commencement.


While we do not have duty rates for each tariff line, we generally know that the majority of qualifying Chinese imports will be duty free.

By undertaking a review of your clients' past import data you can model the likely impact of the FTA. It may be that through the use of tariff concessions and duty free headings, little duty is currently paid on your client's Chinese imports.

If this modelling reveals significant duty currently being paid on Chinese goods, rather than waiting for the FTA to come into force, you should consider what steps you can take now to reduce that duty, such as tariff concession orders (TCO).


Many exports from China are already duty free through the use of TCOs. Where there is a high level of certainty that a TCO applies, it is often better to rely on the TCO than the FTA. We say this because with a TCO you are in possession of the knowledge to determine eligibility.

With FTAs you are relying on the information provided by the manufacturer. Further, using FTAs involves the red tape of having to obtain origin documentation.

An individual assessment must be undertaken in each case.

Australian Customs is currently being particularly strict regarding the use of TCOs. Depending on the breadth of the TCO and the nature of the imported goods, it may be safer to rely on the FTA. If there is doubt, please contact us to discuss.


Your clients may not understand that qualifying for the FTA requires more than just exporting goods from Australia or China. Your clients need to appreciate that the rules of origin can be complex. This is one of the main reasons that FTAs are underutilised by Australian importers and exporters.

While product specific rules are not yet known, our view is that the rules under the Japan and Korean FTAs are good guides. If your client's goods clearly exceed the requirements of those FTAs, it is very likely that they will qualify under the China FTA.

Where there is a local content test, now is a good time to work with the Chinese supplier or Australian producer to assess the qualifying content level. If the qualification is on the borderline, your client can use the next 6-9 months to look at the possibility of increasing local content.

Australian importers often report that foreign suppliers (usually related parties) will not prioritise the assessment of whether goods qualify for an FTA to which Australia is a party.

To help with that discussion we recommend using past import data to estimate annual savings that could be achieved through utilising the FTA. This will often present a more compelling case than by reviewing the saving on an import by import basis.


As you are aware, all FTAs include provisions regarding whether indirect shipments will lose their preferential status.

For some clients it will be immediately apparent that this is an issue. For others, we recommend reviewing the port of loading for goods stated to be of Chinese origin. Where shipments are not direct you should be discussing this with your client now.

It may be the case that the supply chain cannot be altered; however, this should not be assumed. Modelling the costs of losing preferential treatment under the FTA will help your client to determine whether direct shipment should be considered.


For some exporters, navigating Chinese Customs is a more significant barrier to trade than customs duties. The FTA will include a chapter on customs procedures, the effectiveness of which will depend on the attitude of the individual Chinese ports.

Our view is that mutual recognition under the proposed Trusted Trader Program is likely to have a bigger trade facilitation impact than the FTA.

In Customs' recent annual report they noted that they are undertaking a Chinese mutual recognition feasibility study. If Chinese clearance is an issue, we recommend that you assist your exporting clients to now start preparing for the proposed Trusted Trader Program. This involves self-assessing customs compliance and security of the supply chain.


Dumping duties can have a far greater impact on some importers than customs duties. Unfortunately for those importers there will be no relief with the introduction of the FTA.

Almost all FTAs provide that each country can still impose dumping duties.

Your clients who are affected by dumping duties should be regularly assessing whether there is still an Australian industry producing the imported goods, or encouraging the Chinese exporter to seek a current assessment of whether the dumping margin is still correct.


A lot will happen between now and implementation of the FTA. By staying on top of these developments you will continue to be able to provide the best assistance to your clients.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Russell Wiese
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.