Bob Debus (Macquarie, Australian Labor Party, Minister for Home Affairs) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I am pleased to introduce this bill, which is the implementing legislation for the Australia-Chile free trade agreement.

The agreement negotiations were concluded on 27 May 2008 by the Minister for Trade, Simon Crean, and the Chilean Foreign Minister, Alejandro Foxley, with the agreement being signed by the Minister for Foreign Affairs, Stephen Smith, and Alejandro Foxley on 30 July 2008, during Mr Foxley’s visit to Australia.

The Australia-Chile free trade agreement is expected to enter into force on 1 January 2009. The agreement is a comprehensive and wide-ranging agreement that provides Australia and Chile with more liberal access to each other’s goods and services. The agreement reaffirms the close relationship between Australia and Chile and will contribute to greater growth, prosperity and security in the region.

In order to implement the agreement, two pieces of legislation require amendment—the Customs Act 1901 and the Customs Tariff Act 1995.

The Customs Amendment (Australia-Chile Free Trade Agreement Implementation) Bill 2008 contains proposed amendments to the Customs Act 1901. These amendments provide the 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 obligations under chapter 4 of the Australia-Chile free trade agreement. That chapter provides the rules for determining whether goods originate in Australia or Chile. The rules are essential for the purposes of determining whether imported goods from Chile are eligible for preferential customs duty rates under the agreement.

This 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 purposes 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 change in tariff classification rules, origin will be conferred on a product where the tariff classification of each non-originating material—in this case, a material from outside Chile and Australia—used in the manufacture of the product is different from the tariff classification of the good. The rules are a means of demonstrating that there has been substantial transformation of the non-originating material inputs.

For certain goods, the change in tariff classification rule is combined with a regional value content. Customs will 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.

The bill I introduce today will reinforce the contribution of both countries to the multilateral trading system and serve as a model for other APEC economies as they work towards deeper economic integration.

Debate (on motion by Mr Lindsay) adjourned.