Member countries have agreed on a Protocol that will amend the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA).
The Protocol was signed on behalf of New Zealand by the Minister of Trade along with other AANZFTA Parties on 26 August 2014 at the 19th ASEAN Economic Ministers – Closer Economic Relations (Australia and New Zealand) Consultations in Nay Pyi Taw, Myanmar.
The changes contained in the Protocol are designed to make AANZFTA more business-friendly, transparent and improve administrative efficiency.
The Protocol does not change any of the preferences under the Agreement but introduces new procedures to ensure that administrative revisions are expedited in an efficient manner, removes some unnecessary information requirements and streamlines the presentation of the product specific rules of origin to make the Agreement more user-friendly for business.
AANZFTA was signed in 2009 and entered into force for New Zealand in 2010. Early in the implementation of AANZFTA, a number of inefficiencies were identified by the AANZFTA Parties, including traders.
The Protocol addresses these issues, which include:
- the unnecessary disclosure of potentially sensitive commercial information on Certificates of Origin where that information had no relevance to the claim for preference;
- the difficulty locating the appropriate rule of origin to determine whether a good is eligible for preferential duty rates;
- the inability to modify the requirements for information on a Certificate of Origin as needed, without going through a full treaty change process; and
- challenges faced by some parties to complete tariff and Product Specific Rules of Origin (PSR) transposition.
The Protocol makes four core amendments:
- Removal of the requirement for exporters to include the Free on Board (FOB) value of goods on Certificates of Origin when not using a value based rule to claim preference;
- Removal of the ‘general rule’ for rules of origin in favour of a consolidation of PSRs for all products in a comprehensive Annex;
- Removal of the List of Data Requirements (Certificate of Origin content) from the treaty text, so that the list is easier to amend; and
- Establishment of procedures to be followed to expedite future transpositions of the tariff and Product Specific Rules (PSRs) schedules following changes World Customs Organization Harmonised System (HS) tariff classification.
Although the Protocol has been signed, parties are continuing to work through the necessary implementation requirements to enable the Protocol to enter into force. This is likely to include some minor changes to the Certificate of Origin.
Parties aim to complete these negotiations by early 2015, and hope to bring the Protocol into force shortly after.
The Protocol will now undergo New Zealand’s treaty examination process, which involves the examination of the Protocol by Parliament’s Foreign Affairs, Defence and Trade Select Committee. This will occur once a new Parliament is called after the September 2014 election.