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Textiles, Clothing and Footwear-Overseas Tariff Rates Facing Australian
Exports
Tas Luttrell
Foreign Affairs, Defence and Trade Group
29 September 1997
The Government recently announced its decision on levels of tariff protection
for the Textiles, Clothing and Footwear (TCF) industry sectors after 2000.
It was announced that tariff reductions would continue until 1 July 2000
but rates would then remain unchanged until 1 January 2005, when a further
reduction would occur.
A central part of the debate before that decision and the earlier Automotive
Industry decision, was the question of tariff protection facing Australian
exports of similar products.
One line of argument which emerged was that Australia should pause in
its tariff liberalisation process and make future reductions in protection
contingent on clear progress toward liberalisation by its trading partners.
It was claimed that Australia still faced very high levels of protection
in export markets and that further reductions in tariff protection would
leave Australian TCF industries exposed to unfair competition from countries
which were not lowering their protection.(1)
It was also suggested that high duty rates applying in the United States
and the European Union made Australia more vulnerable to competition products
from low-cost countries such as China seeking markets.
A distinctive feature of the TCF industries has been the high levels
of tariff and quota protection applied in many countries. The replacement
of the General Agreement on Tariffs and Trade (GATT) by the World Trade
Organization (WTO), reductions in protection levels agreed upon in the
Uruguay Round negotiations and the liberalisation in trade promised through
APEC(2), however, have begun to change that image.
In the 1997 Trade Outcomes and Objectives Statement in February, the
Minister for Trade noted that when the Uruguay Round agreements are fully
implemented (by 1 January 2005), about 68 per cent of Australia's TCF
exports will enter overseas markets duty-free.(3)
The WTO Agreement on Textiles and Clothing, arising from the Uruguay
Round, includes a program for elimination of the country-specific quotas
which were a feature of the Multifibre Arrangements under GATT.
Within APEC some members have reaffirmed their Uruguay Round targets,
while others have promised greater access to their markets or achievement
of the promised targets more quickly.
The following table shows the maximum and minimum tariff levels applicable
to TCF product groups imported into Australia and the simple average tariff
for each group. The table shows similar details for TCF exports to Australia's
major markets.
New Zealand, Hong Kong and Singapore do not appear in the table. Australian
exports to New Zealand enter duty-free and the other countries have zero
tariffs.
The table indicates that while high rates of duty still apply in a number
of countries-notably China and Thailand, the rates for Australia's other
main markets are comparable to, and in some cases well below, the equivalent
Australian rates.
Unfortunately, in some countries the problems that arise are not with
tariffs but with non-tariff barriers, e.g. anti-dumping policies, quarantine
restrictions quotas and technical standards.
- The Textiles, Clothing and Footwear Industries, Industry Commission
Report No. 59, 9 September 1997, vol. 1 p. 231.
- Asia-Pacific Economic Cooperation. The group members are: Australia,
Brunei Darussalam, Canada, Chile, People's Republic of China, Hong Kong,
Indonesia, Japan, Republic of Korea, Malaysia, Mexico, New Zealand,
Papua New Guinea, Republic of the Philippines, Singapore, Chinese Taipei,
Thailand and the United States of America.
- Trade Outcomes and Objectives Statement, The Hon. T. Fischer, Minister
for Trade, February 1997, p. 56.
Table of Tariff Rates and Simple Averages (%)
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