Trade remedies, rules of origin, customs procedures and trade facilitation, SPS measures, and technical barriers to trade
Background
4.1
This chapter examines Chapters 3 to 7 of the Free Trade Agreement between Australia and the United Kingdom of Great Britain and Northern Ireland (AUKFTA), specifically dealing with:
customs procedures and trade facilitation
sanitary and phytosanitary measures
technical barriers to trade.
Trade remedies
4.2
Trade remedies are mechanisms in international trade to resolve serious threats to the domestic industry of one party by exported goods of another party. Chapter 3 of the AUKFTA sets out trade remedies for dealing with three of these serious threats:
countervailing measures for dealing with subsidies
safeguarding measures for dealing with an unexpected surge in an imported good.
4.3
The provisions in Chapter 3 of the AUKFTA are based on existing agreements:
for anti-dumping, the World Trade Organization (WTO) Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (Anti-Dumping Agreement)
for countervailing measures, the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement)
for safeguarding, the WTO General Agreement on Tariffs and Trade 1994 (GATT 1994) and the bespoke safeguards provisions of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Dumping
4.4
The Anti-Dumping Agreement defines dumping as one party introducing a product into the market of another party at less than its normal value, in other words, the product’s exported price is lower than the comparable price at which the product is sold in its home market.
Subsidies
4.5
The SCM Agreement defines a subsidy as a form of either direct or indirect financial support for a business or industry by a government with the intention of giving that business or industry a competitive advantage in international trade.
Unexpected quantities of imported goods
4.6
Article XIX of the GATT 1994 established the right of a party to take action in the event that a product is being imported into a party in unexpectedly increased quantities and under such conditions that, due to unforeseen developments and the effect of tariff reductions, it causes or threatens serious injury to the party’s domestic producers of the same or similar products.
4.7
The WTO process for dealing with an injury to an industry as a result of a high quantity of an imported good was set down in the Agreement on Safeguards (Safeguards Agreement).
Investigation process
4.8
While the trade in goods-related serious threats to domestic producers are different and are covered by different agreements, the process for establishing that a serious threat exists, and quantifying the cost of that threat, are quite similar and involve an investigative process. The process can be summarised as follows:
The aggrieved party prepares an application for an investigation into its concerns.
The application is submitted to the aggrieved party’s investigating authority to consider whether an investigation is warranted.
A request for an investigation can be declined by the authority if the authority is not satisfied there is sufficient evidence to proceed with an investigation.
The authority notifies the party identified as the source of the threat of the request for an investigation.
The authority is generally required to complete its investigation in a set period of time, such as 12 months.
An investigation begins with a request for all parties to present all evidence they consider relevant.
Generally, the authority will provide an opportunity for both parties to present opposing views and rebuttals.
Authorities are also generally authorised to conduct investigations of their own to determine the veracity of evidence presented.
If the authority reaches a provisional determination that a threat exists, it may impose provisional restrictions to ameliorate that threat.
Investigations can be terminated upon the agreement of the parties involved.
Where the authority finds that a threat exists, the authority must determine the scope and type of the remedy. At this stage, the authority is generally obliged to release its findings to the public.
Remedies
4.9
A number of remedies are available in the event an investigation finds that a threat exists to an industry of a party under the relevant WTO agreements.
Anti-dumping measures
4.10
In relation to dumping, the party accused of dumping can offer during the investigation to:
… revise its prices or to cease exports to the area in question at dumped prices so that the authorities are satisfied that the injurious effect of the dumping is eliminated.
4.11
If such an offer is accepted, the investigation will be terminated prior to a finding being made.
4.12
Where a finding of dumping has been made, the aggrieved party can impose an anti-dumping duty, effectively a tariff, on the dumped imports up to the full margin of the difference between the price at which it is being dumped and the normal value of the exported product in its home market. The anti-dumping duty can be imposed only as long as is necessary to counteract the injury caused by the dumping.
Countervailing measures for subsidies
4.13
In relation to subsidies, if an investigation by a party finds that a subsidy exists and that the subsidy is causing injury, it may impose a countervailing duty. If a countervailing duty is imposed, the duty must be non-discriminatory and apply to all sources of imports found to be subsidised and causing injury. A countervailing duty can only remain in force for as long as is necessary to counteract the subsidisation that is causing injury.
Safeguard measures for unexpected quantities of imported goods
4.14
In circumstances where it has been found that the quantity of imports of a product has increased sufficiently to cause injury to a domestic industry, the Safeguards Agreement permits parties to ‘choose measures most suitable‘ to prevent or remedy serious injury and to facilitate adjustment in the industry. A party is to apply safeguard measures only to the extent necessary to achieve this objective.
4.15
A party imposing a safeguard measure shall endeavour to maintain concessions to the exporting party substantially equivalent to the value of the measures imposed as a safeguard. To achieve this objective, the parties concerned may agree on any adequate means of trade compensation for the adverse effects of the safeguards on their trade.
Key provisions in the trade remedies chapter
Anti-dumping and countervailing measures
4.16
Chapter 3 of the AUKFTA contains the following provisions in relation to anti-dumping and countervailing measures:
anti-dumping and countervailing measures based on article VI of GATT 1994, the Anti-Dumping Agreement and the SCM Agreement
a requirement that a Party advises the other Party in writing upon receipt of a properly documented application for an anti-dumping or subsidy investigation, followed by an opportunity to consult with the aim of clarifying the situation on matters raised in the application
an obligation on the investigating Party to make a full and meaningful disclosure of all essential facts under consideration
if the investigating Party finds in favour of the applicant, the Party may consider whether the amount of the anti-dumping or countervailing duty imposed shall be the full margin or a lesser amount.
Safeguard measures
4.17
The AUKFTA provides two channels for conducting safeguards investigations: the WTO process or a bespoke AUKFTA process based on the process in the CPTPP.
World Trade Organization safeguards measures
4.18
Article 3.5 provides a measure protecting the right of each Party to access the WTO process, regardless of the AUKFTA bespoke process, and goes on to reiterate a number of the provisions of the Safeguards Agreement, including that:
A Party can impose safeguards to protect a domestic industry from a product being imported in such increased quantities that causes serious injury or threatens serious injury to the industry.
A ‘serious injury’ is a significant overall impairment in the position of a domestic industry and a ‘threat of a serious injury’ means a serious injury that is clearly imminent.
A Party commencing an investigation must provide a notice to the WTO Committee on Safeguards.
Bilateral safeguards provisions
4.19
The AUKFTA contains its own bilateral safeguards provisions. The bilateral safeguard measures are limited to a ‘transition period.’ The transition period starts on the date of entry into force (EIF) of the AUKFTA and ends five years after customs duty reduction or elimination of the good in question.
4.20
The bespoke bilateral safeguard provisions are as follows:
If, as a result of the reduction or elimination of customs duties, an originating good is being imported into a Party in such increased quantities that it causes serious injury or threatens serious injury to an industry of a Party, the Party may apply for a safeguard under the AUKFTA.
The range of safeguards measures available are:
a suspension of further customs duty reductions or elimination in relation to the good
an increase in the rate of customs duty on the good to a level that does not exceed the lesser of: the most-favoured-nation (MFN) applied rate of customs duty in effect at the time the measure is applied; or the MFN applied rate of customs duty in effect on the day immediately preceding the date of EIF of the AUKFTA.
A safeguard measure can only be imposed for as long as necessary to prevent or remedy serious injury and to facilitate the adjustment of the domestic industry, and has a maximum period of two years (though there is some provision for extension).
The Party imposing safeguard measures shall progressively liberalise it at regular intervals during its period of application.
Safeguards measures can only be applied after the completion of an investigation in accordance with the procedures for investigations set out in the Safeguards Agreement.
A Party imposing safeguards measures is to consult with the other Party to provide mutually agreed trade concessions. If no agreement is reached, the Party against whose good the safeguard measure has been applied may suspend the application of substantially equivalent concessions.
Dispute resolution
4.21
Neither Party shall have recourse to the dispute settlement procedures in Chapter 30 of the AUKFTA for any matter arising under Chapter 3.
Rules of origin
4.22
Rules of origin are an essential development of trade agreements. Trade agreements allow preferential access to goods that are produced in the contracting parties. For the trade agreement to work, the contracting parties need to agree on a threshold, a ‘rule of origin’, that defines a good as originating in one of the contracting parties. In other words, rules of origin answer the question: does this product qualify for preferential access?
4.23
Rules of origin are addressed in Chapter 4 of the AUKFTA which contains three sections:
the rules for determining origin, including a number of provisions dealing with ancillary matters such as the treatment of the containers in which the products are encased and rules for small quantities of a product for demonstration purposes
instructions for how origin is to be claimed or proven in order to access preferential tariff treatment (called origin procedures), and how claims can be verified (if required)
establishment of a Working Group on Rules of Origin and Customs and Trade Facilitation.
Key provisions in the rules of origin chapter
Establishing origin
4.24
Unless otherwise provided, a product shall be regarded as originating if it is either:
wholly obtained or produced within the territory of one or both of the Parties (covering primary agricultural products, primary fisheries products, minerals or other naturally occurring substances, and waste or scrap)
produced entirely in the territory of one or both Parties exclusively from originating materials
produced entirely in the territory of one or both of the Parties using non-originating materials, provided the good satisfies all the applicable requirements of Annex 4B.
Products using non-originating materials
4.25
To qualify under the rules of origin, products produced entirely in the territory of one or both of the Parties using non-originating materials must satisfy the requirements set out in Annex 4B of the AUKFTA.
4.26
Specific rules of origin for a good are based on its tariff classification using the harmonised system. Annex 4B contains the product-specific rule that applies to each good. The annex only includes those goods for which a rule of origin applies.
4.27
There are five possible ways a non-originating materials product can be altered to become an originating product:
CC—All non-originating materials used in the production of the good have undergone a change in tariff classification at the ‘chapter’ level.
CTH—All non-originating materials used in the production of the good have undergone a change in tariff classification at the ‘heading’ level.
CTSH—All non-originating materials used in the production of the good have undergone a change in tariff classification at the ‘sub-heading’ level.
FF—Fabric that is constructed but not further prepared or finished provided that it is dyed or printed and undergoes at least one preparatory or finishing process in the territory of one or both of the Parties to render it directly usable is considered originating.
RVC(X)—A good must have a ‘regional value content’ (RVC) as calculated under article 4.4 of not less than (X) per cent.
4.28
The AUKFTA provides two methods for calculating the RVC to determine if the good meets the rules of origin:
‘Build-Down Method’, which calculates the percentage value of non-originating materials in a good
‘Build-Up Method’, which is based on the percentage value of the originating materials.
Build-down method
Build-up method
4.31
If a non-originating material undergoes a production process within a Party before it is included in the RVC test, it would also need to undergo a RVC test.
4.32
Having established these product specific rules of origin, there are a number of rules relating to the interpretation of the product specific rules, including:
tolerance for a small amount of non-originating materials in qualifying goods
the treatment of accessories, spare parts, tools and instructional information included with a product, and packaging for retail sale
the transition of a product through the territory of a third party while being transported between Parties.
Origin procedures
4.33
The process for claiming origin is as follows:
An importer may make a claim for preferential tariff treatment based on a declaration of origin completed by a producer, an exporter, an importer, and in the case of Australia, an authorised representative of an exporter or producer.
A declaration of origin may apply to a single shipment of a good, multiple shipments of identical goods for a period not exceeding 12 months, or multiple shipments of different parts of a disassembled good.
4.34
The procedures to be followed in claiming preferential tariff treatment are:
an importer declares a good as qualifying as an originating good and possesses a valid declaration or documentation
the importer provides the declaration and any supporting documentation to the importing Party
if the importer believes the claim for preferential treatment is incorrect, they shall correct the documentation and pay any customs duty.
Verification of origin
4.35
A customs authority can conduct a verification of any claim for preferential tariff treatment by:
a written request for information from the importer of the good
a written request to the exporter or producer of the good if the information obtained from the importer is not considered sufficient
a written request for information from the customs authority of the exporting Party where the information provided by the importer, exporter or producer is insufficient to make a determination as to the originating status of the good.
4.36
The verifying customs authority can conduct an investigation at the time the declaration is lodged, or before or after the good has been released from the customs authority. Verification investigations must be applied in accordance with the rules set out in the AUKFTA.
Consultation
4.37
The Parties agree to establish a Working Group on Rules of Origin and Customs and Trade Facilitation, composed of government representatives of each Party with responsibility for rules of origin and customs and trade facilitations matters (discussed below). The working group is to consider any matters arising under Chapter 4 and Chapter 5 (customs procedures and trade facilitation) and would report to the Committee on Trade in Goods.
Customs procedures and trade facilitation
4.38
In the context of free trade agreements (FTAs), the notional point at which an importer can make a claim for preferential tariff treatment is when a good passes through customs. These days, claims are usually made electronically and prior to the arrival of the goods in question. This is reflected in the provisions of agreements that cover customs procedures and trade facilitation.
4.39
Chapter 5 of the AUKFTA cements pre-existing commitments under the WTO’s Agreement on Trade Facilitation, and mirrors the obligations contained in the CPTPP.
4.40
In most instances, the obligations in the AUKFTA are more prescriptive than those in the CPTPP in terms of the standards each Party’s customs authorities are required to meet. Obligations in the CPTPP generally provide for some variability in the standards, either by including provisions for parties that cannot meet an obligation, or providing that parties ‘work towards’ or ‘endeavour’ to meet particular standards.
Key provisions in the customs procedures and trade facilitation chapter
4.41
In relation to customs procedures, the AUKFTA states:
Each Party shall ensure that their customs procedures are applied in a manner that is consistent, predictable, transparent and non-discriminatory.
The Parties must simplify and minimise the complexity of import, export and transit formalities, including through the use of electronic systems that are accessible to customers for submitting customs declarations and for automatic risk analysis and targeting.
Customs clearance times
4.42
Each Party is to adopt or maintain expedited customs procedures for expedited shipments, including providing in normal circumstances that expedited shipments be released from customs within six hours of arrival.
4.43
For goods that are not expedited, the AUKFTA provides that the Parties would, with a limited number of exclusions:
release goods within 48 hours of arrival
allow goods to be released without temporary transfer to warehouses or other facilities
allow for the release of goods before determination of customs duties, taxes, charges and fees
provide for the clearance of certain goods with a minimum of documentation.
4.44
For perishable goods:
goods would be released within six hours of arrival
in exceptional circumstances, goods would be released outside of business hours
goods shall be given appropriate priority when scheduling physical examinations or inspections
importers can arrange for the appropriate storage of goods pending their release.
Inspections and risk management
4.45
To support the expedited release of goods, each Party is to adopt a post-clearance audit process for compliance with customs and other related laws using a risk-based approach.
4.46
The AUKFTA states that Parties are required to adopt a risk management system for customs control that enables customs authorities to focus on inspecting high-risk consignments while expediting the release of low-risk consignments. Parties may also select consignments for inspection on a random basis.
Advance rulings
4.47
An importer in the territory of a Party or an exporter in the other Party’s territory can apply for an advance ruling, including regarding the tariff classification of a good and whether the good meets the rule of origin requirements. Ideally, an advance ruling should permit goods to pass through customs unhindered. A Party may refuse to issue an advance ruling if there is some dispute as to the facts and circumstances at issue.
4.48
Advance rulings are to remain in effect for at least three years, but may be modified or revoked within the three year period if there is a change in the law or the circumstances on which the ruling was based, the ruling conflicts with another advance ruling for goods of the same kind, or there is a change in the interpretation of the law.
Customs valuation
4.49
The customs valuation of goods traded between the Parties would be based on Part I of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994.
Review, appeal and penalties
4.50
Importers wishing to appeal adverse decisions, including in relation to advance rulings, customs valuations, tariff and origin determinations, would be provided access to an administrative review of that decision, and a judicial appeal if required.
4.51
The AUKFTA requires the Parties to administer the law in a way that is proportionate and non-discriminatory. Penalties shall only be imposed on the person legally responsible for the breach.
Sanitary and phytosanitary measures
4.52
Sanitary or phytosanitary (SPS) measures are measures adopted by a country to protect animal or plant life or health within a country from risks arising from the entry, establishment or spread of pests and diseases. In addition, the measures are designed to protect human or animal life or health within a country from risks arising from additives, contaminants, and toxins or disease-causing organisms in foods, beverages, or feedstuffs. SPS measures also prevent or limit other damage within a country from the spread of pests.
4.53
SPS measures include relevant laws, regulations, requirements, and procedures. Procedures include: processes and production methods; measures applying to the final product; testing, inspection, certification and approval procedures; quarantine procedures for the transport of animals or plants, or with the materials necessary for their survival during transport; methods of risk assessment; and packaging and labelling requirements directly related to food safety.
4.54
The objectives of Chapter 6 of the AUKFTA, which deals with SPS measures, include:
protecting human, animal and plant life and health in the territory of the Parties while facilitating trade between them
ensuring that the Parties’ SPS measures do not create unjustified barriers to trade
reinforcing and building upon the implementation of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement)
promoting greater transparency and understanding on the application of each Party’s SPS measures.
Key provisions in the SPS measures chapter
4.55
Chapter 6 affirms the rights and obligations of the Parties under the SPS Agreement.
Assessing risk
4.56
At the core of the SPS Agreement is the mechanism for assessing the SPS risk and balancing the risks with the economic costs SPS measures may inflict. Article 5.2 of the SPS Agreement states:
In the assessment of risks, [parties] shall take into account available scientific evidence; relevant processes and production methods; relevant inspection, sampling and testing methods; prevalence of specific diseases or pests; existence of pest — or disease — free areas; relevant ecological and environmental conditions; and quarantine or other treatment.
4.57
Assessing risk must also account for the following as economic factors:
… the potential damage in terms of loss of production or sales in the event of the entry, establishment or spread of a pest or disease; the costs of control or eradication in the territory of the importing [parties]; and the relative cost-effectiveness of alternative approaches to limiting risks.
4.58
The SPS Agreement also requires parties to avoid arbitrary and unjustifiable differences in the level of SPS protection if it results in discrimination or a disguised impediment to international trade.
4.59
In the event sufficient scientific information is not available on an SPS risk, a SPS measure can be provisionally adopted on the basis of available information, including from international organisations and from SPS measures applied by other parties. Parties must seek to obtain the additional information necessary for a more objective assessment of risk within a reasonable period of time.
Regulatory approaches to SPS measures
4.60
The approach of the United Kingdom (UK) to SPS measures, like that of the European Union (EU), is based on the ‘precautionary principle’, which involves erring on the side of caution when there is scientific uncertainty about a potential danger to safety or health. Australia on the other hand adheres to the risk-based approach, focussing on proven risks. The point of difference between the approaches adopted by the UK and Australia rests on the interpretation of part of article 5.2 of the SPS Agreement, which states that parties:
… shall take into account available scientific evidence …
4.61
Chapter 6 of the AUKFTA contains no explicit reference to the precautionary approach to SPS measures currently applied by the UK, only to the WTO version of the principle. However, the WTO’s advice on SPS measures establishes a fallback position that would permit the use of the precautionary principle. According to the WTO, parties:
… can also set higher standards based on appropriate assessment of risks so long as the approach is consistent, not arbitrary.
4.62
Article 6.7 of the AUKFTA requires an importing Party to recognise the equivalence of the SPS measures of the exporting Party, even if those measures differ. However, the final determination of equivalence rests with the importing Party.
4.63
Parties are to ensure that SPS control, inspection, assessment and approval procedures are undertaken and completed without delay, and information requests by the importing Party shall not be burdensome. Information concerning SPS import requirements are to be publicly available or provided on request.
4.64
Parties shall have the right to carry out an audit or verification of all or part of the control system of the competent authority of the exporting Party. If possible, an audit or verification is to be systems-based and designed to check the effectiveness of the regulatory controls of the exporting Party. Parties are to endeavour to agree on the conditions under which an audit or verification is to be carried out in advance.
4.65
If a Party requires import certification, its SPS certification requirements must apply only to the extent necessary to meet SPS objectives. Parties may consult through the SPS Committee to agree principles, guidelines, or specific requirements for certification.
4.66
Importing Parties retain the right to undertake import checks on SPS risks. These must be carried out without delay and with minimum disruption to trade.
4.67
Article 6.12 of the AUKFTA permits Parties to adopt emergency SPS measures where necessary to protect human, animal or plant life or health. If a Party adopts an emergency SPS measure, the Party must notify the other Party as soon as possible.
4.68
Each Party shall also advise the other of any new or revised SPS measures more generally.
4.69
If a Party has specific concerns regarding SPS measures proposed or implemented by the other Party, it may request technical consultations. To undertake technical consultations, each Party shall provide all information necessary to avoid disruption to trade and reach an acceptable solution within a reasonable period of time.
Technical barriers to trade
4.70
Chapter 7 of the AUKFTA covers matters related to technical barriers to trade and conformity assessments. The AUKFTA affirms the primacy of the WTO’s Agreement on Technical Barriers to Trade (TBT Agreement).
TBT Agreement and technical barriers to trade
4.71
Technical barriers to trade are mandatory technical regulations and voluntary standards that:
define specific characteristics that a product should have, such as size, shape, design, labelling, functionality or performance
establish rules, guidelines or characteristics for processes and production methods
deal with terminology, symbols, packaging, marking or labelling rules as they apply to a product, process or production method.
4.72
Technical regulations and standards are usually introduced by government authorities with a legitimate public policy objective in mind, including for example:
labelling of food ingredients
technical specifications of cars
safety and energy efficiency of home appliances.
4.73
Technical regulations and standards can have an impact on the competitiveness of exporters, such as a need to adjust products and production processes to comply with requirements in export markets, and to demonstrate compliance with these requirements. The significance of technical regulations and standards in international trade has increased as tariffs are removed or reduced and governments introduce regulatory requirements to address health, safety or environmental concerns.
4.74
The objective of the WTO’s TBT Agreement is to ensure technical regulations and standards are not used to discriminate or arbitrarily restrict international trade, and to prevent technical regulations and standards inadvertently restricting international trade.
Key provisions in the technical barriers to trade chapter
4.75
The technical barriers to trade provisions in the AUKFTA are a close match to those in the WTO TBT Agreement. Chapter 7 of the AUKFTA affirms the primacy of the TBT Agreement over the provisions of the chapter, stating:
Nothing in this Chapter shall prevent a Party from adopting or maintaining technical regulations, standards, or conformity assessment procedures in accordance with its rights and obligations under this Agreement, the TBT Agreement, and any other relevant international agreement.
4.76
Chapter 7 states that unless otherwise provided, the chapter applies to the preparation, adoption and application of all technical regulations, standards and conformity assessment procedures of the central level of government that may affect trade between the Parties. Further, the chapter does not apply to:
technical specifications prepared by government bodies for the production or consumption requirements of such bodies
SPS measures which are covered by Chapter 6 of the AUKFTA and discussed above.
Technical regulations
4.77
Article 7.5 requires that each Party consider accepting the technical regulations of the other Party as equivalent to its own, provided it is satisfied that the regulations adequately fulfil its own regulatory objectives.
4.78
Each Party must, in accordance with articles 2.4 and 5.4 of the TBT Agreement, use international standards, guides and recommendations or parts thereof as a basis for its technical regulations and conformity assessment procedures. Where a Party does not do so, it shall at the request of the other Party provide its reasons for not doing so.
Conformity assessment
4.79
The Parties recognise a range of mechanisms exist for accepting the results of conformity assessment procedures conducted in the other Party, including:
agreeing with the results of conformity assessment procedures undertaken by a body located in the other Party
adopting the accreditation procedures of conformity assessment bodies in the other Party
recognising the results of conformity assessment procedures conducted in the other Party
permitting conformity assessment bodies in each Party to enter into voluntary arrangements accepting each other’s assessment procedures
relying on a supplier’s declaration of conformity.
4.80
The Parties recognise the pre-existing Agreement on Mutual Recognition in Relation to Conformity Assessment, Certificates and Markings between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of Australia 2019. This agreement was considered by the Committee during the last Parliament.
Markings and labelling
4.81
For technical regulations that deal with mandatory marking or labelling requirements, each Party shall:
accord no less favourable treatment to products imported from the other Party than to its own like products or those originating in any other country
ensure that marking and labelling regulations are not prepared, adopted, or applied with a view to creating unnecessary obstacles to international trade.
4.82
If a Party requires mandatory marking or labelling, a Party may accept non-permanent labels, or marking or labelling in the accompanying documentation in place of attaching it to the product.
4.83
Article 7.8 states that mandatory marking or labelling requirements must not be more trade restrictive than necessary to fulfil a legitimate objective, including: national security requirements; prevention of deceptive practices; and protection of human, animal or plant health, or the environment.
Cooperation
4.84
The Parties would establish a Committee on Technical Barriers to Trade (TBT Committee). The functions of the committee would include:
monitoring the operation and implementation of Chapter 7
providing a regular forum for information exchange on matters related to Chapter 7
providing a forum for seeking to resolve differences that may arise regarding the interpretation or application of Chapter 7.
4.85
If a Party declines to discuss an issue through the TBT Committee, it shall on request of the other Party explain the reasons for its decision.
Matters of interest
Geographical indications
4.86
A geographical indication (GI) is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin. In order to function as a GI, a sign must identify a product as originating in a given place.
4.87
GI was discussed during the Committee’s public hearings into the AUKFTA, particularly in relation to the wine grape prosecco, and its use in labelling wines. According to Australian Grape and Wine:
We cannot use prosecco in the United Kingdom. It is a hangover from when they were part of the European Union, where they basically adopted all of those geographical indications. I don't think the story is over with prosecco and the UK.
4.88
The Department of Foreign Affairs and Trade (DFAT) confirmed this was a result of Brexit:
The UK is bound to recognise certain EU GIs under the terms of its withdrawal agreement with the EU. That is a matter for the UK. The FTA doesn't require the UK to undertake anything in contradiction to its existing withdrawal agreement with the EU ...
4.89
Nevertheless, DFAT told the Committee:
What we've put into the intellectual property chapter of the Australia-UK FTA is a mechanism whereby, if Australia does agree with any other third party, including the EU, to change our GI system for whatever reason, particularly under a trade agreement, that level of treatment will also be accorded to the UK ...
Annex on cosmetics
4.90
Chapter 7 contains a single annex relating to cosmetics. Specifically:
This Annex applies to the preparation, adoption, and application of technical regulations, standards, conformity assessment procedures, marketing authorisation, and notification procedures of central government bodies that may affect trade in cosmetic products between the Parties.
4.91
Each Party’s obligations under this annex apply to any product the Party defines as a cosmetic.
4.92
The annex states that the preparation of technical regulations, standards, conformity assessment procedures, or marketing authorisation includes, as appropriate, the evaluation of the risks involved, the need to adopt a measure to address those risks, the review of relevant scientific or technical information, and consideration of the characteristics or design of alternative approaches.
4.93
In relation to animal testing of cosmetics, neither Party shall require that a cosmetic product be tested on animals to determine the safety of that cosmetic product unless there is no valid alternative method available to assess safety. However, the testing of products on animals remains banned in both the UK and Australia.
Side letters – Medicines and medical devices
4.94
There are side letters in the AUKFTA on medicines and medical devices which commit Australia and the UK to strengthen their cooperation on issues of mutual interest concerning regulation of medicines and medical devices.
4.95
The side letters identify five matters on which the Parties may cooperate:
medicine supply chains and security
‘evolving areas‘, in particular improving the international response to global health threats such as pandemics
the promotion of dialogue on scientific matters and the exchange of information on regulatory activity, including to enhance patient and animal safety, pharmacovigilance, and market surveillance for medical devices and medicines
collaboration through relevant international initiatives, including to support greater regulatory harmonisation of respective regulations covering medicines and medical devices
exploring collaboration on regulating new and innovative medicines and medical devices.