RESTRICTEDWORLD TRADE
ORGANIZATIONWT/TPR/G/41
11 June 1998
(98-2242)
Trade Policy Review Body Original:  English
TRADE POLICY REVIEW
AUSTRALIA
Report by the Government
Pursuant to the Agreement Establishing the Trade Policy Review
Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World
Trade Organization), the policy statement by the Government of Australia is
attached.
Note:  This report is subject to restricted circulation and press embargo until the end of the meeting
of the Trade Policy Review Body on Australia.AUSTRALIA WT/TPR/G/41
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TABLE OF CONTENTS
Page
Introduction 4
Australia strongly committed to multilateral  trading system and reducing trade barriers 4
Industry, labour and taxation policies for improved competitiveness, higher productivity 5
The 1998 Trade Policy Review 5
Weathering East Asian Economic Instability (box) 6
Aims of this Statement 6
I. Economic Reform 6
Domestic Settings 6
Competition Policy 7
Industry Policy 8
Foreign Investment Policy 8Regulation Review 9
Taxation Reform 9
II. Australia’s Trade Policy Objectives 9
Bilateral Efforts 10
APEC and Open Regionalism 10Multilateral Efforts 11
Trade Liberalization 11
- The TCF and PMV Sectors  12
Export Assistance 13
Anti-dumping and Countervailing Measures 13
Australia’s Quarantine Regime 13
III. Australia and the WTO 14
Future WTO Work 14
Agriculture 14
Services 15
Industrials 15
Information Technology Agreement 15Accession Negotiations 16
Dispute Settlement 16
Australia’s Position on ‘Current’ Trade Issues  (box) 17
The Agreement on Sanitary and Phytosanitary Measures 17
Intellectual Property 17Rules of Origin 17
Standards and Conformance 18
IV. Future Direction of Australian Trade Policy 18
Summary relating to major issues 18WT/TPR/G/41 Trade Policy Review
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AUSTRALIAN GOVERNMENT POLICY STATEMENT
1. Since the mid-1980s, Australia has undertaken significant economic deregulation and reduced
trade barriers substantially. Globally, it has been a strong advocate for trade and investment
liberalization. This commitment to liberalization a nd reform has continued since the last Trade Policy
Review of Australia in 1994.
2. In a globalizing world, Australia's economic well-being and growth depend on healthy
domestic economic settings and open international markets. In this context, the Government is
committed to creating a more productive and outward-looking economy, while at the same time
supporting an open international trading system. Trade and investment policy, industry policy and
microeconomic reform go hand in hand in providing Australian business with the competitive
foundations and market opportunities to thrive in an increasingly globalized world.
3. The Australian Government’s 1997 White Paper on Foreign and Trade Policy, In the National
Interest, identifies security, jobs and living standards as the core national interests on which foreign
and trade policies are based.1 It advocates an integrated national approach in developing domestic,
foreign and trade policies, and an integrated bilateral, regional and multilateral approach in
progressing Australia’s trade policy interests. These are covered comprehensively in theGovernment’s annual Trade Outcomes and Objectives Statement .
2
Australia strongly committed to multilateral trading system and to reducing trade barriers
4. Australia is a staunch advocate of a rules-based, free and open global trading environment.
Australia continues to promote trade liberalization at home and overseas, with trade policy strategies
designed to achieve the best possible market access outcomes for Australian business. Australia is an
active participant in WTO activities and a leader in APEC trade liberalization efforts. Important
advances in the past two years have included:
- significant market access gains under the WTO Financial Services negotiations and
major improvements in access, transparency and predictability in telecommunications
services trade under the WTO Telecommunications Services Trade negotiations;
- APEC agreement to accelerate liberalization of 15 sectors representing over US$800
billion in intra-APEC trade, including several of major interest to Australia:
- impressive bilateral gains in access for Australian goods and services (especially
agrifood) in markets ranging from Asia to Latin America.
5. Australia’s own trade policies are open and transparent, and its barriers to trade are among the
world’s lowest. Australia’s general tariff rate on most goods is 5% or less today, compared with 9-
12% in 1993. The Australian Government is committed to continued trade liberalization, aiming tomeet the APEC Bogor Declaration goal of free and open trade by 2010 (see Part II).
                                                     
1 In the National Interest  is available from http://www.dfat.gov.au/ini/wp.html.
2 The 1998 Trade Outcomes and Objectives Statement  is available from http://www.dfat.gov.au/toos/.AUSTRALIA WT/TPR/G/41
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Industry, labour and taxation policies aim for impr oved competitiveness and higher productivity
6. Industry policies that complement and underpin Australia’s international interests are a entral
Government priority. In December 1997, the Government adopted an Industry Policy focusing on
encouraging innovation, investment and exports to enhance Australian companies’ globalcompetitiveness and to increase Australia’s attrac tiveness to foreign investors. Complementing this
are labour market reform policies designed to improve productivity and increase employment growth,
and tax reform proposals aimed at creating a fairer, less complex taxation system that will increase the
incentive to work, save and invest.
1998 Trade Policy Review
7. The 1998 Trade Policy Review of Australia, the third such TPR since 1989, is the first under
WTO disciplines. Australia was an early and strong supporter of the Trade Policy Review
Mechanism. It continues to support the process as a useful tool to promote and debate the
transparency of members’ trade polices (and of the multilateral trading system generally) and to
promote the WTO’s objectives of creating the conditions for a freer and more open global tradingenvironment - objectives that Australia fully embraces and strongly promotes.
8. The 1998 Trade Policy Review is taking place during a period of significant challenges and
opportunities for the Australian economy, due to the severe deterioration in trading conditions in
much of East Asia - a region accounting for almost 60 per cent of Australian merchandise exports and
a similar percentage of international tourism receipts. Indeed, the current financial and economicinstability in East Asia has brought into sharper focus the need for effective policies.
9. The Government faces a challenging environment in which to advocate globally open markets
and reduced barriers to trade and investment. Asian economic conditions and  the ongoing impact of
globalization and fast-paced technological change are important factors which will determine growth
and the pace of reform over the medium term. These same factors highlight the importance of the
rules-based trading system and the need for the WTO to be ambitious and forward-looking.WT/TPR/G/41 Trade Policy Review
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Weathering East Asian Economic Instability
The substantially weaker growth now in prospect for East Asian economies will adversely affect
Australian export performance. However, uncertainty remains about the timing and magnitude of
the impact on the Australian economy as a whole. The Government’s 1998 Budget Statement ,
released on 12 May, projects 1998/99 GDP growth at 3%, compared with 3.75% in 1997/98, as a
direct result of the slowdown in East Asia. The domestic economy nevertheless remains strong,
supported by positive fundamentals, including the lowest inflation and interest rates in almost
three decades, and sound household and corporate balance sheets. Furthermore, the significant
turnaround in the fiscal position, from a A$10.3 billion underlying budget deficit in 1995/96 to a
projected surplus of A$2.7 billion in 1998/99, places Australia on a solid footing.  In addition, the
depreciation of the Australian dollar against the currencies of the United States, Canada and
several European countries gives Australian exporters a competitive advantage.
The effects of slower Asian growth will not be uniform across all export sectors. For example,
Australian suppliers of raw and intermediate goods (the bulk of our exports) are expected to suffer
fewer negative effects than those producing consumer goods. Australian merchandise exports in
the first nine months of FY1997-98 (July 97-March 1998) totalled $65.7 billion, $7.8 billion more
than in the same period of 1996-97. Exports of goods and services totalled $85.1 billion, $8.4
billion more than in the same nine months of 1996-97. Early indications are that, where possible,
exporters are shifting from the markets most affected by the crisis to other destinations, including
North America, Europe, the Middle East and South Asia.
Australia has responded to problems in the region by providing considerable financial support for
IMF-sponsored programmes for Indonesia, Thailand and the Republic of Korea, and additional
trade credit insurance, as appropriate, for exporters to Korea and Indonesia. The Government is
also pressing - through a variety of bilateral, regional and multilateral fora - for continued trade
and investment liberalization in the region.
To assist Australian business to deal with the slowdown in Asia, the Government is providing up-
to-date information and practical advice, encour aging companies to position themselves carefully
and strategically in the Asian market, and encouraging them to explore opportunities in higher-
growth markets outside the region.
10. This paper sets out briefly the main aspects of Australia’s trade and investment policies, in the
context of the Trade Policy Review. It also addresses a number of issues which have been raised by
the WTO Secretariat during the Review process, including savings and taxation policy, the
Government’s commitment to continued trade liberalization, the extent of government intervention in
the economy, the use of incentives to encourage exports and attract investment, and the nature and
transparency of anti-dumping and quarantine procedures.
I. Economic Reforms
Domestic Settings
11. Given its small domestic market and its 1.2% share of world exports and imports, Australia
must become increasingly globally-oriented if the Government’s national objectives are to be met.
The overall objective of Australia's economic policy settings is to raise living standards, increaseemployment and generate wealth by providing stable macroeconomic conditions and a flexible and
responsive microeconomic environment. This, in combination with trade policies aimed at achievingAUSTRALIA WT/TPR/G/41
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fair trading conditions and open markets globally, will enhance Australian companies’
competitiveness and create new business and employment opportunities.
12. Over the past two years, the Australian Government has pursued economic policies aimed at
strengthening firms’ international competitivene ss through increased productivity. Eliminating the
underlying budget deficit, maintaining low inflation, encouraging greater domestic competition,
streamlining regulation, reducing structural impediments to growth and employment, reforming the
financial sector and encouraging inward investment are key elements of those policies.
13. Since 1996, the Australian Government’s medium-term fiscal strategy has been to secure and
maintain a balanced budget. The primary objective is to increase national savings and improveAustralia’s long-term growth prospects by reducing its vulnerability to external shocks. The
Government’s recent Budget Statement projects an underlying budget surplus of $2.7 billion for
1998/99, compared to an expected underlying deficit of $1.2 billion in 1997/98.
14. Australia’s monetary policies aim to keep underlying annual inflation in a 2-3% band.
Inflation has been maintained below 5% since 1991 and below 2.5% since 1995, the lowest levelamong OECD members.
15. Macroeconomic policy changes have been complemented by a wide range of microeconomic
reforms to increase productivity and flexibility and allow product, labour and financial markets to
operate more efficiently. These reforms focus on labour markets, financial system regulation, the
waterfront, domestic competition policy and taxation.
16. In relation to labour market reform, the Government, through the Workplace Relations
Act 1996, aims to give employers and employees primary responsibility for setting wages and
conditions, so that outcomes better reflect the economic conditions facing individual workplaces.
17. In the financial sector, reforms in response to the 1997 Financial System Inquiry will build on
the major reforms undertaken in the  1980s. The aims are to enhance competition and efficiency,
improve the regulatory structure, and reduce barriers to entry into deposit-taking and other areas,
while preserving the financial system’s integrity, security and fairness.
18. On the waterfront, the objective is to raise labour productivity and create a more efficient and
reliable shipping services industry which meets world best-practice operations and does not impede
trade or adversely affect Australian businesses’ international competitiveness. Shipping reforms will
include ending the pooled labour system, reducing the costs of Single Voyage permits and Continuing
Voyage permits (which allow foreign vessels coastal access), and removing cabotage on ChristmasIsland trade.
Competition Policy
19. Federal, State and Territory Governments established the National Competition Policy in
April 1995.  The reforms:
- extended the anti-competitive conduct provisions of the Trade Practices Act of 1974
to cover all business activities, including unincorporated businesses and government-
owned enterprises;WT/TPR/G/41 Trade Policy Review
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- provided for access to ‘essential facilities’ (basically, major natural monopolies for
which a right of access is necessary for upstream or downstream competition to
occur);
- set out structural and operational changes to achieve ‘competitive neutrality’ between
the public and private sectors (to avoid unfair competition);
- set out principles for reforming public monopolies (e.g. by separating regulatory
functions from commercial activities).
20. Over the past two years, Australia has introduced a number of additional competition reforms
aimed at increasing national productivity and community welfare in public and infrastructure services.
These reform processes have included privatization of numerous publicly owned services (e.g. water,
electricity). In telecommunications, a new regulatory regime is facilitating open competition; inelectricity, substantial progress has occurred in establishing a competitive national electricity grid; in
gas, significant progress has occurred in removing barriers to free and fair trade; in rail transport, a
national body will improve access to and harmonization of Australia’s inter-state rail network; and in
aviation, numerous airports are being privatized, including all State capital city airports except
Sydney.
Industry Policy
21. The Australian Government announced its Industry Policy in the December 1997 Statement:
Investing for Growth .
3  Th e  major initiatives aim to encourage innovation, investment and exports
(three key drivers of economic growth); to improve Australia's attractiveness as a regional financial
centre; and to ensure that Australia benefits from  the global information revolution. Key trade-related
features include a more competitive customs regime through a new Manufacture-in-Bond  system and
a new scheme combining existing duty and tariff concession programs. These are complemented byaction agendas which will encourage information industry development (e.g. by removing tariffs on
IT inputs) and addressing impediments to growth in the food, financial services, tourism, chemicals
and plastics, renewable energy, liquefied natural gas, automotive, and textile, clothing and footwear
industries.
22. This policy is part of an ambitious economic reform agenda designed to build a strong
economy that will be able to thrive among the challenges and opportunities of the twenty-first
century. By encouraging a more strategic approach to grasping the opportunities open to Australia as
a globally oriented nation, the industry policy meets community demands for a greater sense of
direction and policy predictability.
23. Moreover, the measures announced in Investing for Growth  are strikingly similar to the policy
priorities highlighted by OECD Industry Ministers at their meeting in Paris on 3-4 February 1998.
They agreed that sustained economic growth will only be achieved if governments maintain a sound
macroeconomic framework and set policies which improve their industries’ competitiveness,
encourage investment and recognise the central role of research and development.
Foreign Investment Policy
24. Australia’s foreign investment policy is framed and administered to encourage investment
consistent with Australia’s interests. The objectives  are: to ensure that Australia is an attractive
location for sustainable, long-term investment that creates employment and benefits the wider
                                                     
3 Investing for Growth is available from http://www.dist.gov.au/growth.AUSTRALIA WT/TPR/G/41
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community; to encourage the establishment of new industries or expansion of existing industries,
especially in high value-added sectors; to generate export earnings; to improve industry
competitiveness and productivity; and to ensure that any incentives are consistent with Australia’s
international obligations.
25. Under the Government’s foreign investment policy and the Foreign Acquisitions and
Takeovers Act of 1975, the Treasurer may need to be notified of proposals by foreign interests to
invest in Australia. For non-sensitive sectors (i.e. all except real estate, civil aviation, media and
telecommunications), proposals for acquisition of a substantial interest in an existing business with
total assets of less than A$5 million (A$3 million for rural properties), and proposals for an initial
investment of less than A$10 million in a new business,  are exempt from notification. Proposals for
investments exceeding these amounts are normally approved unless they are judged contrary to the
national interest. The national interest ‘test’ is a ‘negative test’, with the onus essentially on the
authorities to have reason to reject, rather than on the investor to show benefit to Australia. Approvals
are not withheld on national interest grounds except in unusual circumstances affecting Australia's
vital interests and development (2.5% of 4200 proposals were rejected in 1996/97, mostly proposed
real estate transactions). Foreign investment policy is currently under review as part of the
Government’s comprehensive review of legislation imposing costs on business (see Regulation
Review   below).
26. In the Industry Statement, the Government announced that it will consider incentives to make
investment in Australia more attractive. The primary requirement is net benefit to Australia, and
candidates (domestic and foreign alike) must demonstrate a prima facie  case against the criteria and
the need for incentives before they will be considered. Cabinet will consider incentives for major
investment projects  on a case-by-case basis in limited and special circumstances, in line with a set of
published eligibility criteria (see WTO Secretariat Report, Chapter III, for details)
Regulation Review
27. Complementing all these policies is a significant Australia-wide regulation review process
arising out of the Competition Principles Agreement signed by Federal, State and TerritoryGovernments in 1995. An important objective is to significantly reduce the paperwork and
compliance burden on small business by simplifying taxation compliance, providing easier access to
government information and reducing complexity, duplication and delays in regulatory approval
processes.  The Federal Government, for its part, ha s commenced the review process in line with its
Legislation Review Schedule. The guiding principle is that legislation should not restrict competitionunless the public benefits of such restriction can be demonstrated to outweigh the costs associated
with any restrictive arrangement.
Taxation Reform
28. Reform of Australia’s taxation system is high on the Government’s economic agenda. A
Taxation Taskforce is assisting the Government to examine options for reform, in order to make the
tax system simpler, fairer and more efficient.  The Taskforce’s broad guidelines are: not to increase the
overall tax burden; to reduce personal income tax with special regard for families; to consider a
broad-based, indirect tax to replace some or all of the existing indirect taxes; to provide appropriate
compensation for those deserving special consideration; and to address Commonwealth/Statefinancial relations. The Government plans to announce its tax reform programme before the next
election.
II. Australia's Trade Policy Objectives and Issues
29. Australia’s trade policy is flexible and pragmatic, with a fully integrated bilateral, sectoral,
regional and multilateral approach to achieving market access outcomes. It is increasingly results-WT/TPR/G/41 Trade Policy Review
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oriented and focuses on providing tangible market solutions for Australian business. As we move into
the twenty-first century, Australia’s trade policy will need to incorporate a broader and more complex
agenda closely linked with industry and microeconomic policy.
30. The Government’s primary trade policy objective is to secure optimum overseas market
access for Australian companies by:
- negotiating progressive reduction and removal of tariffs and non-tariff barriers;- contributing toward stronger, fairer and more efficient international trade and
investment rules;
- discouraging trade-distorting export subsidies;
- encouraging alignment of Australia’s and others’ standards with international
standards;
- influencing the broadening of the trade agenda in line with Australia’s interests;
- encouraging firms to further develop existing markets and to identify and tap new
markets.
Bilateral Efforts
31. Australia’s bilateral trade policy focuses on securing better market access for a range of goods
and services in our own region as well as in other priority markets. Many of these efforts are
coordinated through the Government’s Market Development Task Force (MDTF), chaired by the
Department of Foreign Affairs and Trade, which  seeks to ensure an efficient, consistent and focused
approach across key portfolios in setting and achieving bilateral trade objectives for 25 target markets.
In addition to bilateral market access negotiations, Federal, State and Territory Governments have
extensive trade development efforts in Asia, Europe, North America and numerous emerging markets.
Sectoral trade facilitators in the Department of Foreign Affairs and Trade (appointed in 1997/98)coordinate business input on issues that affect market access and trade development in sectors such as
food, information technology, automotive products, and textiles, clothing and footwear.
APEC and Open Regionalism
32. Australia’s regional trade policy aims to build upon the multilateral system’s trade and
investment liberalization goals and gains, and to advocate and protect Australia’s interests in a varietyof regional fora. This complements in an important way Australia’s multilateral and bilateral policy
activities and objectives.
33. The Asia-Pacific Economic Cooperation forum (APEC) is the cornerstone of Australia’s
regional trade policy. Australia has been at the forefront of efforts to secure freer trade and investment
among APEC members, as the best means of achieving sustainable economic development. Much ofAPEC's work centres around achieving the 1994 Bogor Declaration goal of free and open trade by
2010 for developed members and 2020 for developing economies.
34. APEC is not a preferential trading arrangement. Rather, it is based on the principle of open
regionalism in which trade is conducted on an MFN basis. APEC complements multilateral trade
liberalization efforts by seeking to progressively reduce and remove barriers to trade and investment.AUSTRALIA WT/TPR/G/41
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In APEC, Australia is encouraging members to strengthen their Individual Action Plans (IAPs), and to
support early voluntary liberalization of specific sectors.4  APEC Leaders, at their November 1997
Vancouver meeting, agreed to accelerate trade libera lization in 15 sectors, including two put forward
by Australia (energy and food) and one co-sponsored by Australia (chemicals). Liberalization of nine
sectors, including energy and chemicals, is to be fast-tracked for implementation in 1999.
35. The Australia-New Zealand Closer Economic Relations agreement (CER), recognised as one
of the world’s most comprehensive, effective and multilaterally compatible free-trade agreements,
celebrates its fifteenth anniversary in 1998. AFTA-CER and CER-Mercosur dialogues will continueto focus on trade facilitation and harmonization issues. Australia is also advancing its objectives of
increased regional engagement through the Australia-Indonesia Development Area (AIDA) and the
Indian Ocean Rim-Association for Regional Cooperation (IOR-ARC).
36. Regional trading arrangements (RTAs) are an important feature of the global trading system.
In 1997, a major review of Australia’s policy on participating in RTAs concluded that Australia couldin future consider the option of joining them if it is in its interest. The Government recognises that
while RTAs can offer their participants potential advantages, they can also impose costs on members
as well as non-members. Firms outside can face discriminatory arrangements which could potentially
contribute to the fragmentation of the nondiscriminatory trading system. Australia will continue topromote stricter multilateral rules and disciplines for RTAs. It will also encourage quicker multilateral
and APEC liberalization processes in order to reduce the incentive for countries to resort to
discriminatory regional solutions in order to address trade-related issues.
Multilateral Efforts
37. At the multilateral level, a key objective of Australia’s trade policy is to improve market
access and achieve a fairer global trading environment via the WTO, which is important to Australia
because it is the major forum for global trade liberalization. Through its rules and disciplines, the
WTO provides a more predictable and transparent environment for business, as well as a means for
resolving disputes. At a time of turbulence and un certainty in international financial markets and
increased global interdependence, this rules-base d system is essential to economic growth and
prosperity. (See Part III:  Australia and the WTO, for details.)
Trade Liberalization
38. Progressive trade liberalization over the past decade has served Australia well. Indeed,
Australia is pushing hard for the liberalization of trade and investment regimes overseas because we
are convinced that open markets are important, not only for Australian exporters, but for sustaining
and increasing living standards in general. Tariff reductions introduce healthy competition, make
companies more cost- and service-conscious, and offer consumers broader choice and better prices .
Over the past decade, the average Australian family has saved more than A$1000 per year from tariff
reductions. The average effective tariff on manufactured imports fell from 22% in 1984-85 to 7%1996-97 and will decline to 5% by 2001.
39. Australia’s applied tariff regime compares favourably with the rest of the world. Most goods
enter Australia duty free. Australia’s unweighted (simple average) ad valorem  tariff level is 5.6%
                                                     
4 IAPs reflect APEC members' plans to achieve the 1994 Bogor Declaration goal of free trade and
investment in the region by 2010/2020.WT/TPR/G/41 Trade Policy Review
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(9.6%  in 1993). Australia bound around 96% of its tariffs as a result of the Uruguay Round (from
20% in 1993). In some cases, Australia has brought forward its final Uruguay Round tariff bindings.
For example, as part of its APEC Individual Action Plan, Australia advanced by one year to
1 January 1998 the final bound rate on some industrial and agricultural products, and has bound these
accelerated reductions in the WTO.
40. Australia continues to reduce tariff barriers on a unilateral basis. Of particular note was the
Government’s decision in July 1997 to remove tariffs on imports of raw and refined sugar and related
products, opening fully this important (and domestically sensitive) sector to international competition.
41. However, Australian exports continue to face tariff and other trade barriers overseas as other
economies continue to protect local industries. Australia takes every opportunity at bilateral, regional
and multilateral fora to encourage our trading pa rtners to meet their existing commitments and to
liberalize further.
The TCF and PMV Sectors
42. In two important industry sectors: textiles, clothing and footwear (TCF) and passenger motor
vehicles (PMV), tariffs continue to be phased down unilaterally, but remain above the general 5%
level. These industries are important employers, in cluding in regional Australia. Acknowledging that
tariff reductions can impose significant short-term costs on individual industries, the Government has
given them some extra time to strengthen their capital bases and enhance their international
competitiveness in the lead-up to the APEC target of free trade beyond 2010.5
43. In the case of motor vehicles, tariffs will be reduced from 20% in 1998 (32.5% in 1993) to15% on 1 January 2000 and will ‘pause’ at that level for five years. The Government has said it will
introduce legislation this year to further reduce the tariff to 10% on 1 January 2005. Another review
will occur in 2005.
44. ‘Peak’ tariffs for clothing and finished textiles will continue to decline from 31% in 1998
(41% in 1993) to 25% on 1 January 2000 and will remain at that level until 2005. The Government
plans to legislate this year to further reduce the peak tariff to 17.5% on 1 January 2005. Similarly,
tariffs on all other TCF products will decline from a range of 5-22% at present to a range of 5-10% by
2005. In other words, between 1998 and 2005, TCF tariffs will decline by about half.
45. The PMV and TCF ‘tariff pauses’ do not signal a change in the Australian Government’s
commitment to tariff reductions and trade liberalization generally. Rather, the decision reflects the
Government’s desire to achieve balanced outcomes in the interest of the community as a whole, and
to provide greater predictability for industry while at  the same time ensuring that Australia meets its
international obligations. Given that average general tariff levels are just 5% and Australia iscommitted to free trade within APEC by 2010, tariff pauses in other sectors are not envisaged.
46. Access for TCF products to the Australian market is not hindered by quotas. Australia
removed its last TCF quota in 1993, and its TCF tariff lines are fully integrated under the WTO
Agreement on Textiles and Clothing.
                                                     
5 TCF industries employ some 100,000 people, including 25,000 in regional areas;  the PMV sector
employs 47,000.AUSTRALIA WT/TPR/G/41
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Export Assistance
47. The Government gives high priority to trade promotion and exporter advisory services to
encourage Australian firms to develop markets offshore and to take advantage of the opportunities
offered by improved market access. In line with its fiscal consolidation program, however, theGovernment discontinued such programs as the International Trade Enhancement Scheme (ITES) and
the Innovative Agriculture Marketing Scheme (IAMP) in 1996. It has also capped funding for the
Export Market Development Grants (EMDG) Sc heme, which was established in 1974 to boost
exports by reimbursing part of eligible firms’ (mostly SMEs) export promotion expenditure.
Anti-dumping and Countervailing Measures
48. Australia’s anti-dumping and countervailing policies are designed to provide relief to
Australian companies injured by overseas goods sold at a lower price than their ‘normal value’ in
their home market. The system is industry-driven  and conforms to the WTO Agreement on Anti-
dumping and Countervailing Measures. Under Aust ralian legislation and consistent with WTO
requirements, anti-dumping action can be taken only if dumped items cause or threaten material injuryto local producers of similar goods. The number of anti-dumping cases initiated by industry declined
from 51 in 1993/94 to 36 in 1997/98 (to May 1998).
6  Most have been in the chemical and petroleum
products (13 cases) and paper (14 cases) sectors. Fu rthermore, the number of  anti-dumping and
countervailing measures has been cut from 101 at end-1995 to 54 at end-1997.
49. In February 1998, the Government proposed changes to Australia’s anti-dumping procedures
which will reduce the investigation period and provide a simpler, more predictable and expeditious
process for all parties: importers, exporters and local industry alike. The main features are: (1)
abolishing the Anti-dumping Authority; (2) reducing the investigation period from 215 to 155 days;
and (3) establishing a new independent appeal mechanism. In addition, all interested parties will be
given 20 days to examine and respond to the Statement of Essential Facts of a case as presented by the
Australian Customs Service. The proposed legisl ation, currently before Parliament, will permit
provisional measures to be imposed at any time after Day 60 of an investigation, following a publicdetermination indicating grounds for such measures, as required by the WTO Agreement.
Australia’s Quarantine Regime
50. Australia’s prudent approach to quarantine and sanitary and phytosanitary regulations reflects
its island geography, which has isolated it from many exotic diseases and pests, and its unique flora
and fauna. More often than not, Australia’s access to other markets depends on its favourable animaland plant health status. Up to 80% of Australia’s agricultural output is exported, with foodstuffs
accounting for 22% of total merchandise exports.
51. GATT/WTO rules recognize countries’ right to maintain measures to ensure food safety and
to prevent the spread of pests or diseases among plants and animals. Australia, as a relatively disease-
and pest-free island continent, is keen to maintain this status. Consequently, all imported plants,animals and associated products, including food, are subject to a rigorously enforced quarantine
regime, which is consistent with international rules and standards.
                                                     
6 By comparison, in 1996/97, the US had 305 anti-dumping actions, the EU 157, Mexico 100 and
Canada 95.  In the same year, the US had 68 countervailing duty actions, Mexico 11, Brazil 11 and Australia 6.WT/TPR/G/41 Trade Policy Review
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52. The Government, in response to independent reviews of Australia’s quarantine policies and
practices in 1996 and 1997, has committed (among others) to:
- improve border measures;
- strengthen the science-based risk analysis process;- enhance the information base and transparency of quarantine policies and practices
through greater stakeholder participation in quarantine policies and practices at each
stage.
53. Australia also recognises that it is important that its trading partners be aware of the reasons
for its strict quarantine regime, especially as regards the devastating impact that imported pests and
diseases could have if rigorous measures were not applied.  For example, the intrusion of papaya fruitfly in October 1995 has interrupted an estima ted $A 600,000 of annual exports from northern
Queensland, due to bans by overseas buyers, and wi ll cost over $A 30 million to eradicate by 1999.
III. Australia and the WTO
54. Australia strongly supports the World Trade Organisation, which provides stable and
predictable rules facilitating access to internationa l markets. Negotiations in the WTO allow Australia
to advance important economic and trade interests, including fair trade and open markets. In addition,Australia benefits from ongoing WTO work, such as monitoring the implementation of agreements,
negotiating the terms on which new members can join the organisation and settling trade disputes.
Future WTO Work
55. A key objective for Australia will be to secure WTO agreement for broad-based multilateral
trade negotiations to commence by 2000.  This would complement and build on the WTO’s vital work
on implementation of existing WTO commitments, accession negotiations and sectoral negotiations,
including the Information Technology Agreement. Other top priorities include advancing preparations
for the resumption of WTO agriculture negotiations in 1999 and for WTO services negotiations in2000.
56. The Built-In Agenda (BIA), which mandates, among others, the start of negotiations on
agriculture and services by 1999/2000, provides a good base for the WTO’s future negotiating
agenda. However, to achieve a systematic approach to the WTO work program and its management,Australia supports a careful examination of the BIA to identify gaps and possible over-arching
linkages among issues; to consider how best to manage concurrent accessions; and to set start and
finish dates for negotiations. Given the diverse nature of Australia’s international trade and
investment relations, the creation of a balanced framework covering issues of interest to all WTO
members would maximize the likelihood of outcomes acceptable to all WTO members.
Agriculture
57. The Cairns Group of agricultural fair traders is the most successful, and hence enduring,
issue-specific coalition within the multilateral tr ading system. Cairns Group Ministers, representing
both developing and developed countries, met in Sydney in April 1998 and reiterated that the next
WTO negotiations on agriculture must achieve fundamental reform, to place agriculture on the samebasis as other areas of world trade. Ministers called upon the WTO’s May Ministerial meeting toAUSTRALIA WT/TPR/G/41
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launch a preparatory process to settle efficiently the mandate and structure of the agricultural
negotiations, agreed as part of the Uruguay Round Bu ilt-In Agenda, so that substantive discussions
can commence by the end of 1999.
58. The Cairns Group, chaired by Australia, will direct its efforts to achieving three main
objectives: (1) eliminating export subsidies; (2) eliminating non-tariff barriers, accompanied by deep
cuts to tariffs and tariff peaks and elimination of tariff escalation; and (3) securing major reductions in
trade-distorting domestic support for all agricultural products. Between now and the 1999 WTO
negotiations, the Group will intensify interaction with other WTO Members to promote the Group’s
vision and, in particular, endeavour to demonstrate that the agricultural reform process will benefit all
developing, including least developed, economies.
Services
59. Australia’s services exports exceeded $24 billion in 1996-97, representing 23% of total
exports, up from around 18% in 1987. Despite intense competition, Australia has maintained its share
of world services trade at around 1.35%.
60. Australia welcomed the conclusion of negotiations on telecommunications and financial
services. It  places high priority on negotiating with prospective WTO members improved access for
Australian services exporters, particularly in financial services, telecommunications and professionalservices. Australia is also negotiating commitments on transparent and secure operating conditions. In
current (May 1998) negotiations on accountancy disciplines, the Government has sought
commercially meaningful, universally binding WTO regulations. Australia expects that once the
accountancy negotiations are concluded, a generic approach to other professions will be adopted.
Taking a leading role in advancing WTO preparations for the next round of services tradenegotiations, scheduled to commence in 2000, Australia is keen to see further truly liberalizing market
access and national treatment concessions in the key areas of interest noted above.
Industrials
61. Australia supports further negotiations on industrial tariffs as part of comprehensive
negotiations in 2000. Australian industry continues to face high tariff and non-tariff barriers for many
products. Broad-based negotiations incorporating a balanced framework and the full involvement of
all WTO members will be necessary to move the liberalization agenda forward.
Information Technology Agreement
62. Australia has secured significant benefits by pursuing improved market access conditions
through the WTO Information Technology Agreement and the WTO Agreement on Trade in
Telecommunications Services. Australian industry a nd Government jointly have developed Australia's
position for the ITA II negotiations. Australia considers that one of ITA II’s most important features is
its desire to ensure that non-tariff measures do not undermine ITA tariff commitments. Priorities forAustralia in ITA II negotiations will include accelerating tariff reductions in key markets (India,
Malaysia and Indonesia); extending ITA participation; examining non-tariff measures which affect
trade in ITA products; and identifying additional products (eg, chemical inputs) for the ITA list.WT/TPR/G/41 Trade Policy Review
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Accession Negotiations
63. Australia encourages an expansion of WTO membership through the admission of new
members on commercially acceptable terms. Australia sees WTO accession negotiations as offering a
unique opportunity to improve market access and secure commitments for greater transparency and
stability in trading conditions. Among the more than 30 economies negotiating accession to the WTO
are seven which buy over A$8 billion worth of Aust ralian products each year, or 10% of our total
exports (China, Chinese Taipei, Vietnam, Saudi Arabia, Jordan, Oman and Russia). The successfulconclusion of accession negotiations with these economies will bring important segments of
Australian trade under WTO rules. It is important  to the Government that the WTO is not weakened
through the admission of new members which are not fully committed to its rules. WTO accession is
an important step in these economies’ integration into the world trading system, and Australia
provides technical assistance to help them achieve  the reforms necessary to comply with WTO rules.
Dispute Settlement
64. One of the key outcomes of the Uruguay Round was a stronger multilateral dispute settlement
system. The WTO Dispute Settlement Understandi ng (DSU) of 1995 removed disputing parties’
powers to veto adoption of panel reports and introduced an appellate system. The large number of
disputes dealt with under the DSU - more than 1 20 requests covering 87 distinct matters - and the
number of members involved indicate that the system is functioning effectively and is generally well
accepted. Australia has been involved in 14 disputes initiated under this mechanism: two as acomplainant, four as a respondent and eight as a third-party participant (see WTO Secretariat Report,
Chapter II, for details).
65. From Australia’s perspective, the extensive use of the DSU over this initial period has
contributed to increased confidence in the multilate ral trading system. At the same time, a number of
procedural and substantive matters have emerged which will require detailed consideration bymembers in coming years. In this respect, Australia is taking a close interest in the DSU review
scheduled to be completed this year. Australia strongly supports the dispute settlement mechanism
and will continue to work towards its optimum effectiveness.AUSTRALIA WT/TPR/G/41
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Australia’s Position on ‘Current’ Trade Issues
Electronic Commerce :  Australia supports placing on the WTO agenda the issue of the
implications of electronic commerce for the General Agreement on Tariffs and Trade (GATT), the
General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS), to examine if existing WTO rules are adequate or if new
rules are required.
Investment :  Australia supports the principle of an effective rules-based regime in the WTO
covering trade-related investment issues. Australia is actively involved in exploratory work in the
Working Group on Trade and Investment.
Competition Policy :  In this highly complex area, Australia actively supports an exploratory,
educative discussion on the interaction between trade policy and competition policy as a foundation
for considering how the WTO might handle this issue in future.
Trade and Environment :  Australia strongly advocates that economic, environment and trade
interests be given balanced treatment in interna tional discussions and that international agreements
respect the sovereign right of countries to determine appropriate domestic environmental policies.
Australia strongly advocates improved coordination of trade and environment issues, both at the
national level and in international fora such as the WTO Committee on Trade and Environment
(CTE). Australia actively supports efforts to make trade and environment policies mutually
supportive, particularly through reform of trade-distorting policies that adversely affect the
environment.
Government Procurement :  Australia is taking a close interest in the review of the WTO
Agreement on Government Procurement. Australia hopes that related work of the Working Group
on Transparency in Government Procurement and the Working Party on GATS rules will deliver
significant improvements to the Agreement, in both the principles and the practices covered by
trade rules on government procurement.
The Agreement on Sanitary and Phytosanitary Measures (SPS Agreement)
66. As a major exporter of agricultural products, Australia attaches great importance to WTO
Agreements on the application of Sanitary and Phytosanitary Measures and on Technical Barriers to
Trade (TBT). Australia is an active participant in the SPS Committee. The 1998 review of the SPS
Agreement will be an important priority for Australia,  which has a strong interest in ensuring that the
SPS Agreement operates effectively in terms of both ensuring fair access to markets and safeguarding
our largely pest- and disease-free status, an important element of our comparative advantage in
agriculture.
Intellectual Property
67. Australia advocates the need to harmonize and bring certainty to intellectual property laws
worldwide, including those governing biotechnology. It will be an active participant in the review of
the TRIPS Agreement in 2000, monitoring closely issues related to biotechnology, geographical
indications for wine, and copyright for new technologies and electronic commerce.
Rules of Origin
68. Australia wishes to see the Harmonization Work Programme on Rules of Origin produce an
acceptable, fair and workable set of rules within the agreed timeframe. Australia has made a strongWT/TPR/G/41 Trade Policy Review
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commitment to achieve this objective in the WTO Committee on Rules of Origin and in the Technical
Committee on Rules of Origin in Brussels, both of which it chairs. It acknowledges, however, that
progress remains slow, mainly because it is a very complex and difficult process.
Standards and Conformance
69. Among non-tariff barriers to trade, standards and conformance issues have an important
impact on Australian exports. Australia is therefore seeking - bilaterally, regionally and multilaterally- the alignment of standards, mutual recognition of conformity assessment, and good regulatory
practices.
IV. Future Direction of Australian Trade Policy
70. Australia is committed to trade liberalization and will continue to pursue trade policies which
support international efforts to achieve freer and more open trade through reduced tariff and non-tariffbarriers. To this end, Australia will remain an active participant in WTO trade liberalization efforts.
Similarly, the Government is fully committed to its tariff reduction program, aiming to meet the 1994
APEC Bogor Declaration goal of free and open tr ade by 2010/2020. It will also continue to pursue
domestic economic policies aimed at reducing structural impediments to economic development and
employment growth. Bilateral, regional and multilateral strategies will remain essential elements ofthe Government’s trade policy.
71. Australian trade and investment polices and measures will continue to reflect the
Government’s desire to encourage business to capitalise on opportunities arising from globalization,
improved market access conditions and the information revolution. Streamlined regulation, increased
transparency and broader consultation will provide clearer parameters in which to pursue trade and
investment opportunities.
72. Over the coming years, Australia will face numerous challenges in its international trade
relations. The economic uncertainties in East Asia will impact on Australian exports and economic
growth; accession of new members to the WTO and APEC may alter these organizations’ internal
dynamics; and we will need to guard against any resurgence of protectionist sentiments in the global
trading environment. The international trade agenda  will become more complex as issues affecting
domestic regulatory regimes and rules affecting investment are debated more frequently, and aspressures rise to include particularly sensitive issues. Australia believes that the best approach to
dealing with these issues is to maintain a flexible , pragmatic and focused trade policy; to highlight the
significance of the rules-based multilateral system in delivering prosperity; and to persist in efforts to
improve it.
73. By continuing to develop a framework for fair and transparent trade, and by addressing the
challenges of globalization and issues such as new technologies, the environment, investment and
competition, the international trading system can contribute toward sustainable economic
development for all economies. Australia is therefore keen to see broad-based multilateral
negotiations, embracing agriculture, services and industrial tariffs, commence by 2000. This will
complement other WTO work and benefit all WTO Members.
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