Gillard Government Trade Policy Statement - Australian Industry Group

Attachment: Government responses torecommendations of the Productivity Commissionreport on bilateral and regional trade agreementsRecommendationsRecommendation 1: The Australian Government should onlypursue bilateral and regional trade agreements where they are likelyto:Government responseAgreed – consistent with theapproach articulated in theStatement.• afford significant net economic benefits; and• be more cost-effective than other options for reducing tradeand investment barriers, including alternative forms ofbilateral and regional action.Recommendation 2: The Australian Government should ensurethat any bilateral and regional trade agreement it negotiates:• as far as practicable, avoids discriminatory terms andconditions in favour of arrangements based on nondiscriminatory(most-favoured-nation) provisions;Agreed - consistent with theapproach articulated in theStatement.Chapter 12• does not preclude or prejudice similar arrangements withother trading partners;• and does not establish treaty obligations that could inhibit ordelay unilateral, plurilateral or multilateral reform.Recommendation 3: The Australian Government should adoptthe composite model for rules to determine origin in merchandisetrade, as in AANZFTA, as the basis for rules of origin in any futurepreferential trade agreement. In adopting this model:Agreed.• a choice of Regional Value Content and Change in TariffClassification rules for determining origin should be affordedfor each item of merchandise;• the least restrictive variant of each test should be adopted,consistent with preventing trade deflection; andChapter 13Chapter 14• Australia should seek a waiver to rules of originrequirements where the difference between the mostfavoured-nationtariff rates in the partner countries is 5percentage points or less.Recommendation 4: The Australian Government should notinclude matters in bilateral and regional trade agreements thatwould serve to increase barriers to trade, raise costs or affectestablished social policies without a comprehensive review of theimplications and available options for change.Agreed - consistent withapproach articulated in theStatement.18