U.S.-Australia Free Trade Agreement

How U.S. Companies Can Benefit

After the U.S. Senate and House of Representatives approved the U.S.-Australia Free Trade Agreement (FTA), President Bush signed implementing legislation on August 3, 2004. Both houses of the Australian Parliament approved implementing legislation on August 13, 2004.

The Agreement entered into force on January 1, 2005.

On the day the FTA entered into effect, tariffs that averaged 4.3 percent were eliminated on more than 99 percent of the tariff lines for U.S. manufactured goods exports to Australia. Exports of these goods account for 93 percent of total U.S. goods sales in Australia's market, and reducing tariffs will create new export opportunities for America's manufacturers. With virtually all U.S. manufactured exports becoming duty-free immediately, the National Association of Manufacturers (NAM) estimates that the manufacturing sector could sell $2 billion more per year to Australia and that U.S. national income could grow by nearly that much.

This is the most significant immediate reduction of industrial tariffs ever achieved in a U.S. FTA and will provide immediate benefits for America's manufacturing workers and companies. Beyond this, the FTA affords substantial benefits in a broad range of other sectors as well. Markets for services such as life insurance and express delivery will be opened; intellectual property will be better protected; American investments will be facilitated through predictable access and a stable business environment. For the first time in many sectors, American firms will be allowed to compete for Australia's government purchases on a nondiscriminatory basis. All U.S. farm exports - nearly $700 million last year - will go duty-free to Australia, benefiting many sectors such as processed foods, fruits and vegetables, corn, and soybeans. The FTA also makes advances in e-commerce and pharmaceutical market access. A summary describing all of these benefits is available at the USTR website.

In order to take advantage of the benefits for U.S. goods under this Agreement, exporters will need to understand how to determine that their goods are "originating," that is, how they qualify for preferential duty treatment under the U.S.-Australia FTA Rules of Origin.

The concept of "originating" goods can be a complicated one. The details are in the text of the U.S.-Australia FTA. Details regarding how Australia determines whether goods are originating can be found at the Australia Customs Service website, www.customs.gov.au. Click on the following links for information on how to determine if your product qualifies for preferential tariff treatment, how to use the tariff elimination schedule, how to document origin, and frequently asked questions about the Agreement.

The Department of Commerce's Market Access and Compliance offices will be monitoring this Agreement to ensure that Australia fully complies with its trade obligations. If you encounter problems under the U.S.-Australia FTA, please contact our Agreements Compliance office.

Additional Resources

United States Trade Representative U.S.-Australia FTA website
Australia Department of Foreign Affairs and Trade U.S.-Australia FTA website
Textile and Apparel Information
Tariff Elimination
Frequently Asked Questions
Rules of Origin
Declaring Origin
U.S. Commercial Service Australia Website