U.S.-Australia Free Trade Agreement

Tariff Elimination Schedule

When the U.S.-Australia Free Trade Agreement (FTA) entered into force on January 1, 2005, 99 percent of qualifying U.S. manufactured consumer and industrial goods immediately became duty free. Additionally, all U.S. agricultural exports received immediate duty-free access. Duties and quotas on remaining U.S. products will be phased out over a period of up to 10 years. (Duties for qualifying Australian products exported to the United States will be phased out over a period of up to 18 years.)

To determine when products that qualify can enter Australia duty-free:

1) It is necessary to obtain the appropriate HS/Schedule B number for your product.

2) With this number it is then possible to check the Australia tariff elimination schedule to find out at what rate the duties on your product will be reduced. Each line item of the U.S. and Australian FTA tariff schedules is assigned a letter code that indicates the staging by which the current tariff for each item is reduced and ultimately eliminated. The schedules also note the base rate of customs duty, which is used to determine the starting point and interim rate at each stage of reduction for an item.

For importing goods from Australia to the United States, you would check the U.S. tariff schedule.

Staging Categories

Except as otherwise noted in the headnotes section to each tariff schedule, the codes are generally defined as follows:

Category A: Goods were duty-free immediately upon the date that the FTA entered into force, i.e., January 1, 2005.

Category B: Duties will be eliminated in four equal annual stages beginning January 1, 2005, and shall be duty-free effective January 1 of year four, i.e., 2008.

Category C: Duties will be eliminated in eight equal annual stages beginning on January 1, 2005, and shall be duty-free effective January 1 of year eight, i.e., 2012.

Category D: Duties will be eliminated in ten equal annual stages beginning on January 1, 2005, and shall be duty-free effective January 1 of year ten, 2014.

Category E: Goods already receiving duty-free treatment shall continue to receive duty-free treatment under the FTA.

Category T1: Duties for products in this category were reduced to 3 percent on January 1, 2005. They will remain 3 percent until December 31, 2009 and beginning January 1, 2010 duties will be zero.

Category Tx: Duties for products in this category were reduced to 5.5 percent on January 1, 2005. They will remain 5.5 percent until December 31, 2009. From January 1, 2010 through December 31, 2014 duties will be 3 percent. Beginning January 1, 2015 duties will be zero.

Category T2: Duties for products in this category were reduced to 8 percent on January 1, 2005. They will remain 8 percent through 2009. From January 1, 2010 through December 31, 2014 duties will be 3 percent. Beginning January 1, 2015 duties will be zero.

Category T3: Duties for products in this category were reduced to 15.5 percent on January 1, 2005. They will remain 15.5 percent through 2009. From January 1, 2010 through December 31, 2014 duties will be 8 percent. Beginning January 1, 2015 duties will be zero.

Category L: Duties will be eliminated in equal annual stages beginning on January 1, 2005 and shall be duty-free effective January 1, 2010.

Sample Calculations for Exports to Australia

The following examples are expressed in terms of the Customs Tariff Schedule of Australia, which is similar to the Harmonized Tariff Schedule of the United States (HTSUS), but is not exactly identical.

Tomato Juice or Paste (HS 2002.90.00): According to the Australian tariff schedule, this product has been designated Category A staging with a base rate of 5 percent. On January 1, 2005, this product, if qualifying as U.S. originating, became duty-free.

Footwear incorporating a protective metal toe-cap, (HS 6401.10.00): According to the Australian tariff schedule, this product has been designated Category D with a base rate of 15 percent. Beginning January 1, 2005, the duty will be reduced on a yearly basis in ten equal stages. Thus, in 2005 the duty will be 13.5 percent, in 2006 12 percent, in 2007 10.5 percent etc., until the product becomes duty-free on January 1, 2014.

Wetsuit (HS 6113.00.11): According to the Australian tariff schedule, this product has been designated Category Tx with a base rate of 10 percent. The duty of the product will be reduced to 5.5 percent on January 1, 2005. The duty will be 3% from January 1, 2010 through December 31, 2014. Beginning January 1, 2015 duties will be zero.