Rectification of Australia's World Trade Organization Schedule of Tariff Concessions (Schedule I-Australia)
4.1
Minor treaty actions are generally technical amendments to existing treaties which do not impact significantly on the national interest. They are presented to the Committee with a short explanatory statement and are published on the Committee’s website unless a request for confidentiality is received and agreed to by the Committee.
4.2
The Committee can choose to formally inquire into these treaty actions or accept them without a formal inquiry. Once considered they are incorporated into a report of the Committee at the next opportunity.
4.3
The Committee was asked to consider the Rectification of Australia's World Trade Organization Schedule of Tariff Concessions (Schedule I-Australia).
Proposed minor treaty action
4.4
The proposed minor treaty action would amend Australia’s schedule of bound tariff commitments annexed to the Marrakesh Protocol to the General Agreement on Tariffs and Trade 1994 to reflect the 2012 version of the Harmonized System. Australia’s schedule is currently made in the 2007 version of the Harmonized System.
4.5
According to the Explanatory Statement, the update would not lead to any change to how goods are treated at the Australian border, and would have no discernible practical, legal or financial effect on Australia.
Background
Schedules of tariff commitments
4.6
Schedules of tariff commitments, also referred to as ‘goods schedules’, are legal instruments that describe the treatment a World Trade Organization (WTO) Member must provide to traded goods of other WTO Members. Schedules specify ‘bound duties,’ which are the maximum tariffs that can be applied to goods imported from other WTO Members.
Harmonized System
4.7
The Harmonized System of internationally agreed and administered product nomenclature, facilitates trade by ensuring that internationally traded goods are identified in a consistent way. The Harmonized System is maintained by the World Customs Organization (WCO), which updates the classification of goods approximately every five years to reflect developments in technology and changes in trade patterns. Members of the WCO record their tariff schedules, including their WTO tariff commitments, using the Harmonized System.
4.8
The Harmonized System is governed by the International Convention on the Harmonized Commodity Description Coding System, and contains more than 5,000 commodity groups, each identified by a six digit code and supported by rules to ensure uniform classification. Versions of the Harmonized System are named according to the year in which they are amended. Since 1996 there have been six versions: 1996, 2002, 2007, 2012, 2017 and 2022.
4.9
Australia has used the Harmonized System since 1988 as the basis for its commodity classification for the import and export of goods, including for the purposes of determining the tariff applicable to an imported good.
Timing of the proposed minor treaty action
4.10
Australia’s proposed Harmonized System 2012 transposition was circulated to the WTO membership for review on 7 April 2022. In accordance with the procedures for rectification, WTO Members had three months from the date of circulation to raise an objection to the proposed rectification. Given no objections were raised during the three-month period, the changes would be certified by the WTO Director-General upon notification by Australia that it has completed its domestic procedures.
Reasons to take the treaty action
4.11
According to the Explanatory Statement, Australia is ‘obligated under WTO rules to update … [its] schedule of concessions to reflect domestic changes to commodity classifications which implement the updated HS [Harmonized System] nomenclature’.
4.12
In November 2021, the WTO General Council suspended the application of the obligation to Australia (and other WTO Members) until 31 December 2022.
Impact of the proposed minor treaty action
4.13
The Explanatory Statement specified no implementing legislation or domestic legislative changes would be required for this treaty action.
Conclusion
4.14
The Committee supports this minor treaty action and agreed that binding treaty action be taken.
Mr Josh Wilson MP
Chair
28 November 2022