Last year the Trans-Pacific Partnership agreement had a few hurdles you may have heard about. However, it has been brought back to life with a few tweaks and fewer tweets.
So here it is…
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP11) was signed on the 8th of March 2018 in Santiago and brings together 11 countries: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, and Vietnam.
Although it excludes the United States, the agreement brings new opportunities and benefits to Australian importers and exporters.
In Australia, the TPP-11 will be reviewed by the Joint Standing Committee on Treaties, and be ratified by the parliament before coming into force. A fair guess on when this will likely take place is later this year.
Once in force, the benefits associated with the TPP-11 for Australian exporters and importers include:
- Enhanced facilitation of trade between parties
- Provide tariff relief by eliminating 98 percent of tariffs in the TPP-11 region
- Open up market access to for Australian between Australia and two new parties Canada and Mexico
The agreement brings new opportunities and benefits to Australian businesses and equally a fair share of compliance risks.
Like all trade agreements, importers wanting to claim preferential tariff treatment under the TPP-11 must comply with the rules of origin, consignment provisions, and the origin certification requirements.
The rules of origin are similar to existing modern Free Trade Agreements involving Australia: to qualify eligible goods must be either wholly obtained, produced entirely in one or more TPP-11 parties, or meet the product-specific rules of origin for their respective tariff classification.
In addition, preference goods must comply with the consignment rules of the TPP-11, which requires that the originating goods must not undergo any operation outside TPP-11 countries, other than unloading, reloading, or storage, whilst remaining under the customs control of the relevant border authority of a non-party.
Importantly, the TPP allows importers, as well as exporters and manufacturers, to produce and submit origin documentation, thus allowing flexibility and potentially reduced processing delays.
We encourage businesses to assess the opportunities and associated risks, and to make the most of the agreement, once in force.
If your business needs assistance in understanding or managing the risks and opportunities, please contact us.
