The U.S.-Australia Free Trade
Agreement (FTA) entered into force on Jan. 1, 2005. Negotiations
for the FTA occurred between March 2003 and February 2004, and the
agreement was signed in Washington, DC, on May 14, 2004.
In 2005, the United States exported
a record of almost $555 million of agricultural products to Australia.
U.S. exports to Australia were at record levels in 2005 for red meat,
fresh and processed fruit and vegetables, tree nuts, pet food, vegetable
oil, and rice, due in part to reduced Australian tariffs under the FTA.
During the same period, the United States imported about $2.5 billion of
agricultural products from Australia. Since implementation, the
U.S.-Australia FTA has provided America’s farmers, ranchers, food
processors, and the businesses they support with improved and new access
to Australia’s 20 million consumers.
Overview of the Agreement
immediately eliminated all agricultural tariffs.
had maintained tariffs as high as 30 percent on certain dairy
products and tariffs of 4 to 5 percent on fresh and processed fruits
and vegetables, processed foods, some grains, oilseeds and other
States is liberalizing products covered by the FTA using a
combination of approaches.
- Duties on tariff-only products, which
are not subject to existing World TradeOrganization (WTO)
tariff-rate quotas (TRQs), are being phased out according to a
product-specific schedule. Phaseout was either immediate, or
will be in 4 years, 10 years or 18 years.
Tariffs on these products will be reduced in equal annual
installments over the phase-out period.
TRQs will also be used for products such as avocados, beef,
dairy, cotton, peanuts and tobacco. The details vary by
Agricultural safeguard measures are available for specific U.S.
Certain horticultural products not only
receive the longest tariff phase-out, but are also eligible for
automatic, price-based safeguards during the implementation period, in
the event of significant price decreases on imports from Australia.
These measures are similar to the price-based safeguards contained in
the U.S.-Chile FTA.
Beef will receive a volume-based safeguard
during the transition period and a price-based safeguard in the
The FTA affirms obligations
under the WTO Sanitary and Phytosanitary (SPS) Agreement. It
establishes an SPS Committee to enhance cooperation on SPS matters,
including a focus on regulatory processes related to SPS measures,
specific implementation issues concerning SPS matters, and other
The United States and
Australia will work to resolve SPS barriers to agricultural trade, in
particular for pork, poultry, citrus, apples, and stone fruit.
The Agreement establishes a new mechanism
for scientific cooperation between U.S. and Australian authorities to
resolve specific bilateral animal and plant health matters.
USDA’s Animal and Plant Health Inspection
Service (APHIS) and Biosecurity Australia operate a standing technical
working group to cooperate in the development of science-based measures
that affect trade between the two countries.
The Agreement contains
product-specific rules of origin, similar to those in the U.S. FTAs with
Chile, Central American countries, and Singapore.
eliminated all agricultural tariffs on:
With the publication of
Australia’s final risk assessment on Feb. 18, 2004, U.S. processed
pork and pork for processing also benefited from immediate tariff
In response to U.S. concerns
about Australia’s agricultural state trading enterprises (STEs),
Australia committed to working with the United States in the ongoing WTO
negotiations on agriculture to develop agreement on export competition
disciplines that eliminate restrictions on the right of entities other
than STEs to export.
Initially, Australia received
an FTA preferential TRQ for manufactured-type beef and immediate
elimination on the within-quota duty on Australia’s WTO country-specific
TRQ. The Agreement calls for a gradual opening of the TRQ to allow U.S.
beef exports to rebound from BSE. The FTA TRQ becomes operational when
U.S. beef exports exceed 2003 levels, or no later than the third year of
the Agreement, whichever comes first. In addition, the United
States and Australia agreed to cooperate in Codex and the International
Office of Epizootics (OIE) efforts to promote scientifically based
standards for BSE. The initial increase in imports from Australia under
the FTA TRQ was about 0.17 percent of U.S. beef production and 1.6
percent of current U.S. beef imports.
The within-quota duty for beef
products entered under the FTA preferential TRQs was eliminated
immediately. The phase-out for the over-quota duties for all beef will
take place from year 9 to year 18. In the post-transition period,
all beef products will receive duty-free treatment. A price-based
safeguard will be available for high-quality beef.
FTA preferential TRQs are
established for most dairy products currently subject to WTO
TRQs. There is no change in the U.S. most favored nation (MFN)
over-quota rates for these products. Market access is provided
through expansion of the quantities eligible for duty-free access under
the FTA TRQs. Several different FTA TRQs were established for
dairy products, due to the complexity of the sector. For example,
there are five different FTA TRQs for cheeses. The initial TRQ
quantities vary to reflect the complexity of the U.S. dairy industry.
Increases in imports from Australia under the FTA TRQs amount to about
0.2 percent of the annual value of U.S. dairy production. The FTA
TRQs expand by rates ranging from 3 to 6 percent annually. The
additional imports are not expected to affect the operation of the
Commodity Credit Corporation’s dairy price support programs.
Transitional FTA TRQs are
established for cotton, peanuts, and tobacco. Duty-free
access will be provided on initial
within-quota quantities, and the over-quota tariffs will be eliminated
over 18 years in equal annual steps.
Tariffs on other products,
such as canned fruit, dried onions and garlic, orange juice, grape
juice, canned asparagus, and tomato products and sauces, will be phased
out over 18 years. In addition, the agreement permits a
safeguard on certain horticultural products during the transition
period. The safeguard can be triggered when the price of imported
goods from Australia falls below historical levels, and additional
import duties may be applied. Wine tariffs will be phased out
under a harmonization formula, similar to that used in the U.S.-Chile
Australia FTA Commodity Fact Sheets
U.S.-Australia FTA Page