Congress Approves Implementing Legislation for the U.S.-Australia FTA

According to a statement by U.S. Trade Representative (USTR) Zoellick, under the terms of the U.S.-Australia FTA, more than 99% of the manufactured goods traded between the U.S. and Australia will be duty-free on day one, making the U.S.-Australia FTA the most significant immediate reduction of industrial tariffs ever achieved in a U.S. FTA.

(In order for this FTA to be implemented, H.R. 4759 must now be approved (enacted) by the President, which is expected.

The President must also issue a proclamation for its implementation. According to H.R. 4759 and USTR sources, the U.S. and Australia must exchange notes on the FTA prior to the issuance of this proclamation.)

Goal is for U.S.-Australia FTA to Take Effect on January 1, 2005

Administration sources continue to state that although it is not yet known when the U.S.-Australia FTA will enter into force, the "goal" is to implement it on January 1, 2005.

Highlights of H.R. 4759

According to a House Ways and Means Committee summary, "highlights" of H.R. 4759 include (partial list):

Tariff modifications under U.S.-Australia FTA. H.R. 4759 provides authority for the President to proclaim tariff modifications to carry out the U.S.-Australia FTA.

Rules of origin. H.R. 4759 also sets out the rules of origin for goods to qualify for preferential treatment under the U.S.-Australia FTA. In particular, the U.S.-Australia FTA would require a "yarn forward" rule of origin for most textile and apparel goods.

Agricultural "additional duty" safeguard measures. H.R. 4759 provides for the imposition by the U.S. of agricultural safeguard measures, in the form of additional duties, on certain horticultural goods and beef goods.

Exemption from MPF, enforcement authority to prevent textile and apparel transshipment. H.R. 4759 also provides for the exemption from the Customs merchandise processing fee (MPF) for Australian goods and enforcement authority to prevent circumvention of textile or apparel requirements.

Temporary import relief when increased imports from Australia, including textiles and apparel, cause injury. H.R. 4759 also provides a temporary mechanism to impose import relief (i.e., increased duties or suspension of further duty reductions) when increased quantities of Australian imports are a substantial cause of serious injury or threat of serious injury to the domestic industry. In addition, H.R. 4759 provides a special safeguard relief procedure for textile and apparel imports. Finally, when conducting a global safeguard action under Section 201 of the Trade Act of 1974 (P.L. 93-618) (i.e., "Section 201" action), the President would be able to exclude Australian imports if they are not a substantial cause of serious injury or threat of serious injury to the industry.

See future issues of ITT for additional details on H.R. 4759, as provided in the House Ways and Means Committee's report on the legislation.

H.R. 4759 available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=108_cong_bills&docid=f:h4759rh.txt.pdf.

House Ways and Means Committee summary (dated 07/09/04) available at

http://waysandmeans.house.gov/media/pdf/australia/hr4579sectionbysection.pdf.

House Ways and Means Committee report (H. Rept. 108-597) available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=108_cong_reports&docid=f:hr597.108.pdf.

Final text of U.S.-Australia FTA available at http://www.ustr.gov/new/fta/Australia/final/index.htm.

Fact sheets, statements, and other information regarding the U.S.-Australia FTA are available at http://www.ustr.gov/new/fta/australia.htm.