Title
Free Trade Agreement between the Government of Australia and the Government of the Republic of Korea
Preamble
The Government of Australia (hereinafter referred to as "Australia") and the Government of the Republic of Korea (hereinafter referred to as "Korea") (hereinafter referred to as "the Parties"):
Reinforcing the longstanding ties of friendship and cooperation between them; Envisaging that a free trade area will create an expanded and secure market for goods and services in their territories and a stable and predictable environment for investment, thus enhancing the competitiveness of their firms in global markets;
Encouraging a closer economic partnership that will bring economic and social benefits, create new employment opportunities, and improve living standards for their people;
Seeking to establish clear and mutually advantageous rules governing their trade and investment and to reduce or eliminate the barriers to trade and investment between them;
Promoting a predictable, transparent, and consistent business environment that will assist enterprises in planning effectively and using resources efficiently;
Desiring to strengthen a mutually beneficial cooperative framework to foster creativity and innovation, and promote stronger linkage in and between dynamic sectors of their economies;
Recognising that expanding the economic relationship can assist in promoting sustainable development in its economic, social and environmental dimensions;
Building on their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization and other multilateral, regional, and bilateral agreements and arrangements to which the Parties are party; and
Committed to furthering their economic leadership in the Asia-Pacific region, in particular by seeking to reduce barriers to trade and investment in the region;
Have agreed as follows:
Body
Chapter 1. Initial Provisions and Definitions
Section A. Initial Provisions
Article 1.1. Establishment of a Free Trade Area
Consistent with Article XXIV of GATT 1994 and Article V of GATS, the Parties hereby establish a free trade area in accordance with the provisions of this Agreement.
Article 1.2. Relation to other Agreements
1. Each Party affirms its existing rights and obligations with respect to each other under existing bilateral and multilateral agreements to which both Parties are party, including the WTO Agreement.
2. This Agreement shall not be construed to derogate from any international legal obligation between the Parties that provides for more favourable treatment of goods, services, investments, or persons than that provided for under this Agreement.
3. Unless otherwise provided in this Agreement, in the event of any inconsistency between this Agreement and other agreements to which both Parties are party, the Parties shall immediately consult with each other with a view to finding a mutually satisfactory solution, taking into consideration general principles of international law.
Article 1.3. Extent of Obligations
1. In accordance with customary international law and unless otherwise provided in this Agreement, for the purposes of determining a Party's compliance with this Agreement, the exercise of, or failure to exercise, governmental authority of that Party:
(a) by a central, regional or local level of government; or
(b) delegated by a central, regional or local level of government, shall be considered an exercise of, or failure to exercise, governmental authority by a Party.
2. For greater certainty, and unless otherwise provided in this Agreement, the national treatment obligations included in this Agreement shall apply to a central, regional and local level of government, and the treatment to be accorded by a Party at a regional or local level of government means treatment no less favourable than the most favourable treatment that the regional or local level of government accords to any goods, services, persons or investments of investors, as described in those national treatment obligations, of the Party of which it forms a part.
Section B. General Definitions
Article 1.4. Definitions
For the purposes of this Agreement, unless otherwise specified:
central level of government means:
(a) for Australia, the Commonwealth Government; and
(b) for Korea, the central level of government;
covered investment means, with respect to a Party, an investment, as defined in relevant Chapters, in its territory of an investor of the other Party that is in existence as of the date of entry into force of this Agreement or established, acquired, or expanded thereafter;
customs administration means:
(a) for Australia, the Australian Customs and Border Protection Service, or its successor; and
(b) for Korea, the Korea Customs Service, or its successor;
customs duty includes any duty or charge of any kind imposed on, or in connection with, the importation of a good of the other Party, including any form of surtax or surcharge imposed on or in connection with such importation, but does not include any:
(a) charge equivalent to an internal tax imposed consistently with Article II:2 of GATT, or any equivalent provision of a successor agreement to which both Parties are party;
(b) additional customs duty collected as a result of a measure consistent with Chapter 6 (Trade Remedies);
(c) fee or other charge in connection with importation commensurate with the cost of service rendered; or
(d) premiums offered or collected on an imported good arising out of any tendering system in respect of the administration of quantitative import restrictions or tariff rate quotas established in Appendix 2-A-1;
Customs Valuation Agreement means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, in Annex 1A of the WTO Agreement;
days means calendar days;
enterprise means any entity constituted or organised under applicable law, whether or not for profit, and whether privately or governmentally owned or controlled, including any corporation, trust, partnership, sole proprietorship, joint venture, association, or similar organisation;
enterprise of a Party means an enterprise constituted or organised under the law of a Party; existing means in effect on the date of entry into force of this Agreement;
freely usable currency means "freely usable currency" as determined by the International Monetary Fund under its Articles of Agreement,
GATS means the General Agreement on Trade in Services, in Annex 1B of the WTO Agreement;
GATT 1994 means the General Agreement on Tariffs and Trade 1994, in Annex 1A of the WTO Agreement;
goods of a Party means domestic products as these are understood in GATT 1994 or such goods as the Parties may agree, and includes originating goods of that Party;
government procurement means the process by which a government obtains the use of or acquires goods or services, or any combination thereof, for governmental purposes and not with a view to commercial sale or resale or use in the production or supply of goods or services for commercial sale or resale;
Harmonized System (HS) means the Harmonized Commodity Description and Coding System governed by the International Convention on the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes and Chapter Notes, as adopted and implemented by the Parties in their respective tariff laws;
Import Licencing Agreement means the Agreement on Import Licencing Procedures, in Annex 1A of the WTO Agreement;
Joint Committee means the Joint Committee established in Article 21.3 (Joint Committee);
local level of government means:
(a) for Australia, any government below a regional level of government; and
(b) for Korea, a local government as defined in the Local Autonomy Act;
measure includes any law, regulation, procedure, requirement, or practice; national means:
(a) for Australia, a natural person who is an Australian citizen as defined in the Australian Citizenship Act 2007 or a permanent resident as defined in accordance with the Migration Regulations 1994; and
(b) for Korea, a Korean national within the meaning of the Nationality Act;
originating means qualifying under the rules of origin set out in Chapter 3 (Rules of Origin and Origin Procedures);
person means a natural person or an enterprise; person of a Party means a national or an enterprise of a Party;
preferential tariff treatment means the duty rate applicable under this Agreement to an originating good;
regional level of government means:
(a) for Australia, a state of Australia, the Australian Capital Territory, or the Northern Territory; and
(b) for Korea, "regional level of government" is not applicable;
Safeguards Agreement means the Agreement on Safeguards, in Annex 1A of the WTO Agreement;
sanitary or phytosanitary measure means any measure referred to in paragraph 1 of Annex A of the SPS Agreement;
SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures, in Annex 1A of the WTO Agreement;
state enterprise means an enterprise that is owned, or controlled through ownership interests, by a Party;
TBT Agreement means the Agreement on Technical Barriers to Trade, in Annex 1A of the WTO Agreement;
territory means:
(a) for Australia, the territory of Australia:
(i) excluding all external territories other than the Territory of Norfolk Island, the Territory of Christmas Island, the Territory of Cocos (Keeling) Islands, the Territory of Ashmore and Cartier Islands, the Territory of Heard Island and McDonald Islands, and the Coral Sea Islands Territory; and
(ii) including Australia's territorial sea, contiguous zone, exclusive economic zone and continental shelf over which Australia exercises sovereign rights or jurisdiction in accordance with international law; and
(b) for Korea, the land, maritime, and air space under its sovereignty, and those maritime areas, including the seabed and subsoil adjacent to and beyond the outer limit of the territorial seas over which it may exercise sovereign rights or jurisdiction in accordance with international law and its law;
TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights, in Annex 1C of the WTO Agreement;
WTO means the World Trade Organization; and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994.
Chapter 2. Trade In Goods
Article 2.1. Scope
Unless otherwise provided, this Chapter shall apply to trade in goods of a Party.
Article 2. National Treatment
Each Party shall accord national treatment to the goods of the other Party in accordance with Article IIT of GATT 1994, including its interpretive notes, and to this end Article I of GATT 1994, including its interpretive notes, is incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.3. Elimination of Customs Duties
1. Unless otherwise provided in this Agreement, neither Party shall increase any existing customs duty, or adopt any new customs duty, on an originating good.
2. Unless otherwise provided in this Agreement, each Party shall progressively eliminate its customs duties on originating goods in accordance with its Schedule to Annex 2-A.
3. If at any moment a Party reduces its applied most-favoured-nation (hereinafter referred to as "MFN") customs duty rate after the date of entry into force of this Agreement, that duty rate shall apply as regards trade covered by this Agreement if and for as long as it is lower than the customs duty rate calculated in accordance with its Schedule included in Annex 2-A.
4. On request of a Party, the Parties shall consult to consider accelerating the elimination of customs duties set out in their Schedules to Annex 2-A. An agreement by the Parties to accelerate the elimination of a customs duty on a good shall supersede any duty rate or staging category determined in accordance with their Schedules to Annex 2-A for that good when approved by each Party in accordance with its applicable legal procedures.
5. For greater certainty, a Party may raise a customs duty to the level established in its Schedule to Annex 2-A following a temporary unilateral reduction.
Article 2.4. Goods Re-entered after Repair or Alteration
1. Neither Party shall apply a customs duty to a good, regardless of its origin, that re-enters its territory after that good has been temporarily exported from its territory to the territory of the other Party for repair or alteration, regardless of whether the repair or alteration:
(a) could be performed in the territory of the Party from which the good was exported for repair or alteration; or
(b) may have resulted in an increased value of the good.
2. Neither Party shall apply a customs duty to a good, regardless of its origin, admitted temporarily from the territory of the other Party for repair or alteration.
3. For the purposes of this Article, repair or alteration does not include an operation or process that:
(a) destroys a good's essential characteristics or creates a new or commercially different good; or
(b) transforms an unfinished good into a finished good.
Article 2.5. Duty-free Entry of Commercial Samples of Negligible Value and Printed Advertising Materials
Each Party shall grant duty-free entry to commercial samples of negligible value, and to printed advertising materials, imported from the territory of the other Party, regardless of their origin, but may require that:
(a) the samples be imported solely for the solicitation of orders for goods, or services provided from the territory, of the other Party or a non-Party; or
(b) the advertising materials be imported in packets that each contain no more than one copy of each such material and that neither the materials nor the packets form part of a larger consignment.
Article 2.6. Import and Export Restrictions
1. Unless otherwise provided in this Agreement, neither Party shall adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, except in accordance with Article XI of GATT 1994, including its interpretive notes, and to this end Article XI of GATT 1994, including its interpretive notes, is incorporated into and made part of this Agreement, mutatis mutandis.
2. Where a Party proposes to adopt an export prohibition or restriction on foodstuffs or energy and mineral resources in accordance with paragraph 2(a) of Article XI of GATT 1994, the Party shall:
(a) seek to limit such proposed prohibition or restriction to the extent necessary, giving due consideration to its possible effects on the other Party's foodstuff or energy and mineral resources security;
(b) provide notice in writing, as far in advance as practicable, to the other Party of such proposed prohibition or restriction and its reasons together with its nature and expected duration; and
(c) on request, provide the other Party with a reasonable opportunity for consultation with respect to any matter related to the proposed prohibition or restriction.
Article 2.7. Import Licensing
1. Neither Party shall adopt or maintain a measure that is inconsistent with the Import Licensing Agreement.
2. Promptly after the date of entry into force of this Agreement, each Party shall notify the other Party of its existing import licensing procedures, if any. The notification shall:
(a) include the information specified in Article 5 of the Import Licensing Agreement; and
(b) be without prejudice as to whether the import licensing procedure is consistent with this Agreement.
3. Prior to applying any new or modified import licensing procedure, a Party shall publish the new procedure or modification on an official government Internet site or in a single official journal. To the extent possible, the Party shall do so at least 21 days before the new procedure or modification takes effect.
Article 2.8. Administrative Fees and Formalities
1. Each Party shall ensure, in accordance with Article VIU:1 of GATT 1994, including its interpretive notes, that all fees and charges of whatever character (other than customs duties, charges equivalent to an internal tax or other internal charges applied consistently with Article I:2 of GATT 1994, and any additional customs duty collected as a result of a measure consistent with Chapter 6 (Trade Remedies)) imposed on or in connection with importation or exportation are limited in amount to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or a taxation of imports or exports for fiscal purposes.
2. Neither Party shall require consular transactions, including related fees and charges, in connection with the importation of any good of the other Party.
3. Each Party shall make available and maintain through the Internet a current list of the fees and charges it imposes in connection with importation or exportation.
Article 2.9. Export Duties, Taxes or other Charges
Neither Party shall adopt or maintain any duty, tax or other charge on the export of any good to the territory of the other Party, unless the duty, tax or charge is also adopted or maintained on the good when destined for domestic consumption.
Article 2.10. Non-tariff Measures
1. Further to Chapter 19 (Transparency), the Parties recognise the importance of ensuring the transparency of non-tariff measures affecting trade between the Parties and that any such measures should not create an unnecessary obstacle to trade between the Parties.
2. To this end, the Committee on Trade in Goods established in Article 21.4 (Committees and Working Groups) shall, when a Party identifies a specific non-tariff measure, review that measure. The Committee on Trade in Goods shall review the non-tariff measure only after either Party objectively demonstrates that the relevant coordination mechanism, technical meeting, committee or working group, if any, that is most closely related to such a measure has failed to produce a satisfactory resolution within a reasonable period of time.
3. The Committee on Trade in Goods shall, for the non-tariff measure referred to in paragraph 2, consider approaches that may better facilitate trade between the Parties and present to the Parties the results of its consideration, including any recommendations, preferably within 12 months. If necessary, the results of the consideration and recommendations of the Committee on Trade in Goods shall be submitted to the next meeting of the Joint Committee for consideration and/or action.
Article 2. Committee on Trade In Goods
1. The functions of the Committee on Trade in Goods established in accordance with Article 21.4 (Committees and Working Groups) shall include:
(a) promoting trade in goods between the Parties, including through consultations on accelerating tariff elimination under this Agreement and other issues as appropriate; and
(b) addressing tariff and non-tariff barriers to trade in goods between the Parties and, if appropriate, referring such matters, with any recommendation, to the Joint Committee for its consideration.
2. The Committee shall meet on request of a Party or the Joint Committee to consider any matters relating to trade in goods.
Article 2.12. Definitions
For the purposes of this Chapter:
commercial samples of negligible value means commercial samples having a value, individually or in the aggregate as shipped, of not more than the amount specified in a Party's laws, regulations or procedures governing temporary admission, or so marked, torn, perforated, or otherwise treated that they are unsuitable for sale or use except as commercial samples;
consular transactions means requirements that goods of a Party intended for export to the territory of the other Party must first be submitted to the supervision of the consul of the importing Party in the territory of the exporting Party for the purpose of obtaining consular invoices or consular visas for commercial invoices, certificates of origin, manifests, shippers' export declarations, or any other customs documentation required on or in connection with importation;
import licensing means an administrative procedure requiring the submission of an application or other documentation (other than that generally required for customs clearance purposes) to the relevant administrative body as a prior condition for importation into the territory of the importing Party; and
printed advertising materials means those goods classified in Chapter 49 of the Harmonized System, including brochures, pamphlets, leaflets, trade catalogues, yearbooks published by trade associations, tourist promotional materials and posters, that are used to promote, publicise, or advertise a good or service, or are essentially intended to advertise a good or service, and are supplied free of charge.
ANNEX 2-A. Elimination of customs duties
Section A. Tariff Schedule of Australia
1. Relation to the Australian Customs Tariff Act 1995, The items set forth in Section B of this Annex are generally expressed in terms of the corresponding items in Schedule 3 to the Australian Customs Tariff Act 1995 (Tariff Act) and the interpretation of the items in Section B of this Annex, including the product coverage of subheadings in Section B of this Annex, shall be governed by the Tariff Act. To the extent that the items set forth in Section B of this Annex are identical to the corresponding items in Schedule 3 of the Tariff Act the items in Section B of this Annex shall have the same meaning as the corresponding items in the Tariff Act.
2. Base Rates of Customs Duty. The base rates of customs duty set out in this schedule reflect the Australian most-favoured-nation rates of duty in effect on 1 January 2010.
3. Staging. The following staging categories apply to the elimination of customs duties by Australia pursuant to Article 2.3:
(a) category "0" — customs duties on originating goods provided for in the items in staging category "0" shall be eliminated entirely and such goods shall be free of customs duty on the date of entry into force of this Agreement;
(b) category "3" — customs duties on goods in category 3 shall be reduced to 3.3 per cent on the date this Agreement enters into force and shall then be reduced to 1.7 per cent on 1 January of year two, and such goods shall be free of customs duty, effective 1 January of year three;
(c) category "3A" — the ad valorem component of compound customs duties on goods in category 3A shall be reduced to 3.3 per cent on the date this Agreement enters into force and shall then be reduced to 1.7 per cent on 1 January of year two. The specific component of compound customs duties on goods in category 3A shall be reduced to A$8,000 on the date this Agreement enters into force and shall then be reduced to A$4,000 on 1 January of year two. Such goods shall be free of customs duty, effective 1 January of year three;
(d) category "S" — customs duties on goods in category 5 shall be reduced to 4 per cent on the date this Agreement enters into force and shall then be removed in four equal annual stages beginning on 1 January of year two, and such goods shall be free of customs duty, effective 1 January of year five;
(e) category "8A" — customs duties on goods in category 8A shall be removed in five equal annual stages beginning on 1 January of year four, and such goods shall be free of customs duty, effective 1 January of year eight;
4. The base rate of customs duty and staging category for an item are indicated for the item in Australia's Schedule.
5. Interim staged rates shall be rounded down, at least to the nearest tenth of a percentage point or, if the rate of duty is expressed in monetary units, at least to the nearest Australian dollar.
6. For the purposes of this Schedule, year one means the year of entry into force of this Agreement.
7. For the purposes of this Schedule, beginning in year two, each annual stage of tariff reduction shall take effect on 1 January of the relevant year.
Section B. Tariff Schedule of Korea
1. Relation to the Harmonized Tariff Schedule of Korea (HSK). The provisions of this Schedule are generally expressed in terms of the HSK, and the interpretation of the provisions of this Schedule, including the product coverage of subheadings of this Schedule, shall be governed by the General Notes, Section Notes, and Chapter Notes of the HSK. To the extent that provisions of this Schedule are identical to the corresponding provisions of the HSK, the provisions of this Schedule shall have the same meaning as the corresponding provisions of the HSK.
2. Base Rates of Customs Duty. The base rates of customs duty set out in this Schedule reflect the Korean Customs Duty most-favoured-nation rates of duty in effect on 1 January 2010.