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Thailand-Australia Free Trade Agreement

This document provides an overview of the trade and tariff arrangements between Thailand and Australia under the Thailand-Australia Free Trade Agreement. It discusses the trade balance, exports and imports of various product categories such as industrial products, textiles, plastics, and iron and steel. The tariff reduction schedules and rules of origin for these products are also outlined.

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Thailand-Australia Free Trade Agreement

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  1. Thailand-Australia Free Trade Agreement Fiscal Policy Office, Ministry of Finance Dr. Somchai Sujjapongse, Deputy Director General June 21, 2004

  2. Exports, Imports and Trade Balance Million Baht Year 2003 Total Exports = 3,334 Billion Baht Total Imports = 3,138 Billion Baht Trade Balance = 196 Billion Baht Million Baht Trade with Australia Exports = 89.7 Billion Baht (2.7%) Imports = 65.6 Billion Baht (2.1%) Trade Balance = 24.1 Billion Baht

  3. Industrial Products: Exports

  4. Industrial Products: Imports

  5. Vehicles, Parts and Accessories(Chapter 87) Year 2003 World = 171.9 Billion Baht Australia = 25.4 Billion Baht Exports 25.9% 23.0% 14.8% 0.2% 13.0% 10.1% 47.8% World = 130.8 Billion Baht Australia = 0.3 Billion Baht Imports

  6. Vehicles, Parts and Accessories(Chapter 87) Million Baht 8703:Motor vehicles for the transport of persons (<10 persons) 8708:Parts and accessories 8704:Motor vehicles for the transport of goods Exports

  7. Tariff Structure Tariff Rate Avg. 33%

  8. Thailand’s Tariff Reduction Schedule • On January 1, 2005, 38% of products in • chapter 87 will have their tariff rates reduced • to 0%. • All of the tariff rates on vehicles and parts in • chapter 87 will be reduced to 0% by 2010.

  9. Thailand’s Tariff Reduction Schedule 8703:Motor vehicles for the transport of persons (<10 persons) - Of a cylinder capacity not exceeding 3,000 cc 8703:Motor vehicles for the transport of persons (<10 persons) - Of a cylinder capacity exceeding 3,000 cc 8704: Motor vehicles for the transport of goods 8708:Parts and accessories

  10. Australia’s Tariff Reduction Schedule • Australia will reduce its tariff rates on vehicles • from 5-15% to 0% on January 1, 2005. • For some parts and accessories in chapter 87, • in particular 8708, tariff rates will be reduced to • 5% in 2005-2009 and reduced to 0% by 2010.

  11. Rules of Origin • For vehicles: Substantial Transformation (Change • to Heading) with a Regional Value Content of not less • than 40 percent • For parts and accessories (8708): Substantial • Transformation (Change to Sub-Heading) with a • Regional Value Content of not less than 40 percent • For parts and accessories (8714): Substantial • Transformation (Change to Sub-Heading from any • other Heading)

  12. Textiles and Textile Articles(Chapter 50-63) World: Year 2003 Exports Exports = 229.5 Billion Baht Imports Imports = 100.6 Billion Baht

  13. Textiles and Textile Articles(Chapter 50-63) Australia Exports: 2.6 Billion Baht (1.2% of Total Textile Exports) Imports:6.0 Billion Baht (6.0%)

  14. Tariff Structure Tariff Rate (%) Australia Thailand

  15. Thailand’s Tariff Reduction Schedule • On January 1, 2005, 15% of textile product • categories will have their tariff rates reduced to 0%. • 58% of the textile product categories will • have their tariff rates reduced to 0% by 2010, • and the tariff rates of the other 27% will be • reduced to 0% in 2015.

  16. Australia’s Tariff Reduction Schedule • For apparel items and some finished textiles • with current tariffs of 25%, Australia will reduce • the tariffs to 12.5% on January 1, 2005. Tariffs will • be further reduced to 5% in 2010, and eliminated • in 2015.

  17. Australia’s Tariff Reduction Schedule • For textiles with tariffs at 10% and 15%, • Australia will reduce the tariffs to 5% on • January 1, 2005, and eliminate the tariffs • in 2010.

  18. Rules of Origin • Substantial Transformation and • Regional Value Content of not less than • 55 percent At least 30 percent of value of a textile product is from Thailand. The other 25 percent of value of the product can come from developing countries.

  19. Plastic and Articles thereof (Chapter 39) Year 2003 Exports World = 141.8 Billion Baht Australia = 6.9 Billion Baht Imports World = 126.4 Billion Baht Australia = 0.7 Billion Baht

  20. Plastic and Articles thereof (Chapter 39) 3901: Polymers of ethylene 3923: Plastic articles for packing of goods, lids, caps, and other closures Exports

  21. Tariff Structure Tariff Rate (%) Australia Thailand

  22. Thailand’s Tariff Reduction Schedule • Approximately 10% of plastic products • will have their tariff rates reduced to 0% • on January 1, 2005, and the other 90% will • have their tariff rates reduced to 0% by 2010.

  23. Australia’s Tariff Reduction Schedule • For plastic and chemical items with current • tariffs of 5%, Australia will eliminate the tariffs • in 2008.

  24. Rules of Origin • Product of a chemical reaction or • Substantial Transformation • Substantial Transformation and Regional • Value Content (40% by weight)

  25. Iron and Steel (Chapter 72-73) Year 2003 Exports World = 74.4 Billion Baht Australia = 3.6 Billion Baht Imports World = 234.3 Billion Baht Australia = 5.7 Billion Baht

  26. Iron and Steel (Chapter 72-73)

  27. Tariff Structure Tariff Rate (%) Australia Thailand

  28. Thailand’s Tariff Reduction Schedule • For semi-finished products (7207), waste and • scrap (7204), and flat rolled products of stainless • steel (7219), tariff rates will be reduced to 0% on • January 1, 2005 • For angles, shapes and sections of iron or non- • alloy steel (7216):

  29. Thailand’s Tariff Reduction Schedule • For flat-rolled products of iron or non-alloy steel, • hot rolled (7216): • For other tubes, pipes and hollow profiles of • iron or steel (7306):

  30. Thailand’s Tariff Reduction Schedule • For other articles of iron or steel (7326):

  31. Australia’s Tariff Reduction Schedule • Nearly all of iron and steel products will have • their tariffs reduced to 0% on January 1, 2005. • For wire of iron or steel (7217), some of tubes and • pipes (7306), Australia will bind its current 4% • tariffs through 2009, before elimination in 2010. • For springs and their leaves (7320), tariff rates • will be reduced from 10% to 5% on January 1, • 2005 and further reduced to 0% in 2010

  32. Rules of Origin • Substantial Transformation • - Change to subheading from any other • heading • - Change to heading from any other • heading • - Change to subheading from any other • subheading

  33. Thank You

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