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 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 Industrial Products: Exports HS Cod e Exports to Australia (2003) Million Baht% 87Vehicles, parts and accessories 25,422.528.3 84 Machinery, mechanical appliances and parts 12,556.414.0 39Plastics and articles thereof 6,893.27.7 85 Electrical machinery, equipment and parts 5,463.46.1 01-97Total 89,744.1100.0

4. Industrial Products: Imports Industrial Products: Imports HS Cod e Imports from Australia (2003) Million Baht% 71 Precious stones, precious metals and articles thereof12,415.818.9 76Aluminum and articles thereof10,367.115.8 72Iron and steel5,043.17.7 27 Mineral fuels, mineral oils and products of their distillation3,657.65.6 52Cotton3,412.65.2 01-97Total65,578.0100.0

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

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

7. Tariff Structure 8701 Tractors 5%, 20% 8702 Motor vehicles for the transport of persons (>10 persons) 40% 8703 Motor vehicles for the transport of persons (<10 persons) 80% 8704 Motor vehicles for the transport of goods 40% 8705 Special purpose motor vehicles 10%, 40% 8706 Chassis fitted with engines, for 87.01 to 87.05. 30% 8707 Bodies (including cabs), for 87.01 to 87.05. 40%, 80% 8708 Parts and accessories of the motor vehicles of 87.01 to 87.05. 10%, 30% 8709 Works trucks; tractors used on railway station platforms; parts 10%, 20% 8710 Motorized tanks; parts 0% 8711 Motorcycles and cycles; side-cars. 60% 8712 Bicycles and other cycles, not motorized. 30% 8713 Carriages for disabled persons 0% 8714 Parts and accessories of vehicles of 87.11 to 87.13. 25%, 30% 8715 Baby carriages and parts thereof 30% 8716 Trailers ; other vehicles, not mechanically propelled; parts 10%, 25%, 40% Tariff Rate Avg. 33%

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

9. Thailand’s Tariff Reduction Schedule Thailand’s Tariff Reduction Schedule 8703: Motor vehicles for the transport of persons (<10 persons) - Of a cylinder capacity not exceeding 3,000 cc Base Rate 200520062007200820092010 803024181260 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 Base Rate 200520062007200820092010 40, 60, 80 000000 8708: Parts and accessories Base Rate 200520062007200820092010>20201612850

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

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

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

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

14. Tariff Structure Tariff Structure 50 Silk 0, 151, 5, 10, 17.5 51 Wool 0, 5, 151, 5, 7.5 52 Cotton 0, 5, 150, 5, 12.5 53Other vegetable textile fibers, Paper yarn 0, 55, 12.5 54Man-made filaments 0, 5, 155, 12.5 55Man-made staple fibers 0, 5, 10, 155, 12.5 56 Wadding, felt and non-wovens 0, 5, 105 - 20 57 Carpets 0, 5, 1530 58Special woven fabrics 0, 5, 10, 15, 2512.5, 15 59 Textile articles for industrial use 0, 4, 5, 10, 151 - 30 60Knitted or crocheted fabrics 10, 15, 2512.5 61 Apparels (knitted or crocheted) 0, 10, 2530 62 Apparels (not knitted or crocheted) 0, 10, 2510, 30, 60 63Others made up textile articles 0, 5, 10, 15, 251, 10, 30 Tariff Rate (%) AustraliaThailand

15. Thailand’s Tariff Reduction Schedule Thailand’s Tariff Reduction Schedule On January 1, 2005, 15% of textile product On January 1, 2005, 15% of textile product categories will have their tariff rates reduced to 0%. categories will have their tariff rates reduced to 0%. 58% of the textile product categories will 58% of the textile product categories will have their tariff rates reduced to 0% by 2010, have their tariff rates reduced to 0% by 2010, and the tariff rates of the other 27% will be and the tariff rates of the other 27% will be reduced to 0% in 2015. reduced to 0% in 2015. Base Rate 200520062007200820092010 >20201612850 20052006200720082009201020112012201320142015>20201612.512.512.5555550

16. Australia’s Tariff Reduction Schedule For apparel items and some finished textiles For apparel items and some finished textiles with current tariffs of 25%, Australia will reduce with current tariffs of 25%, Australia will reduce the tariffs to 12.5% on January 1, 2005. Tariffs will the tariffs to 12.5% on January 1, 2005. Tariffs will be further reduced to 5% in 2010, and eliminated be further reduced to 5% in 2010, and eliminated in 2015. in 2015. Base Rate 20052006200720082009201020112012201320142015 2512.512.512.512.512.5555550

17. Australia’s Tariff Reduction Schedule For textiles with tariffs at 10% and 15%, For textiles with tariffs at 10% and 15%, Australia will reduce the tariffs to 5% on Australia will reduce the tariffs to 5% on January 1, 2005, and eliminate the tariffs January 1, 2005, and eliminate the tariffs in 2010. in 2010. Base Rate 200520062007200820092010 10, 15 555550

18. Rules of Origin Substantial Transformation and Substantial Transformation and Regional Value Content of not less than Regional Value Content of not less than 55 percent 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) Exports World = 141.8 Billion Baht Australia = 6.9 Billion Baht World = 126.4 Billion Baht Australia = 0.7 Billion Baht Imports Year 2003

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

21. Tariff Structure Tariff Structure 3901 Polymers of ethylene, in primary forms 510, 20 3902 Polymers of propylene or of other olefins, in primary forms 0, 55, 10, 20 3906 Acrylic polymers, in primary forms 520 3907 Polyacetals, other polyethers, in primary forms 520 3909 Amino-resins, phenolic resins and polyurethanes 55, 20 3919 Self-adhesive plates, sheets, film, foil, tape, strip and other flat shapes of plastics 510, 20, 30 3920 Other plastic plates, sheets, film, foil, non- cellular, and not combined with other materials 0, 55, 10, 30 3921 Other plates, sheets, film, foil, strip of plastics 0, 55, 10, 20,30 3923 Plastic articles for packing of goods, lids, caps, and other closures 55, 15, 30 3926 Other articles of plastics 0, 5, 10, 2510, 30 Tariff Rate (%) Australia Thailand

22. Thailand’s Tariff Reduction Schedule Thailand’s Tariff Reduction Schedule Approximately 10% of plastic products Approximately 10% of plastic products will have their tariff rates reduced to 0% will have their tariff rates reduced to 0% on January 1, 2005, and the other 90% will on January 1, 2005, and the other 90% will have their tariff rates reduced to 0% by 2010. have their tariff rates reduced to 0% by 2010. Base Rate 200520062007200820092010 10885500 2016128550 >20201612850

23. Australia’s Tariff Reduction Schedule For plastic and chemical items with current For plastic and chemical items with current tariffs of 5%, Australia will eliminate the tariffs tariffs of 5%, Australia will eliminate the tariffs in 2008. in 2008. Base Rate 200520062007200820092010 5555000 10555550

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

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

26. Iron and Steel (Chapter 72-73) HSDescriptionTrade7207 Semi-finished products of iron or non-alloy steel Net Importer 7216 Angles, shapes and sections of Iron or non-alloy steel Net Exporter 7208 Flat-rolled products of iron or non-alloy steel, hot rolled Net Importer 7204 Waste and scrap; re-melting scrap ingots of iron or steel Net Importer 7219 Flat-rolled products of stainless steel Net Exporter 7306 Other tubes, pipes and hollow profiles of iron or steel Net Exporter 7326 Other articles of iron or steel (ex. grinding balls, baskets) Net Importer

27. Tariff Structure Tariff Structure 7207 Semi-finished products of iron or non- alloy steel 01 7216 Angles, shapes and sections of Iron or non-alloy steel 010, 11 7208 Flat-rolled products of iron or non-alloy steel, hot rolled 0, 41, 7.5 7204 Waste and scrap; re-melting scrap ingots of iron or steel 0, 41 7219 Flat-rolled products of stainless steel 0, 41, 5 7306 Other tubes, pipes and hollow profiles of iron or steel 41, 12 7326 Other articles of iron or steel (ex. grinding balls, baskets) 4, 5, 1015, 20 Tariff Rate (%) AustraliaThailand

28. Thailand’s Tariff Reduction Schedule Thailand’s Tariff Reduction Schedule Base Rate 20052006200720082009201020112012201320142015 1055555555550 > 10 101010101010101010100 7216 Angles, shapes and sections of iron or non-alloy steel For semi-finished products (7207), waste and For semi-finished products (7207), waste and scrap (7204), and flat rolled products of stainless scrap (7204), and flat rolled products of stainless steel (7219), tariff rates will be reduced to 0% on steel (7219), tariff rates will be reduced to 0% on January 1, 2005 January 1, 2005 For angles, shapes and sections of iron or non- alloy steel (7216): alloy steel (7216):

29. Thailand’s Tariff Reduction Schedule Thailand’s Tariff Reduction Schedule Base Rate 20052006200720082009201020112012201320142015 111111111110 101010101010555550 1055555555550 7208 Flat-rolled products of iron or non-alloy steel, hot rolled For flat-rolled products of iron or non-alloy steel, hot rolled (7216): hot rolled (7216): For other tubes, pipes and hollow profiles of (7306): iron or steel (7306): Base Rate 200520062007200820092010201120122013201420151266666666660 7306 Other tubes, pipes and hollow profiles of iron or steel

30. Thailand’s Tariff Reduction Schedule Thailand’s Tariff Reduction Schedule (7326): For other articles of iron or steel (7326): Base Rate 200520062007200820092010 2016128550 7326 Other articles of iron or steel

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

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