Thailand Law Journal 2009 Fall Issue 2 Volume 12

The Australian tuna tariff for Thailand is cut from 5 to 2.5 percent, and the tariff will gradually decrease to 0 percent in 2008.⁹⁹ But the tariff for fruit juice with the special safeguard for Australia market is decline to 0 percent since the tariff is in use.  

- Textile, Clothing, Footwear and Leather

From the Agreement, Australia will reduce its tariff rate at 25 percent for some specific type of clothing from 239 types. Australia will use tariff rate for clothing at 12.5 percent until 2010 that it will decrease this rate 5 percent and eliminate this rate of tariff in 2015.¹⁰⁰ For example, Australia will cut the tariff for textile and clothes from 25 percent to 12.5 percent and the tariff will be gradually decreased to 0 percent in 2016.¹⁰¹  In footwear sector, before TAFTA is implemented the highest tariff for the Australian foot wear sector is 15 percent. The tariff will be decrease to 9 percent after the Agreement is in used and it will be phased down to 0 percent in 2011.¹⁰² However, Australia will have an advantage in Thai leather and furskin tariffs. Thai will provide tariff 20 percent for Australian leather exporters when the TAFTA enter to force and the tariff will be 0 percent in 2010.¹⁰³ Moreover, the Australian furskin exporters will be provided by Thailand the decrease of the tariff from 30 percent to 20 percent on the day that TAFTA is in existence, and the tariff will steadily phase to 0 percent in 2010.¹⁰⁴     

- Automotive sector

The tariff of automotive produces is inevitably impacted from the entry of TAFTA. Both Thailand and Australia have agreed to reduce their tariff in this business. However, the reduction of tariff covered only some selected products at the date of TAFTA came in to existence and their tariffs will be gradually decreased to 0 percent as presented in the table below

Thai tariff change in automotive product

Source; FAPM (Federation of Automotive Products Manufacturers)

From the table, Thailand will remove its 80 per cent tariff on large passenger motor vehicles from the day the Agreement enters into force and rapidly cut down its high tariffs on other automotive products. Also in case of auto motive component that export from Australia to Thailand, its tariff will be cut to 20 percent and 15 percent when Agreement is enforced. Australia?s motor vehicle manufacturers are already moving to take advantage of these positive changes, for instance, the car company in Australia such as Holden Ford and Mitsubishi are intend to expand their market in Thailand.¹⁰⁵

Australian tariff change in automotive product

Source; FAPM (Federation of Automotive Products Manufacturers)

Australia will change its tariff in Passenger Motor Vehicles (PMVs) and commercial vehicles to 0 percent since TAFTA is in used. In the same track, the automotive component tariff will be cut from 15 percent to 5 percent and will be reduce to 0 percent in 2009. Thailand will be benefit from the reduction of these tariffs, for example, Thai exporter of motorcars and other motor vehicles principally designed for the transport of persons, including station wagons and racing cars, and motor vehicles for the transport of goods will receive the 0 percent of tariff when the Agreement is implemented.¹⁰⁶

Form the reduction of Thai and Australian tariffs that is presented above, it can be viewed that the TAFTA impact directly to the tariffs of cross boarder commerce between Thailand and Australia. The reduction and elimination in tariffs can be implied as the implement for facilitating the international businesses. However, the impact from TAFTA is not only on the tariff of goods but it also contributes to the change of restriction in international service and business between Thailand and Australia.

This article is published with the kind permission of Pornchai Wisuttisak, current PhD candidate, School of Business Law and Taxation, ASB, University of New South Wales, Master of Commercial Law, Macquarie University, BA, Political Science, Thammasat University, Thailand. This article originally appeared in the Thailand and Australia Free trade agreement (TAFTA): The advantage pace of foreign investment of both countries.