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Agreement on Trade and Commercial Relations between the Government of Australia and the Government of Papua New Guinea, Canberra [1991] PITSE 1 (21 February 1991)

AGREEMENT ON TRADE AND COMMERCIAL RELATIONS BETWEEN THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF PAPUA NEW GUINEA
[PATCRA II]
(Canberra, 21 February 1991)

ENTRY INTO FORCE: 20 SEPTEMBER 1991

THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF PAPUA NEW GUINEA,

RECOGNISING the importance of measures to strengthen their relationship in accordance with the Joint Declaration of Principles Guiding Relations between Papua New Guinea and Australia, including the principle that co-operation and exchange between the two countries shall be mutually beneficial and based on full participation by both countries, with due regard to the capacity, resources and development needs of both countries, and on mutual respect;

BEARING in mind the close trading and commercial relations existing between their two countries;

ACKNOWLEDGING their respective international rights and obligations;

RE-AFFIRMING their desire to maintain and strengthen trade, investment and private sector co-operation between the two countries;

HAVING resolved to establish between their two countries a Free Trade Area with a view to achieving sustained development of their economies through expansion of trade and investment in accordance with their respective objectives and priorities for economic development and social progress;

HAVE AGREED as follows:

Article 1

Definitions

In this Agreement, which may be referred to as PATCRA II, unless the contrary intention appears:

"free goods" means goods which when the subject of trade between the Member States are free of duties and other restrictive regulations of commerce pursuant to Article 3 of this Agreement;

"law" and "laws" includes "regulations";

"Member States" means Papua New Guinea and Australia or, as the context requires, the Government of Papua New Guinea and the Government of Australia;

"primary industry" means any industry producing, processing or marketing agricultural, livestock, fisheries or forestry products;

"the Area" means the Free Trade Area established under Article 3 of this Agreement.

Article 2

Objectives

The objectives of this Agreement are:

(a) to further the development of the Area through the expansion and diversification of trade in goods and services between the Member States;

(b) to further the development and use of the resources of the Area in accordance with the respective social and economic objectives of the Member States;

(d) to further the development of the Area by the promotion of direct investment which is consistent with foreign investment policies and priorities of the recipient Member States;

(e) to promote and facilitate commercial, industrial, administrative and technical co-operation between the Member States; and

(f) to contribute to the harmonious development and expansion of world trade and to the progressive removal of barriers to it.

Article 3

Free trade

1. A Free Trade Area is hereby established. The Area consists of Papua New Guinea and Australia.

2. Subject to the provisions of this Agreement, trade between the Member States shall be free of duties and other restrictive regulations of commerce.

3. This Article applies only to trade in goods which originate in a Member State.

Article 4

Rules of origin of goods

1. Goods shall be treated as originating in a Member State if those goods are:

(a) the unmanufactured raw products of that Member State; or

(b) manufactured goods in relation to which:

(i) the process last performed in the manufacture was performed in that Member State, and

(ii) the expenditure

(A) on material that is of Member State origin,

(B) on labour, factory overheads and inner containers that are of Member State origin, or

is not less than one-half of the factory or works costs at the time of exportation.

2. Notwithstanding the provisions of paragraph 1 of this Article, the Government of Australia shall also treat goods as originating in Papua New Guinea if:

(a) they comply with applicable provisions of the South Pacific Regional Trade and Economic Co-operation Agreement done at Tarawa on 14 July 1980, as amended, and

(b) the Member States agree, as signified by an exchange of letters, to treat particular goods or classes of goods as originating in a Member State, provided that, in the case of manufactured goods, the process last performed in the manufacture was performed in the territory of the exporting Member State.

Article 5

Excepted goods

1. Notwithstanding the provisions of Article 3 of this Agreement:

(a) the goods specified in Schedule A to this Agreement, when imported into Australia from Papua New Guinea, shall be subject to the rate of import duty specified from time to time in the Australian Customs Tariff as being applicable to Papua New Guinea goods;

(b) the goods specified in Schedule B to this Agreement, when imported into Australia from Papua New Guinea, shall be subject to the rate of import duty and to the other regulations, if any, specified in Schedule B as being applicable to those goods;

(c) the goods specified in Schedule C to this Agreement, when imported into Papua New Guinea from Australia, shall be subject to the rate of import duty specified from time to time in the Papua New Guinea Customs Tariff as being applicable to Australian goods; and

(d) the goods specified in Schedule D to this Agreement, when imported into Papua New Guinea from Australia, shall be subject to the rate of import duty and to the other regulations, if any, specified in Schedule D as being applicable to those goods.

(a) A Member State shall not increase the rate of import duty on goods specified in Schedules A or C to this Agreement unless:

(i) sixty days have passed since that Member State gave written notice to the other Member State of its intention to make such an increase, and

(ii) if requested in writing it has entered into consultations with the affected State. Such consultations shall begin within thirty days of the receipt of such a request;

(b) A Member State shall not increase the rate of import duty or apply more restrictive regulations of trade to the goods specified in Schedules B or D to this Agreement without the written consent of the relevant authorities of the other Member State. Such consent shall not normally be withheld provided the same notice is given and the same opportunity for consultations provided as is specified in paragraph 2(a) of this Article in relation to Schedules A or C;

(c) The relevant authorities of the Member States may, by mutual consent, vary the requirements for notification and consultation provided for in paragraph 2(a) of this Article.

3. The relevant authorities of Australia may at any time, following written notice to the relevant authorities of Papua New Guinea, remove goods from Schedules A or B to this Agreement or reduce the rates of import duty or make less restrictive the regulations of trade specified as being applicable to goods in those Schedules.

4. The relevant authorities of Papua New Guinea may at any time, following written notice to the relevant authorities of Australia, remove goods from Schedules C or D to this Agreement or reduce the rates of import duty or make less restrictive the regulations of trade specified as being applicable to goods in those Schedules.

Article 6

Revenue duties

Nothing in this Agreement shall preclude the imposition by either Member State of sales taxes or other revenue duties which are levied equally on both imports and domestic products.

Article 7

Most favoured nation treatment

1. Each Member State shall accord to the other Member State treatment no less favourable than that accorded to any third country in respect of all matters concerning:

(a) customs duties and charges of any kind imposed on, or in connection with, the importation or exportation of any goods, or imposed on the international transfer of payments for imports or exports;

(b) the method of levying such duties and charges;

(d) all internal taxes or other internal charges of any kind imposed on, or in connection with, imported goods;

(e) internal sale, offering for sale, purchase, distribution or use of imported goods within its territory;

(f) restrictions or prohibitions on the importation or exportation of any goods;

(g) the allocation of foreign exchange; and

(h) the administration of foreign exchange restrictions affecting transactions involving the importation or exportation of any goods.

2. The provision of paragraph 1 of this Article shall not apply to:

(a) advantages accorded by either Member State to adjacent countries to facilitate frontier traffic;

(b) tariff preferences or other advantages granted by either Member State consequent on the membership of that Member State in another free trade area or a customs union, or on an interim agreement leading to the formation of another free trade area or a customs union;

(c) tariff preferences accorded by either Member State to a third country in view of that country's status as a developing country; or

(d) such measures as either Member State may take pursuant to a multilateral international commodity agreement or arrangement.

Article 8

Other exceptions

Provided that such measures are not used as a means of arbitrary or unjustifiable discrimination, or as a disguised restriction on trade between the Member States, nothing in this Agreement shall prevent the adoption or enforcement by a Member State of measures:

(a) necessary for the protection of its essential security interests;

(b) necessary to protect public morals;

(d) imposed for the protection of its national treasures of artistic, historical, anthropological, palaeontological, archaeological or other cultural or scientific value;

(e) necessary to reserve for approved purposes the use of Royal Arms or national, state, provincial and territorial arms, flags, crests and seals;

(f) necessary to protect human, animal or plant life or health;

(g) necessary to protect its indigenous flora and fauna;

(h) undertaken in pursuance of its rights and obligations under a multilateral international commodity agreement or arrangement;

(i) necessary to prevent or relieve shortages of foodstuffs or other essential goods;

(j) related to the conservation of limited natural resources;

(k) necessary to protect industrial property rights or copyright, or to prevent unfair, deceptive or misleading practices;

(l) necessary to secure compliance with laws relating to customs enforcement, or to tax avoidance or evasion, or to the classification, grading or marketing of goods, or to the operation of recognised commodity marketing boards;

(m) relating to products of prison labour;

(n) relating to trade in gold or silver; or

(o) necessary to safeguard its external financial position and balance of payments.

Article 9

Suspension of obligations: protection of threatened or developing industries

1. If in the opinion of a Member State (in this Article called "the importing Member State") goods are, as a result of the operation of Article 3 of this Agreement, being imported into it from the other Member State in such quantities or under such conditions as to cause or threaten serious injury to an industry in the importing Member State producing like or directly competitive goods, or to retard materially the establishment of an industry in the importing Member State to produce like or directly competitive goods, the importing Member State may request the other Member State to consult with it on measures to reduce or prevent such injury or retardation.

2. If a mutually acceptable solution is not reached within sixty days of the date of the request referred to in paragraph 1 of this Article, the importing Member State may, after giving notice to the other Member State, suspend to such extent and for so long as necessary the application of the provisions of Article 3 of this Agreement to the goods concerned.

Article 10

Suspension of obligations: protection of Papua New Guinea primary industry

1. In order to protect an existing primary industry or to foster the development of a new primary industry, the Government of Papua New Guinea may suspend its obligations under Article 3 of this Agreement in respect of the products of a like or directly competitive industry.

2. Unless critical circumstances prevail in which delay would cause damage which would be difficult to repair, the Government of Papua New Guinea shall give sixty days notice to the Australian Government prior to taking action under paragraph 1 of this Article.

3. As soon as practicable after the need arises to take action under paragraph 1 of this Article, the Papua New Guinea Government shall enter into consultations with the Australian Government with a view to finding a mutually satisfactory solution to the problem.

Article 11

Suspension of obligations: deflection of trade

1. If the importation into a Member State (in this Article called "the importing Member State") of free goods from the other Member State:

(a) causes or threatens serious injury to an industry in the importing Member State producing like or directly competitive goods because:

(i) the duties or taxes levied by the other Member State on raw materials or intermediate products imported from outside the Area and used in the production of those goods are significantly lower than the duties or taxes levied by the importing Member State on imports of similar raw materials or intermediate products imported from outside the Area, or

(ii) the prices of raw materials or intermediate products used in the production of those goods are unduly low by reason of dumping into the Area or subsidisation, or

(iii) drawback, exemption or remission of import duties is allowed by the other Member State on raw materials or intermediate products imported from outside the Area and used in the production of goods; and

(b) the other Member State is deriving advantage from the circumstances,

the importing Member State, if it considers that action is necessary to offset that advantage, may request consultations with the other Member State on the situation which has developed. Such consultations shall be as full as circumstances permit, and the importing Member State shall consider any measures taken or proposed by the other Member State to offset the advantage.

Article 12

Suspension of obligations: exceptional circumstances

Member States may agree to the suspension of any obligation under this Agreement on the ground that there exist exceptional or emergency circumstances creating severe difficulties for one or both Member States.

Article 13

Suspension of obligations: dumped or subsidised imports

1. If in the opinion of a Member State goods being imported into it from the other Member State are being dumped or are being subsidised by the other Member State so as to cause or threaten material injury to an industry producing like or directly competitive goods or to materially retard the establishment of an industry to produce like or directly competitive goods, it may request the other Member State to consult with it on measures to reduce or prevent such injury or retardation.

2. If a mutually acceptable solution is not reached within sixty days of the date of the request referred to in paragraph 1 of this Article, the importing Member State may, after giving notice to the other Member State, suspend the application of Article 3 of this Agreement to the extent necessary to enable it to levy dumping or countervailing duties on the goods concerned.

Article 14

Investment

1. The Member States, bearing in mind that Australian investment in Papua New Guinea and the conditions attaching to that investment will have a bearing on the long term trade and commercial relationship between the Member States, shall consult, at the request of either Member State, on the most appropriate ways in which future Australian direct investment, particularly by way of joint venture, can contribute to the social and economic development of Papua New Guinea in accordance with its foreign investment policies and priorities.

2. The Papua New Guinea Government will draw to the attention of the Australian Government those specific fields of development in which it would particularly welcome Australian investment including through the provision of private venture capital. The Australian Government will endeavour to interest and encourage Australian enterprises, including those in the financial sector, to participate in those specific fields except where such investment would not be in the interests of both countries.

3. In relation to a proposed investment in Papua New Guinea which might result in the export of free goods to Australia, the Member States recognise the need for prior consultations on any matter which might affect the export to Australia of those goods. It shall be a matter for the Papua New Guinea Government to determine whether or not such consultation should take place.

4. Papua New Guinea will accord to Australian investment, in accordance with Papua New Guinea laws and related policies, treatment no less favourable than that accorded to the investment of any third country.

5. The Member States may agree to more comprehensive provisions relating to the reciprocal promotion and protection of investments by nationals and residents of one Member State in the territory of the other Member State.

Article 15

Industry co-operation

1. In order to further the objectives of this Agreement, the Member States shall, as appropriate, use their best endeavours to encourage co-operation between, and co-ordination of activities of, their respective firms and industries. To this end, the Member States shall exchange information and consult together on developments in industry within the Area, and may agree on, and implement, if consistent with their international obligations, special measures beneficial to the trade and development of a Member State.

2. The Australian Government shall assist the Government of Papua New Guinea in the promotion and development of the small business sector in Papua New Guinea. Such assistance may include the provision of initial professional and technical staff and various forms of training.

Article 16

Scientific and technical co-operation

In order to further the objectives of this Agreement, the Member States shall encourage and facilitate the interchange of applied scientific and technical knowledge between their respective countries, including the supply of information, where practicable, on new issues and from international meetings at which Papua New Guinea is not represented.

Article 17

Administrative co-operation

To promote the effective and harmonious application of the provisions of this Agreement, the Member States shall take steps to facilitate administrative co-operation and to reduce, as far as practicable, formalities affecting trade within the Area.

Article 18

Promotion of trade

1. For the purpose of promoting trade (including investment and investment in tourism) between the Member States, each Member State shall, within its competence and subject to its laws, encourage and facilitate:

(a) the interchange of commercial and technical representatives, groups and delegations; and

(b) the holding of, and participation in, trade fairs, trade exhibitions and other promotional activities in the fields of trade and technology in its territory by enterprises and organisations from the other Member State.

2. In particular, each Member State shall exempt from import duties and other taxes, and from any other prohibitions and restrictions (other than those provided for under Article 8 of this Agreement) articles for display or for use in connection with fairs, exhibitions or similar events, as well as samples of goods for advertising purposes imported on a temporary basis from the other Member State. Articles and samples so exempted shall not be disposed of otherwise than by re-exportation, except with the prior approval of the competent authorities of the importing Member State and on payment of any applicable import duties and taxes.

3. The importance of the role of the Member States' respective trade representatives in the promotion of trade and investment is recognised. The services of Australia's overseas trade representatives may be made available for the promotion of Papua New Guinea's exports. Those representatives shall not charge the Papua New Guinea Government for these services at a rate higher than the rate at which they charge the Australian Government for similar services.

4. In recognition of the role of business visitors in the promotion of trade investment, each Member State shall accord business visitors who are nationals of the other Member State, fair and equitable treatment with respect to their entry into, stay and travel within and departure from its territory, provided that such treatment shall be in accordance with the Member State's laws and shall not be discriminatory between nationals of the other Member State and nationals of any third country.

Article 19

Commodity production and trade

1. The Member States, recognising the importance of commodity production and trade to their economies and particularly to the development prospects of Papua New Guinea, shall consult together on commodity trade. As appropriate and consistent with its international obligations, the Australian Government shall assist the Government of Papua New Guinea in primary industry development, export expansion and diversification.

2. To advance the objectives of this Agreement, the Member States shall:

(a) encourage and, where practicable, facilitate the negotiation of commercial contracts between appropriate organisations or enterprises, of their two countries; and

(b) declare their support in principle for the conclusion of long-term commercial contracts relating to the supply and purchase of goods, and encourage the relevant organisations or enterprises of their two countries to explore the scope for such commercial contracts and, where appropriate, to conclude such contracts.

3. The organisations or enterprises referred to in this article may be either Government or private bodies.

Article 20

Scarce commodities

If a Member State has difficulty in obtaining supplies of essential commodities from the other Member State or from third countries, the other Member State shall, on request, enter into consultations on the matter.

Article 21

Payments

All commercial payments between the Member States shall be made through the banks of the two countries authorised to buy and sell foreign currency, and in any mutually acceptable freely convertible currency, in accordance with the foreign exchange regulations in force in the two countries and with general customary practice.

Article 22

Consultation and review

1. There shall be periodic consultations between the Member States for the purpose of reviewing the operation of this Agreement. Such consultations shall be held annually or at the request of either Member State. In such consultations a Member State may raise any matters related to the implementation of this Agreement or bearing on trade (including investment and investment in tourism) or commercial relations between the Member States.

2. Should either Member State consider that an obligation under this Agreement has not been fulfilled, or that any benefit conferred upon it by this Agreement is being or might be frustrated, or that any case of special difficulty has arisen, or that a change in circumstances necessitates or might necessitate a variation in the terms of this Agreement, the other Member State shall, on request, enter into consultations as soon as practicable with a view to reaching a mutually satisfactory solution.

3. This Agreement may be amended by the Member States at any time in accordance with their respective constitutional requirements. The Schedules to this Agreement may be varied at any time by mutual consent of the relevant authorities of each Member State except as otherwise provided in Article 5.

Article 23

Association with the Agreement

1. The Member States may agree to the association of any other State with this Agreement.

2. The terms of such association shall be negotiated between the Member States and the other State.

Article 24

Entry into force and duration

1. This Agreement shall come into force on the date on which the Member States exchange notes notifying each other that their respective constitutional and other requirements necessary to give effect to the Agreement have been complied with.

2. A Member State may terminate this Agreement by giving notice to that effect to the other Member State. If that other Member State so requests, consultations shall take place between the Member States as soon as practicable. The notice of termination shall take effect on the one hundred and eightieth day after the day on which it was given unless earlier withdrawn.

IN WITNESS WHEREOF the undersigned, duly authorised by their respective Governments, have signed this Agreement.

DONE in two originals at Canberra this twenty-first day of February, One thousand nine hundred and ninety-one.

FOR THE GOVERNMENT OF

AUSTRALIA:

Signed:]

GARETH EVANS

FOR THE GOVERNMENT OF PAPUA NEW GUINEA

Signed:]

M T SOMARE

SCHEDULE A

AUSTRALIAN CUSTOMS TARIFF ITEM

Sugars

1701.11.00

1701.12.00

1701.91.00

1701.99.90

1702.90.10

1703.10.10

1703.90.10

Beverages, spirits and vinegar *

2203.00.10

2206.00.11

2206.00.12

2207.10.00

2207.20.00

2208.20.11

2208.20.19

2208.20.91

2208.20.99

2208.30.10

2208.30.90

2208.40.10

2208.40.90

2208.50.10

2208.50.90

2208.90.10

2208.90.90

Tobacco and manufactured tobacco substitutes *

2402.10.00

2402.20.00

2403.10.10

2403.10.90

2403.99.20

2403.99.90

Mineral fuels; mineral oils and products of their distillation *

2707.50.10

2710.00.19

2710.00.20

2710.00.30

2710.00.51

2710.00.52

Plastics and articles (other including primary forms)

3926.20.29

Rubber and articles (apparel and clothing accessories)

4015.90.29

Leather garments

4203.10.10

4205.00.10

Silk

5007.10.10

5007.90.10

Cotton

5208.11.10

5208.12.10

5208.13.10

5208.19.10

5208.21.10

5208.22.10

5208.23.10

5208.29.10

5208.31.10

5208.32.10

5208.33.10

5208.39.10

5208.41.10

5208.42.10

5208.43.10

5208.49.10

5208.51.10

5208.52.10

5208.53.10

5208.59.10

5210.11.10

5210.11.20

5210.12.10

5210.12.20

5210.19.10

5210.19.20

5210.21.10

5210.21.20

5210.22.10

5210.22.20

5210.29.10

5210.29.20

5210.31.10

5210.31.20

5210.32.10

5210.32.20

5210.39.10

5210.39.20

5210.41.10

5210.41.20

5210.42.10

5210.42.20

5210.49.10

5210.49.20

5210.51.10

5210.51.20

5210.52.10

5210.52.20

5210.59.10

5210.59.20

5211.11.10

5211.12.10

5211.19.10

5211.21.10

5211.22.10

5211.29.10

5211.31.10

5211.32.10

5211.39.10

5211.41.10

5211.42.10

5211.43.10

5211.49.10

5211.51.10

5211.52.10

5211.59.10

5212.11.10

5212.11.20

5212.12.10

5212.12.20

5212.13.10

5212.13.20

5212.14.10

5212.14.20

5212.15.10

5212.15.20

5212.21.10

5212.22.10

5212.23.10

5212.24.10

5212.25.10

Man made filaments

5407.10.00

5407.20.90

5407.30.90

5407.41.00

5407.42.00

5407.43.00

5407.44.00

5407.51.00

5407.52.00

5407.53.00

5407.54.00

5407.60.00

5407.71.90

5407.72.90

5407.73.90

5407.74.00

5407.81.00

5407.82.00

5407.83.00

5407.84.00

5407.91.90

5407.92.90

5407.93.90

5407.94.90

5408.10.00

5408.21.00

5408.22.00

5408.23.00

5408.24.00

5408.31.90

5408.32.90

5408.33.90

5408.34.90

Man made staple fibres (woven fabrics)

5512.11.00

5512.19.00

5512.21.00

5512.29.00

5512.91.90

5512.99.90

5513.11.00

5513.12.00

5513.13.00

5513.19.90

5513.21.00

5513.22.00

5513.23.00

5513.29.00

5513.31.00

5513.32.00

5513.33.00

5513.39.00

5513.41.00

5513.42.00

5513.43.00

5513.49.00

5514.11.00

5514.12.00

5514.13.00

5514.19.00

5514.21.00

5514.22.00

5514.23.00

5514.29.00

5514.31.00

5514.32.00

5514.33.00

5514.39.00

5514.41.00

5514.42.00

5514.43.00

5514.49.00

5515.11.00

5515.12.00

5515.13.90

5515.19.00

5515.21.00

5515.22.90

5515.29.00

5515.91.90

5515.92.90

5515.99.00

5516.11.00

5516.12.00

5516.13.00

5516.14.00

5516.21.00

5516.22.00

5516.23.00

5516.24.00

5516.31.90

5516.32.90

5516.33.90

5516.34.90

5516.41.00

5516.42.00

5516.43.00

5516.44.00

5516.91.00

5516.92.00

5516.93.00

5516.94.00

Special woven fabrics

5801.21.10

5801.31.00

5802.11.00

5802.19.00

5803.90.10

5811.00.90

Impregnated, coated, covered or laminated textile fabrics; textile wall coverings

5903.10.10

5903.20.10

5903.90.10

5905.00.30

Articles of apparel and clothing accessories knitted or crocheted

6101.10.00

6101.20.00

6101.30.90

6101.90.00

6102.10.00

6102.20.00

6102.30.90

6102.90.00

6103.11.00

6103.12.00

6103.19.00

6103.21.00

6103.22.00

6103.23.00

6103.29.00

6103.31.00

6103.32.00

6103.33.00

6103.39.00

6103.41.00

6103.42.00

6103.43.90

6103.49.90

6104.11.00

6104.12.00

6104.13.00

6104.19.00

6104.21.00

6104.22.00

6104.23.00

6104.29.00

6104.31.00

6104.32.00

6104.33.00

6104.39.00

6104.41.00

6104.42.00

6104.43.00

6104.44.00

6104.49.00

6104.51.00

6104.52.00

6104.53.00

6104.59.00

6104.61.00

6104.62.00

6104.63.90

6104.69.00

6105.10.00

6105.20.00

6105.90.00

6106.10.00

6106.20.00

6106.90.00

6107.11.00

6107.12.00

6107.19.00

6107.21.00

6107.22.00

6107.29.00

6107.91.00

6107.92.00

6107.99.00

6108.11.00

6108.19.00

6108.21.00

6108.22.00

6108.29.00

6108.31.00

6108.32.00

6108.39.00

6108.91.00

6108.92.00

6108.99.00

6109.10.00

6109.90.00

6110.10.00

6110.20.00

6110.30.00

6110.90.00

6111.10.90

6111.20.90

6111.30.90

6111.90.90

6112.11.00

6112.12.00

6112.19.00

6112.31.00

6112.39.00

6112.41.00

6112.49.00

6113.00.90

6114.10.90

6114.20.90

6114.30.90

6114.90.90

6115.11.91

6115.11.99

6115.12.90

6115.19.90

6115.91.10

6115.92.10

6115.93.10

6115.99.10

6117.90.90

Articles of apparel and clothing accessories, not knitted or crocheted

6201.11.00

6201.12.00

6201.13.00

6201.19.00

6201.91.90

6201.92.90

6201.93.90

6201.99.90

6202.11.00

6202.12.00

6202.13.00

6202.19.00

6202.91.90

6202.92.90

6202.93.90

6202.99.90

6203.11.00

6203.12.00

6203.19.00

6203.21.00

6203.22.00

6203.23.00

6203.29.00

6203.31.00

6203.32.00

6203.33.00

6203.39.00

6203.41.90

6203.42.90

6203.43.90

6203.49.90

6204.11.00

6204.12.00

6204.13.00

6204.19.00

6204.21.00

6204.22.00

4204.23.00

6204.29.00

6204.31.00

6204.32.00

6204.33.00

6204.39.00

6204.41.00

6204.42.00

6204.43.00

6204.44.00

6204.49.00

6204.51.00

6204.52.00

6204.53.00

6204.59.00

6204.61.90

6204.62.90

6204.63.90

6204.69.90

6205.10.00

6205.20.00

6205.30.00

6205.90.00

6206.10.00

6206.20.00

6206.30.00

6206.40.00

6206.90.00

6207.11.00

6207.19.00

6207.21.00

6207.22.00

6207.29.00

6207.91.00

6207.92.00

6207.99.00

6208.11.00

6208.19.00

6208.21.00

6208.22.00

6208.29.00

6208.91.00

6208.92.00

6208.99.00

6209.10.90

6209.20.90

6209.30.90

6209.90.90

6210.10.90

6210.20.00

6210.30.00

6210.40.90

6210.50.90

6211.11.00

6211.12.00

6211.31.90

6211.32.90

6211.33.90

6211.39.90

6211.41.00

6211.42.00

6211.43.00

6211.49.00

6212.10.00

6212.20.00

6212.30.00

6212.90.10

6217.90.90

Other made up textile articles

6302.21.00

6302.22.00

6302.29.00

6302.31.00

6302.32.00

6302.39.00

6302.60.10

6302.91.20

6303.11.10

6303.12.10

6303.19.10

6303.91.10

6303.92.10

6303.99.10

6305.31.91

6305.39.91

Footwear, gaiters and the like, parts of such articles

6401.10.00

6401.92.90

6401.99.90

6402.19.00

6402.20.90

6402.30.00

6402.91.90

6402.99.90

6403.19.00

6403.30.00

6403.40.00

6403.51.00

6403.59.00

6403.91.00

6403.99.00

6404.11.00

6404.19.90

6404.20.90

6405.10.90

6405.20.90

6405.90.90

6406.10.00

6406.20.00

6406.91.00

6406.99.90

The rates and regulations applicable are those as at the date of signature.

SCHEDULE C

For the purposes of Article 5, Schedule C shall consist of those goods specified in the Papua New Guinea Customs Tariff, as amended from time to time, which are subject to a rate of import duty other than free and for which no other regulations are specified, with the exception of the goods listed below in this Schedule.

Exceptions:

SCHEDULE D

Goods specified in this Schedule shall be subject to the rate of import duty and to other regulations specified for those goods in the Papua New Guinea Customs Tariff.

PNG CUSTOMS TARIFF ITEM EQUIVALENT AUSTRALIAN

CUSTOMS TARIFF ITEM

(where different)

Sugar

1701.11.00

1701.12.00

1701.91.00

1701.92.00 1701.99.90

1702.99.00 1701.99.90

Poultry

0207.10.00

0207.21.00

0207.22.00

0207.23.00

0207.31.00

0207.39.00

0207.41.00

0207.42.00

0207.43.00

0207.50.00

Eggs

0407.00.00

0511.20.00

Canned meat

1602.60.00 1602.50.00

1602.90.00

Plywood

4408.10.00

4408.20.00

4408.90.00

4410.10.00

4410.90.00

4411.11.00

4411.19.00

4411.21.00

4411.29.00

4411.31.00

4411.39.00

4411.91.00

4411.99.00

4412.11.00

4412.12.00

4412.13.00 4412.12.00 or 4412.19.00

4412.19.00

4412.21.00

4412.29.00 4412.29.10 or 4412.29.90

4412.91.00

4412.99.00 4412.99.10 or 4412.99.90

Pork and pork based small goods

0203.11.00

0203.12.00

0203.19.00

0203.21.00

0203.22.00

0203.29.00

0206.30.00

0206.41.00

0206.49.00

0206.80.00

0206.90.00

0210.11.00

0210.11.10 0210.19.00

0210.12.00

0210.19.00

Fresh vegetables

0701.10.00

0701.90.00

0702.00.00

0703.10.00 (except onions)

0703.20.00

0703.90.00

0704.10.00

0704.20.00

0704.90.00

0705.11.00

0705.19.00

0705.21.00

0705.29.00

0706.10.00

0706.90.00

0707.00.00

0708.10.00

0708.20.00

0708.90.00

0709.10.00

0709.20.00

0709.30.00

0709.40.00

0709.51.00

0709.52.00

0709.60.00

0709.70.00

0709.80.00

0709.90.00 0709.90.00

0714.10.00

0714.20.00

0714.30.00 0714.90.00

0714.90.00

Fruits

0803.00.00

0804.20.00

0804.30.00

0804.40.00

0804.50.00

0805.10.00

0805.20.00

0805.30.00

0805.40.00

0805.90.00

0806.10.00

0807.10.00

0807.20.00

0808.10.00

0808.20.00

0809.10.00

0809.20.00

0809.30.00

0809.40.00

0810.10.00

0810.30.00

0810.40.00

0810.90.00

Wooden door

4418.20.00

Matches

3605.00.00

The rates and regulations applicable are those as at the date of signature.

AGREED MINUTES

1. The revision of PATCRA has been undertaken in the context of the Joint Declaration of Principles guiding relations between Papua New Guinea and Australia, reflecting their sovereign equality; the interdependence of all elements of the bilateral relationship and its further development on the basis of mutual benefit; and taking appropriate account of levels of economic and social development, the following understandings regarding the interpretation and operation of PATCRA II were reached.

2. Nothing in Article 3 precludes import and export duties currently imposed by the Papua New Guinea Government solely for revenue purposes. Increases in the rates of import duties specified in Schedules C and D resulting from revenue changes announced in the Papua New Guinea budget are exempt from the provisions of Article 5(2). The Papua New Guinea Government shall, however, give written notice to the Australian Government of any increase in the rates of import duty announced in the Papua New Guinea budget within thirty days from the date upon which the increased rates are announced. The Australian Government may request consultations on such increases under Article 22.

3. In respect of Article 4 Australia noted Papua New Guinea's objectives of encouraging investment in specific industry sectors having a significant export orientation. Australia agreed to respond promptly to any Papua New Guinea Government requests, based on this criterion, for derogations from the generally applicable rules of origin criteria.

4. With regard to the provisions of Article 14, the Australian Government noted the concern of the Government of Papua New Guinea to explore measures to promote the trade and industrial capacity of Papua New Guinea in order to enable it to export to Australia encouraged by the free trade provisions of the Agreement. The Australian Government will endeavour to interest and encourage Australian enterprises, including in the financial sector, to participate in specific fields of development identified by Papua New Guinea. The objectives of this article could also be supported by the expansion of the AIDAB Joint Venture Scheme to include Papua New Guinea. The Australians also agreed to conduct, as soon as possible after receiving a formal request from the Papua New Guinea Government, a study on ways to promote joint ventures between Australia and Papua New Guinea.

5. With respect to Article 15 the Australian Government noted the concerns of the Papua New Guinea Government over the terms and coverage of investment insurance, but both sides agreed that the provision of specific incentives was not possible. The incorporation of the Australian Export Finance and Insurance Corporation into the Australian Trade Commission was also noted.

6. In support of the objectives of Article 15 in relation to small business development it was agreed that the Australian Government assistance would be largely funded by AIDAB and might include activities such as

- fellowship and secondments for Papua New Guinean technical and managerial counterpart staff

- preparation of appropriate information packages for small business developments

- preparation of training modules in basic accounting and other business skills

- provision of advice and training to small-scale entrepreneurs and to those training entrepreneurs.

7. In support of the objectives of Article 18 the Australian Government agreed that a programme of specific activities will be developed each year by the Market Advisory Service of the Australian Department of Foreign Affairs and Trade in conjunction with the Papua New Guinea Department of Trade and Industry; these programmes may include the following measures:

- training activities related to the development and promotion of domestic and international trade

- activities aimed at improving the quality of Papua New Guinean products including quality control, market research, product adaptation, packaging and presentation

- direct assistance to the staging of survey and selling missions, trade displays and fairs in Australia

- development of effective marketing and trade promotional knowledge and skills based on research, market studies and advertising

- promotion of the opportunities in Papua New Guinea for investment, including investment in tourism, joint ventures and technology transfer.

8. In respect of Article 19 the Australian Government indicated its willingness to assist, wherever possible, the efforts of the Government of Papua New Guinea to encouraging the diversification of its agricultural export sector, including the improvement of Papua New Guinea's competitiveness. They also agreed to consult together on commodity programs, including:

(a) a long term program of Developing Countries Technical Assistance Program (DCTAP) assistance in promotion, marketing and training; and

(b) inclusion in the project aid program of projects designed to facilitate the further processing of Papua New Guinea agricultural and other commodities.

In addition other mechanisms could include:

- training of Papua New Guinean commodity board managers on an interchange basis

- possible use of the AIDAB Joint Venture Scheme. Discussions will be held to clarify how the scheme could be applied in the specific case of Papua New Guinea

- possible use of the AIDAB Development Import Finance Facility grants in conjunction with export finance (mixed credits) through the Australian Trade Commission for capital goods and related services

- the use of the services of the South Pacific Trade Commissioner based in Sydney; and

- technical assistance in respect of small business.

9. Both sides agree that the Schedules of Excepted Goods which are subject to the provisions of Article 5, should be reviewed and updated at the earliest opportunity.

FOR THE GOVERNMENT OF AUSTRALIA:

Signed:]

GARETH EVANS

Canberra – 21 February 1991

FOR THE GOVERNMENT OF PAPUA NEW GUINEA

Signed:]

M T SOMARE

Canberra – 21 February 1991

Letter from the Australian Minister for Foreign Affairs and Trade to the Minister for Foreign Affairs of Papua New Guinea]

Minister for Foreign Affairs
Parliament House
CANBERRA ACT 2600

21 February 1991

The Rt Hon Sir Michael Somare GCMG, CH, MP
Minister for Foreign Affairs
PAPUA NEW GUINEA
Central Government Offices
WAIGANI

Dear Sir Michael

I refer to discussions between our two Governments on the operation of the rules of origin in Article 4 of the Agreement on Trade and Commercial Relations between the Government of Australia and the Government of Papua New Guinea (PATCRA II) signed today and in particular to the concerns of your Government that the development of Papua New Guinea's industrial sector should be encouraged.

I wish to inform you that the Government of Australia envisages the rules of origin working in basically the same way as earlier rules. This is so because the underlying concept of the rules, namely the value of country content as a proportion of factory cost, is the same.

The elements that go to make up the value of country content must, of course, be the same as those which go to make up factory cost. In Australia these elements have been subject to Ministerial determinations in respect of factory or works costs (attached Appendix A) and value of labour and materials (attached Appendix B).

In the majority of cases, a declaration by the exporter as to the proportion of country content is sufficient evidence for goods to gain preferential treatment. But such documentary evidence has always been subject to check where considered necessary by the Australian Customs Service. As trade develops between Papua New Guinea and Australia such checks would no doubt strengthen each Member State's administration of the origin rules.

The provision in paragraph 2 of Article 4 of the Agreement to treat particular goods or classes of goods as originating in Papua New Guinea shall apply, even though the expenditures specified in paragraph (1)(b)(ii) of Article 4 amount to less than 50% of the factory and works costs at the time of exportation. Thus, it will allow a simple basic rule, the one-half rule, to operate without disadvantaging goods which do not meet the conditions of the rule but in respect of which it might be desirable to accord preferential treatment.

I therefore suggest that a manufacturer in Papua New Guinea, who wishes to have his goods treated as originating in Papua New Guinea pursuant to paragraph 2 of Article 4, should put his case to the appropriate authority in your country. If no reason existed to do otherwise, a request should be cleared and advice of the clearance sent to the appropriate authority in Australia with a request for a clearance from Australia.

The Australian authorities will respond to such requests promptly. That exchange of clearances would constitute an agreement for the purposes of paragraph (2)(b) of Article 4 of the Agreement. In Australia, such agreements would be formalised in accordance with Australian law and procedures.

I also wish to inform you that Australia will apply the rules of origin provisions of Article 4 of the Agreement to all importations from Papua New Guinea other than those goods imported pursuant to the Australian system of Tariff Preferences for Developing Countries.

If the foregoing is acceptable to your Government, I propose that this letter, together with your confirmatory reply, should constitute the understandings of our two Governments in the matter.

Yours sincerely

Signed:]

GARETH EVANS

APPENDIX A

Extract from the Commonwealth of Australia Gazette No. GN 33 of 7 September 1988.

COMMONWEALTH OF AUSTRALIA

Customs Act 1901

NOTICE UNDER SECTION 151

Notice No. 88/10

I COLIN FELICE VASSOROTTI, delegate of the Comptroller-General of Customs, pursuant to paragraph (a) of the sub-section (13) of section 151 of the Customs Act 1901, do hereby specify that the manner in which the factory or works cost of goods is to be determined for the purposes of that paragraph is the manner specified in the Schedule hereunder.

This notice revokes Notice No. 78/3 dated the 12th day of July 1978 and published in the Commonwealth of Australia Gazette No. G29 of 25th July 1978.

This notice shall take effect from the 18th day of August 1988.

THE SCHEDULE

The factory or works cost of goods shall be the sum of the following:

(a) the cost of materials received into factory but not including any duties or other taxes paid or payable in the country of manufacture of the goods in respect of such materials;

(b) manufacturing wages;

(d) the cost of inside containers.

Dated this 18th day of August 1988.

C F VASSAROTTI
Delegate of the Comptroller-General

N.N.-8862552

APPENDIX B

Extract from the Commonwealth of Australia Gazette No. GN33 of 7 September 1988.

COMMONWEALTH OF AUSTRALIA

Customs Act 1901

NOTICE UNDER SECTION 151

Notice No. 88/12

I COLIN FELICE VASSOROTTI, delegate of the Comptroller-General of Customs, pursuant to paragraph (b) of sub-section (13) of section 151 of the Customs Act 1901, do hereby specify that the manner in which the value of labour and materials is to be determined for the purposes of that paragraph in regard to countries other than New Zealand is the manner specified in the Schedule hereunder.

This notice revokes Notice No. 4 dated the twenty-eighth day of June 1965 and published in the Commonwealth of Australia Gazette No. 55 of 1 July 1965.

This notice shall take effect from the 18th day of August 1988.

THE SCHEDULE

The value of labour and materials shall be the sum of the following:

(a) (i) in the case of materials wholly produced or manufactured in the country or in Australia or in the country and in Australia, but not including any duties or other taxes paid or payable in the country of manufacture of the goods in respect of such materials - the cost of those materials; or

(ii) in the case of materials partly manufactured in the country or in the country and Australia - the proportion of the cost of manufacture of those materials incurred in the country or in the country and in Australia, but not including any duties or other taxes paid or payable in the country of manufacture of the goods in respect of such materials;

(b) manufacturing wages;

(d) the cost of inside containers of the manufacture of the country or of Australia, or of the country and Australia.

Dated this 18th day of August 1988.

C F VASSAROTTI
Delegate of the Comptroller-General
N.N. - 8862555

Letter from the Minister for Foreign Affairs of Papua New Guinea to the Australian Minister for Foreign Affairs and Trade]

Minister for Foreign Affairs
Central Government Offices
Waigani, PNG

21 February 1991

Senator the Hon Gareth Evans QC
Minister for Foreign Affairs and Trade
Parliament House
CANBERRA

My dear Minister

I acknowledge receipt of your letter of today's date on the subject of the operation of new rules of origin in Article 4 of the Agreement on Trade and Commercial Relations between the Government of Papua New Guinea and the Government of Australia (PATCRA II) signed today.

The text of that letter reads as follows:

Here follows text, and Appendices, as printed under I.]

I wish to confirm that the Government of Papua New Guinea shares the understanding set out in your letter and that your letter, together with this reply, will constitute the understandings of our two Governments in the matter.

Yours sincerely

Signed:]

(SIR MICHAEL T SOMARE) GCMG, CH, MP

MINISTER FOR FOREGIN AFFAIRS

Letter from the Australian Minister for Foreign Affairs and Trade to the Minister for Foreign Affairs of Papua New Guinea]

III

Minister for Foreign Affairs and Trade
Parliament House
CANBERRA ACT 2600

21 February 1991

The Rt Hon Sir Michael Somare GCMG, CH, MP
Minister for Foreign Affairs
PAPUA NEW GUINEA
Central Government Offices
WAIGANI

Dear Sir Michael

In relation to paragraph 2 of Article 14 of the Agreement on Trade and Commercial Relations between the Government of Australia and the Government of Papua New Guinea (PATCRA II) signed today, I wish to place on record the following forms of investment encouragement which the Government of Australia may provide in appropriate circumstances to Australian enterprises wishing to invest directly in Papua New Guinea. The following list describes measures which are currently part of the policy of the Government of Australia on the encouragement of direct investment by Australian enterprises in developing countries and may be subject to variation from time to time.

The Government of Australia will inter alia:

(1) facilitate discussions with the Australian Trade Commission's Export Finance and Insurance Corporation, in relation to the provision of finance and insurance projects and for the export of Elaborately Transformed Manufactures (ETMs);

(2) disseminate information to potential Australian investors concerning investment opportunities in Papua New Guinea;

(3) assist investors through facilities of the Australian Trade Commission.

If the foregoing is acceptable to your Government, I propose that this letter together with your confirmatory reply should constitute the understandings of our two Governments in this matter.

Yours sincerely

Signed:]
GARETH EVANS

Letter from the Minister for Foreign Affairs of Papua New Guinea to the Australian Minister for Foreign Affairs and Trade]

Minister for Foreign Affairs
Central Government Offices
Waigani, PNG

21 February 1991

Senator the Hon Gareth Evans QC
Minister for Foreign Affairs and Trade
Parliament House
CANBERRA

My dear Minister

I acknowledge receipt of your letter of today's date regarding the interpretation of paragraph 2 of Article 14 of the Agreement on Trade and Commercial Relations between the Government of Papua New Guinea and the Government of Australia (PATCRA II) signed today.

The text of that letter reads as follows:

Here follows text as printed under III.]

Yours sincerely

Signed:]

(SIR MICHAEL T SOMARE) GCMG, CH, MP

MINISTER FOR FOREIGN AFFAIRS

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