§ 1. The Governments of the United Kingdom and of Australia have agreed that the United Kingdom-Australia Trade Agreement, 1932, will be replaced by a new Agreement between the two Governments. The definitive Agreement will be drawn up by representatives of the two Governments meeting in Canberra early in 1957. The new Agreement will incorporate the undertakings set out below and the two Governments will from now on act in conformity with the intention of these heads of Agreement.
§ 2. The new Agreement will operate initially for five years. Arrangements will be made for the two Governments to review the operation and future application of the Agreement as a whole some months before the end of that period.
564§ 3. The United Kingdom Government will maintain duty free entry of Australian goods which are now free of duty, except in cases where there is no active Australian trade interest.
§ 4. The United Kingdom Government will maintain the existing guaranteed margins of preference on the Australian goods mentioned in Annex A; and will guarantee the existing margins of preference on the goods mentioned in Annex B.
§ 5. As regards Australian goods not mentioned in Annexes A and B, the United Kingdom Government will consult the Australian Government about any proposals to reduce margins of preference on goods where there is an active Australian trade interest.
§ 6. The provisions of the United Kingdom-Australia Trade Agreement, 1932, in respect of imports of Australian meat into the United Kingdom will not be affected by the new Agreement.
§ 7. The understanding between the two Governments regarding the opportunity for the sale of Australian wheat in the United Kingdom market is set out in Annex C.
§ 8. The Australian Government will be free to modify the existing preferential margins accorded to United Kingdom goods, but where there is an active United Kingdom trade interest will guarantee the minimum margins of preference set out below. Except in respect of the goods in Annex D and except in respect of action following a report by the Australian Tariff Board, the Australian Government will consult the United Kingdom Government before reducing any margins of preference to these minimum levels.
- (a) In respect of the goods listed in Annex D a margin of preference of 7½ per cent.
- (b) In respect of goods not included in Annex D:—
- (i) when the rate of duty under the British Preferential Tariff does not exceed 10 per cent. ad valorem, a margin of preference of 7½ per cent.;
- (ii) when the rate of duty under the British Preferential Tariff exceeds 10 per cent. ad valorem, a margin of preference of 10 per cent.
- (c) In respect of goods on which the margin of preference is now lower than under sub-paragraphs (a) and (b) above, that lower margin of preference.
§ 9. In the administration of Australian Customs By-laws involving the elemination of a preference that would otherwise apply, the right of decision remains with the Australian Government; it is agreed that the United Kingdom Government will be given full opportunity to express their views in each case.
§ 10. The Australian Government will continue tariff policies that will ensure:—
- (a) that protection by tariffs will be afforded only to industries which are reasonably assured of sound opportunities for success on the basis of the relative cost of economical and efficient production;
- (b) that the Customs Tariff will be based on the principle that protective duties will not exceed a level that will give United Kingdom producers full opportunity of reasonable competition, provided that in the application of this principle special consideration may be given to industries not fully established and to industries essential for defence purposes;
- (c) that, subject to certain international obligations, no new protective duty will be imposed and no existing protective duty increased on United Kingdom goods to an amount in excess of the recommendations of the Tariff Board;
- (d) that United Kingdom producers will be entitled to full rights of audience before the Tariff Board.
§ 11. The Australian Government undertake that they will, on a basis of reciprocity, currently maintain all existing preferences and preferential rights in respect of territories for whose international relations the United Kingdom Government are responsible. This will apply until such time as further discussions regarding new reciprocal tariff arrangements can be held between the Australian Government and the United Kingdom Government (in consultation as necessary with the Governments of the territories concerned). It is contemplated that such discussions will be held during 1957.
§ The United Kingdom Government for their part undertake to invite the Governments of the territories for whose international relations they are responsible to maintain, pending the discussions mentioned in the preceding paragraph, the preferential tariff treatment at present accorded by the territories to imports of Australian produce. *
§ 12. The two Governments recognise that each country's trade with the other may be materially injured by competition from dumped or subsidised exports from third countries. They declare their intention to introduce legislation at the earliest possible opportunity which will enable them to impose anti-dumping or countervailing duties where such injury occurs. They also agree, if after consultation it is established that such injury is being caused or threatened, to consider remedial action consistent with their own laws and with their international obligations.
§ 13. Each Government will give full weight to the other's views in the formulation of their agricultural production, marketing and import policies. To this end, opportunity will be afforded for full consultation between the two Governments in respect of these matters.
§ 14. The two Governments recognise that there are other matters, such as transport and communications, the disposal of surpluses and restrictive business practices, which may have a material effect on the level of trade
§ * NOTE:
§ Nothing in these heads of Agreement affects the existing tariff and preferential arrangements between Australia and Ceylon which derive from the United Kingdom-Australia Trade Agreement, 1932.
566§ and commerce between the United Kingdom and Australia, and the two Governments agree to consult together about any such matters at the request of either.
§ (Signed) J. MCEWEN,
§ Australian Minister for Trade.
§ PETER THORNEYCROFT,
§ President of the Board of Trade
§ London,
§ 9th November, 1956.
§ ANNEX A