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Exchange of Letters (October 24 and 25, 1973) between the Government of Canada and the Government of Australia constituting an Agreement modifying the Trade Agreement of February 12, 1960 [1973] CATSer 13 (25 October 1973)

E102917 - CTS 1973 No. 34

EXCHANGE OF LETTERS BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF AUSTRALIA CONSTITUTING AN AGREEMENT MODIFY­ING THE TRADE AGREEMENT OF FEBRUARY 12, 1960

I

The Acting Minister of Industry, Trade and Commerce of Canada to the Minister for Overseas Trade of Australia

Ottawa, October 24, 1973

The Honourable J. F. Cairns,
Minister for Overseas Trade,
Department of Overseas Trade,
Canberra

My Dear Minister,

I refer to discussions between representatives of our two Governments held in Canberra in April, 1973, in respect of the future operation of the Trade Agreement between the Government of Canada and the Government of Australia signed in Canberra on February 12, l960.⁽¹⁾

Our two Governments recognize the great value that the preferential trading arrangements have for our two countries and share the intention of retaining preferential arrangements to the maximum extent feasible and desirable.

It is proposed to pursue this objective by adapting the operation of the 1960 Trade Agreement to changing circumstances and to the termination of our respective Trade Agreements with the United Kingdom.

To this end, the following documents were prepared during the discus­sions referred to above and are annexed to this letter:

(a) Annex I relating to future preferential arrangements and the opera­tion of Articles I, II and VII of the 1960 Trade Agreement.

(b) Annex II relating to direct shipment and the operation of Article IV of the 1960 Trade Agreement.

(c) Annex III relating to anti-dumping and the operation of Article VI of the 1960 Trade Agreement.

(d) Annex IV relating to butter under Schedule A to the 1960 Trade Agreement.

I have the honour to suggest that the provisions of the Annexes to this letter should in future govern the operation of the relevant provisions of the Trade Agreement of February 12, 1960, as between our two countries.

If the foregoing is acceptable to your Government, I propose that this letter and the attached Annexes, which are authentic in English and French, together with your confirmatory reply thereto shall constitute and evidence an agreement between our two Governments to enter into force on the date of your reply.

I further propose that unless it is otherwise provided for in the Annexes the present agreement shall remain in force for an initial period of one year and shall remain in force thereafter subject to the right of either Government to terminate it upon thirty days written notice to the other. In no case shall the present agreement remain in force after the termination of the Trade Agree­ment between Canada and Australia of February 12, 1960.

Yours sincerely,

Robert Andras

ANNEX I

RELATING TO FUTURE PREFERENTIAL ARRANGEMENTS AND THE OPERATION OF ARTICLES I, II AND VII OF THE 1960 TRADE AGREEMENT

The two Governments agree as follows:

1. With respect to margins of preference on goods specified in Schedule A or Schedule B Part I to the Canada/Australia Trade Agreement of 12 February, 1960,

(a) Notwithstanding the provisions of Articles I and II of the 1960 Trade Agreement either Government may reduce or eliminate the bound margin of preference prevailing as at 1st February, 1973, on any goods listed in Schedule A or Schedule B Part I.

(b) Before either Government takes action under paragraph (a) above it shall give 30 days notice to the other that reduction or elimination of a bound margin may occur. It is understood that in critical circum­stances the 30 day period of notification may not be possible.

(c) At any time during the 30 day period referred to above the Govern­ment initiating the action shall accept representations from the other Government with respect to such proposed action.

(d) In the event that elimination or reduction of a bound margin occurs, the two Governments shall, on the request of either, consult regarding restoration of the margin or the substitution of substantially equiva­lent concessions in place of the concession affected.

(e) In the event that agreement is not reached within a period of 60 days after the action is taken by the initiating Government the other Government may withdraw substantially equivalent concessions.

2. With respect to margins on goods being margins not specified in Schedule A or Schedule B Part I to the 1960 Trade Agreement,

(a) Each Government will give 30 days notice to the other Government of its intention to reduce or eliminate the margin of preference applying to goods of significant interest to the other country. It is understood that in critical circumstances the 30 day period of notification may not be possible.

(b) For the purposes of paragraph (a) above:

(i) "margin" shall mean in the case of Australia that margin of preference provided for in Article 7 of the United Kingdom/Aus­tralia Trade Agreement 1957 immediately prior to its termination or such lower margin as provided for in the First Schedule and Part I of the Fifth Schedule of the Australian Customs Tariff as at 1st February, 1973, and in the case of Canada the margin of preference as at 1st February 1973; and

(ii) "goods of significant interest" shall mean:

- firstly, those goods included in a tariff specification the imports of which from the other country in any one of the preceding three years were worth at least $A200,000 (or the Canadian equivalent), or were worth at least $A20,000 (or the Canadian equivalent) and were at least one-tenth by value of all imports of such goods from all countries, or

- secondly, those goods which have been notified at any time by one Government as being goods of demonstrable special inter­est to it.

3. The provisions of Sections 1 and 2 above shall not apply to reduction or elimination of margins of preference by Canadian Orders in Council under the Customs Act, the Financial Administration Act or Section 12 of the Customs Tariff or by Australian Customs Tariff by-law procedures.

4. (a) Notwithstanding the provisions of Article 1 of the 1960 Trade Agree­ment, the Canadian Government may admit goods under Orders in Council under the Customs Act or the Financial Administration Act.

(b) If such admission has the effect of reducing or eliminating a mini­mum margin of preference accorded to Australia on goods specified in Schedule A to the 1960 Trade Agreement, the Canadian Govern­ment will afford the Australian Government opportunity to consult and will take into account any representations which that Govern­ment may make. This undertaking shall not limit the right of the Canadian Government to determine whether any particular goods shall be so admitted.

5. The Australian Government will apply the provisions of paragraph 2 of Article VII of the 1960 Trade Agreement to reduction of margins of prefer­ence in the same sense as to elimination of margins of preference.

6. In respect of goods where a margin of preference is not prescribed in Schedule B Part I to the 1960 Trade Agreement but being goods of significant interest as defined in Section 2(b)(ii) and on which a margin as defined in Section 2(b)(i) applies to Canada:

(a) the Australian Government will notify the Canadian Government of goods to be published in the Consolidated By-Law References.

(b) in respect of those goods notified by the Canadian Government as being goods where by-law treatment is of particular interest, the Australian Government will give notice, 30 days in advance where practicable, to the Canadian Government of goods to be published in the Consolidated By-Law References.

7. In respect of goods where a margin of preference is not prescribed in Schedule A to the 1960 Trade Agreement but being goods of significant interest as defined in Section 2(b)(ii) and on which a margin as defined in Section 2(b)(i) applies to Australia;

(a) the Canadian Government will notify the Australian Government of goods to be admitted under Orders in Council under the Customs Act, and Section 12 of the Customs Tariff.

(b) in respect of those goods notified by the Australian Government as being goods where admission by Order in Council under the Customs Act is of particular interest the Canadian Government will give notice, 30 days in advance where practicable, to the Australian Government of goods to be admitted by such Orders in Council.

8. The above provisions shall remain in force for an initial period of one year and thereafter subject to the right of either Government to terminate upon 30 days notice; the above provisions may be reviewed at the request of either Government at any time after the first year of operation.

ANNEX II

RELATING TO DIRECT SHIPMENT AND THE OPERATION OF ARTICLE IV OF THE 1960 TRADE AGREEMENT

The Government of Canada, in respect of goods accorded tariff advan­tages provided for in paragraph 1 of Article I of the Canada/Australia Trade Agreement of 12 February 1960, undertakes the following:

(1) notwithstanding the direct shipment provisions of paragraph 1 of Article IV of the said Trade Agreement, goods specified in sub-para­graph (a) of paragraph (1) of Article I, that are shipped from Australia to Canada on a through bill of lading consigned to a consignee in a specified port in Canada, but that are not shipped direct, will be treated for purposes of the Customs Tariff of Canada as if they were shipped direct;

(2) notwithstanding the provisions of paragraph (2) of section 3 (and paragraph (2) of section 5) of the Customs Tariff of Canada, goods specified in sub-paragraph (b) of paragraph (1) of Article I of the said Trade Agreement, that are shipped from Australia to Canada on a through bill of lading consigned to a consignee in a specified port in Canada but that are not shipped in accordance with the aforemen­tioned provisions, will be treated for purposes of the Customs Tariff of Canada as if they were shipped direct;

(3) the foregoing provisions will not be extended to dried currants and raisins that are the growth or produce of Australia.

The foregoing provisions will remain in effect for a period of six months from the date of entry into force of the Exchange of Letters, and will continue in force unless the Government of Canada gives the Government of Australia 60 days prior notice of its intention to terminate them. In the event such notice of intention to terminate is given, the Government of Canada will, on request of the Government of Australia, consult on the matter.

ANNEX III

RELATING TO ANTI-DUMPING AND THE OPERATION OF ARTICLE VI OF THE 1960 TRADE AGREEMENT

In view of Canada becoming a party to the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade the two Govern­ments agree that the provisions of Article VI of the Canada/Australia Trade Agreement of 12 February 1960 will no longer be implemented between them and accordingly agree as follows.

The Government of Canada, in the application of its anti-dumping legisla­tion, will accord to goods which are the growth, produce or manufacture of Australia, treatment no less favourable than that accorded to goods which are the growth, produce or manufacture of countries party to the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade.

The Government of Australia, in the application of its anti-dumping legislation, will accord to goods which are the growth, produce or manufac­ture of Canada, treatment no less favourable than that accorded to any other country with the exception of New Zealand.

Furthermore, the two Governments agree that:

(1) the appropriate authority in each country will notify the Government of the other country of the initiation of an anti-dumping investigation in relation to goods which are the growth, produce or manufacture of the other country and the appropriate authority concerned will receive and take account of representations made to it;

(2) the appropriate authority of each Government will inform the Gov­ernment of the other country of changes in its anti-dumping legisla­tion and significant changes in the administration of such legislation; and

(3) the provisions of this Annex shall remain in force for an initial period of one year and thereafter shall be subject to the right of either Government to terminate upon 30 days notice but in any event shall not extend beyond the date of termination of the Canada/Australia Trade Agreement of 12 February 1960.

ANNEX IV

RELATING TO BUTTER UNDER SCHEDULE A TO THE 1960 TRADE AGREEMENT

Taking into account that butter is in Schedule A to the Canada/Australia Trade Agreement of 12 February 1960, the Government of Canada under­takes, subject to normal commercial considerations, that when Canada has an import requirement for butter it will turn to Australia as among preferred suppliers.

The Minister for Overseas Trade of Australia to the Acting Minister of Industry, Trade and Commerce of Canada

Canberra, 25th October, 1973

The Honourable Robert Andras,
Acting Minister of Industry, Trade and Commerce,
Department of Industry, Trade and Commerce,
Ottawa

My Dear Minister,

I have the honour to acknowledge receipt of your letter of October 24, 1973 (together with the attached annexes), authentic in English and French, which reads in English as follows:

(See Canadian Letter of October 24, 1973 with Annexes)

I have the honour to inform you that the foregoing proposals are accept­able to the Government of Australia and I have the honour to confirm that your letter and the attached annexes together with this reply and attached annexes, shall constitute and evidence an Agreement in the matter between our two Governments which shall enter into force on today's date.

Yours sincerely,

J. F. Cairns