Opening Australia’s trade window

| November 21, 2021

Trading is a complex business. Members of the international trading community must deal with multiple regulatory authorities when importing or exporting goods.

Remarkably, trade-related regulatory requirements are administered and enforced by more than 30 agencies at the federal level in Australia, as well as some at the state and territory level. There is very little administrative coordination among the various agencies and the linkages between them have not been automated.

For example, to import a motor vehicle you will require approval from the Department of Infrastructure, Transport, Regional Development and Communications. There is also a need to lodge an import declaration with Australian Border Force, pay relevant duties and taxes, and arrange a biosecurity inspection with the Department of Agriculture, Water and the Environment. Testing for the presence of asbestos may also be required, in accordance with Safe Work Australia’s Model Code of Practice and the applicable state or territory Work Health and Safety laws.

If you are importing a luxury vehicle you will also need to be registered with the Australian Tax Office for the GST and the Luxury Car Tax. And if you wish to drive on Australian roads, then state and territory registration and insurance requirements come into play.

Not surprisingly, the need for a coordinated, whole-of-government approach has been high on the agenda for both the Australian government and industry for many years. Focus has been on the introduction of a ‘trade single window’ that would enable traders to access relevant government services through a single digital interface.

Trading information would need to be provided to government only once, and regulatory agencies would receive and respond to user requirements through the interface. Efficiency gains would be realised through a substantial reduction in compliance costs incurred by businesses importing and exporting goods, with savings ultimately flowing through to the consumer.

While estimates of up to 50 per cent savings in compliance costs have been cited in some international studies, potential savings for Australian traders are unknown as the design of the Australian model is yet to be determined.

At the international level, the concept has most recently been driven by the WTO’s Trade Facilitation Agreement, which came into force in February 2017. Article 10(4) of the agreement advocates the establishment of national single windows to enable traders to submit data requirements through a single entry point to regulating authorities.

An Australian industry-funded study in 2018 found that, while implementation of a trade single window may be the ultimate goal, Australia may be better served by first laying the groundwork for such a system by seeking to improve coordination and cooperation among agencies.

While everyone agrees that such coordination is critical, there is no agreement on how this should be achieved. The problem emanates from the underlying patch mentality of regulatory agencies —everyone agrees that coordination is essential, but nobody actually wants to be coordinated.

To date, even the messaging has lacked coordination. In January 2018, the Department of Home Affairs informed a parliamentary committee on trade and investment growth that it planned to introduce a single window, which it described as ‘one data touch point for all regulatory information and transactional requirements, underpinned by advanced information sharing between government agencies and system interoperability’.

That same month the Department of Foreign Affairs and Trade (DFAT) formally advised the WTO that the Australian single window was already in operation — advice which DFAT then repeated in 2019 and again in 2020.

The reason for DFAT’s claim was its wish to assure the WTO and fellow member states that Australia had ticked all the boxes of the recently adopted Trade Facilitation Agreement. The system that DFAT has promoted as Australia’s ‘single window’ is the Integrated Cargo System through which details of imports and exports are communicated between traders and the Australian Border Force, along with certain biosecurity details that are accessed through the system by the Department of Agriculture, Water and the Environment.

But does Australia already have a trade single window? The government, in delivering its 2020–21 Budget, thought not. It announced that, as part of its AU$28.6 million (US$20 million) investment in the proposed Simplified Trade System, a trade single window would ‘play a key role in busting congestion at the border’. An additional AU$37.4 million (US$26 million) to progress the Simplified Trade System reforms was subsequently announced in the 2021–22 Budget ‘to enhance the international competitiveness of the Australian economy’.

In June 2021, the government announced the establishment of a ‘new taskforce to simplify trade’ — the Simplified Trade System Implementation Taskforce. Its charter is to support Australian importers and exporters by reviewing federal regulations that impact international trade and by modernising associated ICT systems.

This includes the development of the long-awaited trade single window, although the taskforce appears to be shying away from the ‘single window’ descriptor, which has probably lost its appeal due to the failure of past attempts to introduce one. Instead, the taskforce refers to this element of the government’s trade agenda as a ‘tell-us-once digital model’.

It appears that the new taskforce is well placed to succeed where previous attempts have failed. The reform agenda itself has whole-of government leadership, with the work of the taskforce being overseen by the ministers responsible for trade, customs, and biosecurity, supported by the Prime Minister and Cabinet. The taskforce is being led by Randall Brugeaud who, having previously headed the Digital Transformation Agency, is uniquely qualified to deliver the digital model (read: trade single window).

As to whether the taskforce will achieve its objectives, only time will tell.

This article was published by the East Asia Forum.

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