Enhancing the Competitiveness of Australia’s International Traders (2019-2022)

Impact summary

International trade is vital to the Australian economy. In 2005, over 160 countries, including Australia, signed a Letter of Intent to implement the AEO scheme, but in May 2012 Australia announced its decision not to introduce such a scheme. Australian industries were concerned that a lack of an Australian AEO scheme would place them at a disadvantage, as they would lack access to the benefits of Mutual Recognition Agreements/Arrangements (MRAs), so they commissioned CSU researchers to examine the matter during 2013 and 2014. This resulted in the publication of the research report in 2014 (Ref 1), which identified such initiatives as being implemented around the world, demonstrated the potential economic benefits of introducing such scheme in Australia and made specific recommendations to the stakeholders on what form an Australian program should take.

Prior to this research Australian traders were disadvantaged due to a government policy that failed to align with international standards. The CSU research was a key catalyst to the introduction of the Government’s Australian Trusted Trader (ATT) program in 2016. ATT reduces regulatory requirements for Trusted Traders at the border, improves certainty in export markets, and expedites the flow of their cargo in and out of Australia, which means faster access to market and increased international competitiveness. Once accredited, businesses receive a range of trade facilitation benefits that simplify their customs processes. This provides Australian businesses with international trade facilitation benefits, such as reduced regulatory requirements both in Australia and in certain export markets that increase international competitiveness. The CSU research also supported the Government’s decision to enter into international MRAs with key trading partners, which provides benefits to ATT exporters. To date, Australia has signed 10 MRAs including those with 7 of its top ten two-way trading partners and these MRAs have “supported faster access to international markets with a combined total of $429 billion in two-way trade” (Bib 10). Since the launch of the ATT program in 2016, over 900 Australian businesses have joined the ATT and are reaping the commercial benefits of this government program. The impact of this research clearly extends beyond Australia and Australian traders have benefited from the ABF’s growing MRA network which included benefits such as faster clearance times reducing storage-related costs, and more efficient dealings with overseas customs authorities. Over the next 10 years (2021-2031), these MRAs will provide an estimated benefit of $2.8 billion to industry (Bib 11), which amounts to approximately 280 million per year.

In relation to the reference period, Australia concluded bilateral MRAs with Japan and Thailand on 27 June 2019 (Bib 16) and 1 April 2021 (Bib 11) respectively. The MRA with Japan is estimated to be worth $121 million to the Australian economy over the next 10 years (Bib 20). Between 1 July 2019 and 30 June 2022, 477 new business entities joined the ATT, bringing the total number of ATTs to 903 as at 30 June 2022 (Bib 15, 18) which represents 11.09 per cent of volume and 17.95 per cent by value of Australia’s two-way trade, which is an increase of 0.59 per cent and an additional $26 million in value in comparison to 2020–21 (Bib 18).

Research and engagement activities leading to impact

CSU researchers were supported through the CSU Centre for Customs and Excise Studies (CCES) and mainstream CSU support. Funding from the Australian International Trade and Transport Industry Development Fund (AITTIDF) and CSU enabled involvement of international experts in the project and engagement with end users through industry focus groups, interviews, surveys and consultations. AITTIDF and the major Australian industry associations also promoted the research, emphasising its importance with members of the international trade and transport industry throughout Australia. Utilising their professional networks and contacts, the researchers conducted numerous face-to-face meetings and interviews with officials from key Australian Government agencies to ensure applicability of results.

CSU has implemented several key initiatives to promote impact. For example, the CSU Enterprise Agreement mandates that at least 30% of an academic’s time be allocated to research activities. Additionally, the Employee Development Review Scheme requires researchers to articulate planned outreach and extension activities with end users, along with existing and prospective impacts. These initiatives ensure that research is translated to real-world benefits. In support of these generic programs the institution provided subdivision of researcher costs and made its facilities and equipment available for researchers, including those who were external to CSU, and supported researchers with arrangements relating to obtaining an Australian visa for an external overseas researcher and making domestic travel arrangements for researchers.

Through his long-standing engagement and collaboration with key Australian international trade and transport industry associations on various aspects of Australian and international trade, the principal investigator, Prof. David Widdowson, was able to obtain funding from the AITTIDF of $163,300, which represented 50% of total research costs. The other 50% was the in-kind contribution of CCES and CSU.

The impact was also enabled through continuous engagement with the industry during the research project, as well as in the months leading up to the research, through major industry associations including the Customs Brokers and Forwarders Council of Australia Inc (CBFCA), the Export Council of Australia (ECA), the Australian Federation of International Forwarders (AFIF), the Conference of Asia Pacific Express Carriers (CAPEC), Shipping Australia Limited (SAL) and the Australian Chamber of Commerce and Industry (ACCI). These industry associations facilitated contact with their respective members (i.e. Australian businesses representing various segments of the Australian trade and transport industries) including dissemination of invitations to participate in the focus groups, survey and interviews, and facilitating researchers’ participation in the meetings of the Export Council of Australia Agribusiness Working Group in September 2013 and Customs Trade Advisory Group (CTAG) in November 2013, which enabled the researchers to reach the end-users of the research (i.e. Australian businesses involved in international trade and transport) and productively engage with them and collect data.

About half way through the research project, an Interim Report was prepared and sent to the industry associations for review and feedback. This allowed researchers to identify issues that required further attention and make necessary adjustments to its research plan and approach.

The researchers engaged and consulted with representatives of the Australian industry during attendances of relevant industry annual conferences in Australia. Additionally, through their professional contacts and industry associations the researchers were able find several Australian companies who agreed to participate in in-depth interviews and provided permission to be included as case studies in the research report. This enabled the researchers to provide an indicative illustration of how Australian businesses are exposed to regulatory procedures at home and overseas. It also allowed identification of border-related impediments in Australia and overseas, and the benefits that introduction of an Accredited Operator regime would produce. The industry engagements allowed interviewees to speak freely and provide more detail about certain aspects of their business. This in turn provided researchers with a better insight into the business operations and information on issues about which they had no prior knowledge, and served to clarify issues that were of a more complex nature. It also allowed the interviewees to discuss matters of a sensitive nature which they did not wish to raise in a public forum. This approach helped to increase the impact of the research, as evidenced by the high uptake of the ATT program by Australian companies (Bib 4).

The researchers also used their professional contacts to arrange and conduct face-to-face meetings and interviews with officials from key Australian Government agencies including the Australian Customs and Border Protection Service (ACBPS), Department of Agriculture (DOA), Office of Transport Security (OTS), and the Department of Foreign Affairs and Trade (DFAT) and international organisations such as the World Customs Organization (WCO). To ensure the factual accuracy of the report and to enable any further comment, relevant parts of the Draft Report were circulated to Australian Government agency representatives and those businesses that provided input by way of case studies. In addition, the complete Draft Report was then circulated to the industry associations for review.

A review of impact processes and outcomes was undertaken during the research as a result of two significant events occurring during the period of the study. First, the release of the ACBPS ‘Blueprint for Reform 2013-2018’ in June 2013 (Bib 9), which was followed by ACBPS executive announcements that signaled the introduction of some form of ‘Trusted Trader’ program in Australia. Second, a momentous Trade Facilitation Agreement, which includes specific reference to trade facilitation measures for ‘Authorized Operators’, was settled by the World Trade Organization (WTO) members at its Ninth Ministerial Conference in December 2013. The former resulted in a greater research emphasis on the features that should be incorporated in a Trusted Trader scheme. The second event heralded a future international obligation on Australia’s part to introduce such a scheme and consequently the eventual introduction of the TTA ATT enabled Australia to comply with particular aspects of the WTO Trade Facilitation Agreement.

Research outputs associated with the impact

Ref 1.Widdowson, D., Blegen, B., Kashubsky, M., Grainger, A., (2014) Review of accredited operator schemes. CCES Research Series. Canberra: Centre for Customs and Excise Studies
Ref 2.Widdowson, D., Blegen, B., Kashubsky, M., Grainger, A., (2014) Review of accredited operator schemes: an Australian study. World Customs Journal 8(1), pp.17-34
Ref 3.Widdowson, D., Blegen, B., Kashubsky, M. (2015) Facilitating trade through trusted partnerships. Proceedings of the Inaugural INCU Global Conference, Canberra: International Network of Customs Universities, pp.285-299.
Ref 4.Widdowson, D., Blegen, B., Kashubsky, M. (2014) Facilitating trade through inter-agency cooperation, pp.423-432, in Gwardzinska, E., Werner, A., and Wierzbicki, J. (Eds.) Customs Policy – Economics, Law and Practice, Warsaw: Biblioteka Celnej Ksiazki.
Ref 5.Widdowson, D. (2014) AEO: A plurilateral approach to mutual recognition. Journal of Contemporary Economics and Business Issues 1(2), pp.67-77.

Researcher involvement

The research was conducted by Prof David Widdowson (CSU), Mr Bryce Blegen (CSU), Dr Mikhail Kashubsky (CSU) and Dr Andrew Grainger (University of Nottingham, UK).

Outcomes of research leading to impact

The research aimed to develop an Australian industry position for presentation to Government for consideration of an AEO-type scheme (Ref 1, 2). This was important as the Government announced in May 2012 that such a scheme would not be introduced, (following previous government-fundedal studies (; Bib 8). Industry proposed the research in 2012. The research remit and methodology was co-developed by CSU with industry and government between 2012 and early 2013; it formally commenced in June 2013 and was completed in March 2014 (Ref 1).

The research reviewed the various types of AEO schemes that were in use globally and identified options for their application in Australia. A principal focus of the research was the concept of AEO and the mutual recognition of such schemes between two countries, whereby an entity’s AEO status in one country is recognised by the customs agency of the other (Ref 1-3, 5).

The research included a review of initiatives being undertaken by key international organisations such as the World Customs Organization (WCO), International Civil Aviation Organization (ICAO) and World Trade Organization (WTO). It also examined AEO-type schemes that are in place, or being progressed by various Australian agencies such as the Department of Agriculture and incorporated the views of Australian industry (Ref 4).

Beneficiaries of the impact

The primary beneficiaries of this research are:
1. Australian exporters, importers, freight-forwarders, logistics services providers, transport operators (e.g. airlines and shipping companies), express carriers, customs brokers, Australian manufacturers, Australian Government, particularly the Australian Border Force (ABF) and other Australian border agencies, as well as the Australian economy at large.
Other beneficiaries are foreign economic operators and border agencies in countries with which Australia has MRAs, namely:
2. AEO-accredited New Zealand exporters.
3. AEO-accredited Canadian importers, exporters, customs brokers, warehouse operators, carriers (rail, sea, air, road), couriers, freight forwarders and shipping agents.
4. AEO-accredited South Korean importers, exporters, customs brokers, warehouse operators, and other stakeholders such as carriers.
5. AEO-accredited Japanese importers, exporters, customs brokers, warehouse operators, manufacturers and other stakeholders such as carriers.
6. AEO-accredited Chinese importers, exporters, customs brokers, warehouse operators, manufacturers and other stakeholders such as carriers.
7. AEO-accredited Hong Kong importers, exporters, warehouse operators, manufacturers and other stakeholders such as carriers.
8. AEO-accredited Singaporean importers, exporters, customs brokers, warehouse operators and manufacturers.
9. AEO-accredited Thai importers, exporters and customs brokers.
10. AEO-accredited Taiwanese duty-payers, exporters, manufacturers, customs brokers, freight forwarders, shipping agencies, warehouse operators and carriers (road, sea and air).

Details of the impact achieved

The research report became a principal resource in a subsequent Government review and was ultimately a catalyst for a reversal of the Government’s earlier decision not to introduce an AEO program. It led to the introduction of the ATT program, which was launched as a pilot on 1 July 2015 (Bib 1) and became fully operational in July 2016. The ATT incorporates many of the research recommendations (Bib 2 and Bib 12). In recognition of its contribution, CSU’s Centre for Customs and Excise Studies (CCES) received an award from the ABF in 2015 for “partnership, outstanding support and valued contribution in co-designing the ATT program” (Bib 26).

At the launch of the ATT in 2016, the then Minister for Home Affairs the Hon Peter Dutton said: “Trusted Trader is one of Australia's most significant international trade reforms”. In terms of economic impact, he said: “Over the next decade, the Australian Trusted Trader programme is expected to deliver an increase in household consumption of $2.2 billion, as well as additional business investment of almost $1 billion. For the Australian industry involved in the programme … there is expected to be a substantial benefit, a direct impact of $2.9 billion and associated regulatory savings of $42.2 million.” (Bib 3).

One of the key benefits is international Mutual Recognition Agreements/Arrangements (MRAs) with key trading partners. Where two countries have a Mutual Recognition Agreement (MRA), the AEO status of a company is recognised in both countries. This provides Australian AEOs in those countries with trade facilitation benefits such as expedited customs clearance and fewer checks. priority treatment at the borders, expedited customs clearance and faster processing, and fewer checks, which means more predictability, certainty, and distribution speed to overseas markets (Bib 10). Establishing AEO MRAs with key trading partners is an important part of the work of the ABF. These arrangements benefit Trusted Traders as well as the Australian economy. In addition, they support global trade facilitation and help to strengthen supply chain security (Bib 10). The former ABF Commissioner has described it as having dual benefits “in terms of contribution to trade and prosperity, but it also has the complementary objective of improving our national security” (Bib 7).

To date, Australia has negotiated and signed 10 MRAs including those with 7 of its top ten two-way trading partners and these MRAs have “supported faster access to international markets with a combined total of $429 billion in two-way trade” (Bib 10). Australian traders have benefited from the ABF’s growing MRA network which included benefits such as faster clearance times reducing storage-related costs, and more efficient dealings with overseas customs authorities. Over the next 10 years (2021-2031), these MRAs will provide an estimated benefit of $2.8 billion to industry (Bib 11), which amounts to approximately 280 million per year.

As one Australian exporter, Fulton Market Group, stated: “As an Australian Trusted Trader, we are automatically recognised under the Australia-Japan and Australia-Korea MRAs. Our Japanese and Korean customers are excited that this means that overseas customs agencies will prioritise clearance of our goods at their borders, meaning that our customers can receive their imports from us quicker.” (Bib 10)

ATT importers are no longer required to obtain or present origin certification documents, such as a Certificate of Origin (CoO) or Declaration of Origin (DoO), in order to claim preferential rates of duty under certain free trade agreements (FTAs) or goods manufactured in developing or lesser developed countries and imported under Schedule 1 of the Customs Tariff Regulations 2004 (Bib 22). In November 2019, the ABF’s ATT program ‘Origin Waiver Benefit’ was expanded to least developed and developing countries, which now reduces non-tariff barriers to trade for importations from over 90 per cent of economies globally, which encourages trade volumes and reduces the cost of doing business for ATTs (Bib 16). This benefit now applies to imports from a total of 174 countries (Bib 23).

The ATT ‘Origin Advance Ruling’ benefit assists Trusted Traders importing goods under the China Australia Free Trade Agreement (ChAFTA). This benefit allows Trusted Trader importers to request a single, special advance ruling that refers to goods classified under multiple tariff classifications and consignments, which meet the rules of origin and consignment rules under ChAFTA. The ATT Origin Advance Ruling replaces the need for multiple conventional advance rulings and is valid for five years. Trusted Traders benefit from reduced administrative burden associated with obtaining Certificates of Origin by replacing the need for multiple origin advices and the direct costs that may be incurred by using a third party to obtain them (Bib 19).

The primary beneficiaries of the research are Australian businesses involved in international trade and transport, including exporters, importers, manufacturers, freight-forwarders, logistics services providers, transport operators (e.g. airlines, shipping companies), express carriers, customs brokers and other service providers, all of which are eligible to apply for ATT accreditation and thereby receive the associated benefits of facilitated trade transactions (see Bib 5).

Given that ATT is voluntary, businesses join it only if they consider that the potential benefits outweigh the costs of participation. Between 1 July 2019 andTo date30 June 2022, some 160 477 new business entities companies have joined the ATT (Bib 4), bringing the total number of ATTs to 903 as at 30 June 2022 (Bib 15, 18), which represents 11.09 per cent of volume and 17.95 per cent by value of Australia’s two-way trade, which is an increase of 0.59 per cent and an additional $26 million in value in comparison to 2020–21 (Bib 18), and several case studies have been published showcasing the positive impact of the scheme (see Bib 6).

In 2018, in its report the World Trade Organization, the Australian government has stated that “It is estimated the total benefit of Australian Trusted Trader is $3.5 billion in nominal terms over a ten-year period (2015-2025). Mutual Recognition Arrangements (MRAs), which allow recognition of Trusted Trader status, are estimated to account for $2.8 billion of this.” (Bib 12), which means approximately $280 million per year totalling $1.12 billion between 2019-2022.

In addition, this research benefits businesses accredited as Authorised Operators/AEOs in countries with which Australia has MRAs because where two countries have an MRA, the AEO status of businesses is recognised in both countries, so the AEO-certified exporters from both countries are able to enjoy preferential customs procedures and treatments at the other side, whose competitiveness will be significantly enhanced through their access to the trade environment of facilitated customs clearance procedures, strengthened supply chain security, and just-in-time and zero-inventory logistics management (Bib 25).

The research also benefits the Australian Government as it has resulted in the new regulatory framework that better facilitates legitimate trade while maintaining appropriate levels of trade security. The ABF Commissioner has described it as having dual benefits “in terms of contribution to trade and prosperity, but it also has the complementary objective of improving our national security” (Bib 7). For example, the ATT ‘Origin Advance Ruling’ benefit has contributed to the Department of Home Affairs receiving 51 per cent less requests for valuation and rules of origin advice in 2018–19 compared to the number of requests received in 2017–18. This reduces fees and simplifies business processes (Bib 15). Likewise, the research benefits border agencies in countries with which Australia has AEO MRAs because imports by accredited ATTs are considered as low-risk and therefore require less resources to be expended by border agencies in those countries to be spent on ensuring compliance (Bib 10).

In recognition of its contribution, CSU’s Centre for Customs and Excise Studies (CCES) received an award from the ABF for “partnership, outstanding support and valued contribution in co-designing the ATT program”.

With the introduction of the ATT, as at June 2018 Australia has already had concluded MRAs with a number of its key trading partners, including New Zealand, Hong Kong, Canada, South Korea, and China and Singapore (Bib 14) and it concluded an MRA with Taiwan on 18 September 2018 (Bib 24). Between 2019-2022 Australia concluded two more MRAs: with Japan on 27 June 2019 (Bib 16) and Thailand on 1 April 2021 (see Bib 511), so the impact of the research extends beyond Australia. According to the ABF, this “has supported faster access to international markets which represents a combined total of $429 billion in two-way trade” (Bib 10).

Bibliography
Bib 1.Australian Government, Federal Register of Legislation, Customs (Australian Trusted Trader Programme) Rule 2015, available at: https://www.legislation.gov.au/Details/F2017C00608
Bib 2.World Customs Organization, (2015, July 16) ‘Australian Trusted Trader Launches’ WCO Newsroom, available at: http://www.wcoomd.org/en/media/newsroom/2015/july/australian-trusted-trader-launches.aspx
Bib 3.Dutton, P. (2016, August 19) Address at the Launch of Australian Trusted Trader, Sofitel Hotel, Melbourne, available at: http://minister.homeaffairs.gov.au/peterdutton/Pages/address-launch-trusted-trader.aspx
Bib 4.Department of Home AffairsAustralian Border Force (n.d.a2024, April 30) Accredited Trusted Traders, available at: https://www.homeaffairs.gov.au/busi/cargo-support-trade-and-goods/australian-trusted-trader/accredited# https://www.abf.gov.au/about-us/what-we-do/trustedtrader/accredited-trusted-traders
Bib 5.Department of Home AffairsAustralian Border Force (n.d.ba) Benefits of Australian Trusted Trader, available at: https://www.abf.gov.au/about-us/what-we-do/trustedtrader/benefitshttps://www.homeaffairs.gov.au/busi/cargo-support-trade-and-goods/australian-trusted-trader/benefits
Bib 6.Department of Home AffairsAustralian Border Force (n.d.cb) Case Studies, available at: https://www.abf.gov.au/about-us/what-we-do/trustedtrader/case-studieshttps://www.homeaffairs.gov.au/busi/cargo-support-trade-and-goods/australian-trusted-trader/case-studies
Bib 7.Quaedvlieg, R. (2015, November 19) Welcome Address at 2015 Industry Summit, available at: https://www.homeaffairs.gov.au/about/news-media/speeches-and-messages/2015/2015-industry-summit-commissioner
Bib 8.Australian Customs and Border Protection Service, (2012) Authorised Economic Operator – Australian Position. Document No Longer Publicly Available
Bib 9.Australian Customs and Border Protection Service, (2013) Blueprint for Reform 2013-2018. Document No Longer Publicly Available.
Bib 10.Australian Border Force (n.d.c.) Mutual Recognition Agreements, available at: https://www.abf.gov.au/about-us/what-we-do/trustedtrader/benefits/mutual-recognition-arrangements
Bib 11.Wood, J. (2021, April 6) Australia-Thailand Mutual Recognition Arrangement to Support Economic Recovery, available at: https://minister.homeaffairs.gov.au/jasonwood/Pages/mutual-recognition-arrangement-support-economic-recovery.aspx
Bib 12.World Trade Organization (2018, September 27) Australia’s Authorized Economic Operator Program (AEO), available at: https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=248622,248426,248407,248404,248457,248379,248272,248277,248085,248034&CurrentCatalogueIdIndex=5&FullTextHash=&HasEnglishRecord=True&HasFrenchRecord=True&HasSpanishRecord=True
Bib 13.Australian Border Force (2024, April 18) Australia and India Sign Authorised Economic Operator Mutual Recognition Arrangement to strengthen relations, available at: https://www.abf.gov.au/newsroom-subsite/Pages/Australia-and-India-sign-Authorised-Economic-Operator-Mutual-Recognition-Arrangement-to-strengthen-relations.aspx
Bib 14.Department of Home Affairs (2018) 2017-18 Annual Report Canberra, p.70 available at:https://www.homeaffairs.gov.au/reports-and-pubs/Annualreports/2017-18/01-annual-report-2017-18.pdf
Bib 15.Department of Home Affairs (2019) 2018-19 Annual Report Canberra, p.72 available at: https://www.homeaffairs.gov.au/reports-and-pubs/Annualreports/home-affairs-annual-report-2018-19.pdf.
Bib 16.Department of Home Affairs (2020) 2019-20 Annual Report Canberra, p.87 available at: https://www.homeaffairs.gov.au/reports-and-pubs/Annualreports/home-affairs-annual-report-2019-20.pdf.
Bib 17.Department of Home Affairs (2021) 2020-21 Annual Report Canberra, p.27, available at: https://www.homeaffairs.gov.au/reports-and-pubs/Annualreports/home-affairs-annual-report-2020-21.pdf
Bib 18.Department of Home Affairs (2022) 2021-22 Annual Report Canberra, p.132, available at: https://www.homeaffairs.gov.au/reports-and-pubs/Annualreports/home-affairs-annual-report-2021-22.pdf
Bib 19.Australian Border Force (n.d.d.) Australian Trusted Trader (ATT) Origin Advance Ruling, available at: https://www.abf.gov.au/about-us/what-we-do/trustedtrader/benefits/origin-advance-ruling
Bib 20.Wood, J. (2019, September 25) Trusted Traders Get Faster Access to the Japanese Market, available at: https://minister.homeaffairs.gov.au/jasonwood/Pages/trusted-traders-japanese-market.aspx
Bib 21.Australian Border Force (n.d.e.) Australian Trusted Trader Overview, available at: https://www.abf.gov.au/about-us/what-we-do/trustedtrader/overview
Bib 22.Australian Border Force (n.d.f.) Origin Waiver Benefit, available at: https://www.abf.gov.au/about-us/what-we-do/trustedtrader/benefits/origin-waiver-benefit
Bib 23.Customs Tariff Regulations 2004 (Cth), available at: https://austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_reg/ctr2004287/sch1.html
Bib 24.World Customs Organization (n.d.) Online AEO Compendium, available at: https://aeo.wcoomd.org/list/country/188#responseContainer
Bib 25.Taiwan Customs Administration (2018, September 19) Taiwan and Australia Sign the Arrangement for Mutual Recognition of AEO to Facilitate Bilateral Trade, available at: https://aeo.customs.gov.tw/portal/aeop13_detail;jsessionid=9CF3BE1DAD85AE1246CF545617742CD2.1?language=english&newsId=US1120180919001
Bib 26.Australian Border Force (2015) Award Certificate.

Impact date	2019 → 2022
Category of impact	Economic Impact, Public policy Impact
Impact level	International