AGREEMENT ON TRADE AND COMMERCIAL RELATIONS BETWEEN THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF PAPUA NEW GUINEA [PATCRA I]
(Port Moresby, 6 November 1976) 

ENTRY INTO FORCE: 1 FEBRUARY 1977 

THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF PAPUA NEW GUINEA, 
BEARING IN MIND the close trading and commercial relations existing between their two countries, 
ACKNOWLEDGING their respective international rights and obligations, 
DESIRING to maintain and strengthen trade and commercial relations between their two countries, and 
HAVING RESOLVED to establish between their two countries a Free Trade Area with a view to the sustained development of their economies through expansion of trade and investment in accordance with their respective social and economic objectives, 
HAVE AGREED as follows: 
Article 1
Definitions
In this Agreement, unless the contrary intention appears: 
"Australia" means the states and the mainland territories of Australia; 
"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; 
"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 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; 
(c) to further the development of the Area by the promotion of direct investment which is consistent with the foreign investment policies and priorities of the recipient Member States; 
(d) to promote and facilitate commercial, industrial, administrative and technical co-operation between the Member States; and 
(e) 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 
(C) partly on such material and partly on such other items of factory cost, 
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 Member States may agree 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 
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 Port 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. 
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 connexion 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; 
(c) the rules and formalities connected with the importation or exportation of goods; 
(d) all internal taxes or other internal charges of any kind imposed on, or in connexion with, imported goods; 
(e) all laws, regulations and requirements affecting 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 provisions 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;
(c) necessary for the prevention of disorder or crime;
(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 and regulations 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 as long as necessary the application to the goods concerned of the provisions of Article 3 of this Agreement.
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 those 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. 
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 as long as necessary the application to the goods concerned of the provisions of Article 3 of this Agreement. 
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, will consult, when necessary and practicable, 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. The Australian Government will endeavour to interest and encourage Australian enterprises 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 consultations 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. 
Article 15
Industry co-operation
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.
Article 16
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. 
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 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 promotion 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 connexion 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. 

Article 19
Commercial commodity contracts 
To advance the objectives of this Agreement, the Member States 
(a) shall 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 shall 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.
It is acknowledged that the organisations or enterprises referred to in this Article might be either governments of 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, on request, shall 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. The first such consultations shall take place not later than one year after the date of entry into force of this Agreement, and thereafter 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 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.
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.[1] 
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 Port Moresby this 6th day of November, One thousand nine hundred and seventy-six. 

FOR THE GOVERNMENT OF AUSTRALIA:
[Signed:]
JOHN HOWARD
	
FOR THE GOVERNMENT OF PAPUA NEW GUINEA:
[Signed:]
MAORI KIKI

SCHEDULE A 
Australian 
Tariff Item 	Brief description of goods 	
		
03.03.100 	Prawns, crustaceans 	
07.02.100} 	Vegetables preserved by freezing 	
07.02.900} 		
08.10 	Fruit preserved by freezing 	
09.01.900 	Coffee, other roasted, husks and skins, other 	
09.10.400 	Ginger in packs, in liquid 	
09.10.500 	Ginger, NSA 	
Ex 15.07.3 	Peanut oil 	
16.04.220 	Tuna, prepared or preserved 	
16.04.240 	Cutlets, chunks, etc other than salmon or tuna 	
16.05.200 	Prepared or preserved shrimps, prawns and their meat not packed in airtight 	
	containers 	
20.02.300 	Mushrooms 	
20.03 	Fruit preserved by freezing 	
20.06.100 	Ginger in syrup 	
20.06.910} 	Other preserved fruit 	
20.06.990} 		
21.02.100 	Extracts, essences or concentrates of coffee 	
24.01 	Tobacco, unmanufactured 	
39.01.330} 		
39.02.330} 	Coated textile fabrics 	
39.03.330} 		
39.07.230 	Coats (plastic) 	
39.07.240 	Curtains (plastic) 	
44.18.000 	Reconstituted woods, etc, particle board 	
48.09.100 	Hardboard 	
50.09.3} 	Silk fabrics containing not less than 20 per cent by weight of man-made fibres 	
50.10.2} 		
Ex 51.01 (a) 	Man-made fibre yarn, other than viscose yarn 	
Ex 51.03 (a) 	Man-made fibre yarn, other than viscose yarn 	
Ex 51.04 (a) 	Woven fabrics of man-made fibre, other than viscose tyre cord fabrics 	
Ex 55.05 (a) 	Cotton yarn 	
55.08 	Terry towelling 	
Ex 55.09 (a) 	Other woven fabrics of cotton 	
Ex 56.05 (a) 	Yarn of man-made fibres 	
Ex 56.06 (a) 	Yarn of man-made fibres 	
Ex 56.07 (a) 	Woven fabrics of man-made fibres 	
Ex 58.02 (a) 	Other carpets 	
Ex 58.04 (a) 	Other woven pile fabrics 	
Ex 58.05 (a) 	Narrow woven fabrics 	
58.06 	Woven labels and badges 	
Ex 59.03 (a) 	Bonded fibre fabrics 	
59.04 	Twine, cordage 	
59.08 	Plastic coated fabric 	
Ex 59.11 (a) 	Rubberised textile fabrics 	
60.01 	Knitted fabrics 	
60.03 	Stockings, socks 	
60.04 	Knitted undergarments 	
60.05 	Knitted outergarments 	
60.06 	Knitted fabrics 	
61.01 	Men's and boys' outergarments 	
61.02 	Women's, girls' and infants' outergarments 	
61.03 	Men's and boys' undergarments 	
61.04 	Women's, girls' and infants' undergarments 	
61.09 	Corsets, brassieres, braces and the like 	
61.11 	Made up apparel accessories 	
62.02 	Bed linen, curtains, etc 	
62.03 	Sacks and bags 	
62.05 	Other made up textile articles 	
64.01 	Footwear, rubber or plastic uppers and soles 	
64.02 	Leather footwear and footwear with rubber or plastic soles 	
64.03 	Other footwear, wood/cork soles 	
64.04 	Other footwear, other soles 	
64.05 	Parts for footwear 	
71.16 	Imitation jewellery 	
90.03.000 	Spectacle frames 	
90.04.000 	Spectacles, etc 	
94.01 	Chairs and other seats 	
94.03.900 	Other furniture 	
(a) These items exclude all products which are admitted free of duty under the Preferential Tariff. 

SCHEDULE B
Australian 
Tariff Item 	Brief description of goods 	Import treatment 	
			
08.09.100} 		- Quantities not exceeding 273,000 litres single strength 	
08.10.100} 		equivalent per annum 	
08.11.100} 	Passionfruit pulp and 	- duty free 	
20.03.100} 	passionfruit juice 	- quantities in excess of the above amount and other 	
20.06.300} 		juices falling within item 20.07.500 	
20.07.300} 		- rate of duty specified in the Australian Customs 	
20.07.500} 		Tariff 	
			
44.15.100 	Plywood (excluding 	- Quantities of moisture resistant plywood not 	
	plywood covered with any 	exceeding 7.1 million square metres on a 1mm basis 	
	other material) 	- duty free 	
		- quantities of moisture resistant plywood in excess of the above amount and other plywood falling within item 44.15.100 	
		- rate of duty specified in the Australian 	
		Customs Tariff 	

SCHEDULE C
Papua New Guinea Tariff Item 	Description of goods 	
		
Ex 2 	Poultry dressed and poultry pieces, frozen 	
12 	Rice, whether in husk or not (including polished and broken rice) 	
14 	Meal and flour of wheat (including meslin) 	
17 	Biscuits of all kinds 	
19 	Dried fruits, including artificially dehydrated 	
21 	Confectionery, ie, all types of candy and chocolate; candied, glaced or crystalised fruit peel, parts of plants; not including mixed or candied fruits ready-prepared for culinary use 	
22 	Preserved fruits (including ginger, n.e.i.) whole or in pieces, whether frozen in brine or in airtight containers, fruit pulp, n.e.i. 	
25 	Fruit syrups, cordials and natural fruit flavours 	
28 	Coffee beans whether roasted or otherwise including all preparations thereof 	
31 	Tea, including all preparations thereof 	
32 	Spices, including all preparations thereof, including sauces and prepared condiments, chutney, tomato pulp and pickles 	
33.01 	Dog and cat food in any form 	
51 	Non-spirituous preparations; ale and other beer, porter, cider and perry, n.e.i. lime-juices and other fruit juices, n.e.i., for compounding non-alcoholic beverages and fruit cordials 	
52 	Powders and flavourings, n.e.i., for compounding non-alcoholic beverages 	
53.01 	Wine, grape, sparkling 	
53.02 	Wine, other than sparkling, containing less than 16 per cent by volume of alcohol 	
53.03 	Wine, grape, still, including medicated wine and vermouth 	
53.04 	Grape, unfermented 	
53.05 	Other than grape, n.e.i., including Sake and Samshu: 	
53.05.1 	when not exceeding strength of proof 	
53.05.2 	when exceeding the strength of proof 	
54 	Wines, which the person vested with the control of management of a Christian Mission in the Territory declares to be intended for use by the Mission for Sacramental purposes only 	
55 	Aerated and mineral waters 	
60 	Ale and other beer, porter, cider and perry, spirituous in bottle or in bulk 	
61 	Spirits and spirituous liquors, containing not more than 57 per cent by volume of alcohol 	
62 	Spirits and spirituous liquors, containing more than 57 per cent by volume of alcohol 	
70 	Tobacco, unmanufactured 	
71 	Cigars and cheroots, including the weight of ribbons and band 	
72 	Cigarettes, including weight of cards and mouthpieces contained in inside packages 	
73 	Tobacco, trade (in sticks or figs) 	
74 	Tobacco, manufactured for human consumption (smoking, chewing or snuff). Including the weight of tags, labels and other attachments 	
80 	Wood, in the round or roughly squared including pulpwood, sawlogs, shaped or simply worked. Lumber, sawn, planed, grooved, tongued, etc 	
81 	Cork, raw and waste (including natural cork in blocks and sheets) 	
82 	Pulp and waste papers (not including newspapers for wrapping purposes) 	
88 	Crude animal material, inedible, n.e.i., including unworked or simply prepared sea shells, bones, ivory, bristles, hair and the like, hides and skins 	
89 	Crude vegetable material consisting of unworked or simply prepared bamboo and cane 	
100 	Petroleum, crude and partly refined for further refining (including natural gasoline 	
101 	Aviation gasoline and aviation turbine kerosene 	
102 	Motor spirit, including gasoline petrol and any other petroleum or shale spirit, n.e.i., for similar use 	
103 	Kerosene, n.e.i., including power, lighting, illuminating oil and the like 	
104 	White spirit, including benzolene, pentane, mineral naphta, mineral spirits, turpentine substitutes and mineral solvents 	
105 	Gas oil, diesel oil and other fuel oils, including residual and solar oils 	
106 	Oils, lubricating, including mixtures with animal and vegetable lubricants, inedible, n.e.i. 	
107 	Greases, lubricating of all types 	
116 	Ethyl alcohol, denatured or not, including methyl chloride and refrigerant gases, spirits of turpentine, other than mineral turpentine and alcohols, n.e.i. 	
117 	Chemical elements and compounds, inorganic or organic, n.e.i. 	
123 	Pigments, paints, varnishes and related materials being prepared paints, enamels, lacquers, varnishes, artists colours, siccatives (paint driers) and mastics and all other pigments and colouring materials, n.e.i., putty, distempers and the like 	
131 	Spirituous preparations (non-medicinal), viz: 	
	essences, fruit and other esters, aromas and flavours, fluid extracts, sarsaparilla, tinctures, infusions, lime-juice and other fruit juices and fruit syrups: 	
131.01 	containing not more than 14.25 per cent by volume of alcohol 	
131.02 	containing more than 14.25 per cent but not more than 57 per cent by volume of alcohol 	
131.03 	containing more than 57 per cent by volume of alcohol 	
134 	Perfumery, cosmetics, soaps and cleansing and polishing preparations viz: 	
134.01 	perfumes, whether spirituous or aqueous 	
136 	Cosmetics and toilet preparations, n.e.i., including shaving soap, bath salts, perfumed soap crystals and the like 	
137 	Dentifrices, dental fixative powders and the like 	
Ex 138 	Soap, toilet, fancy or medicated, soap, n.e.i., including laundry 	
139 	Waxes, polishes and paste, powder and liquid cleansers and similar preparations, n.e.i. (not including any type of vehicular polish) 	
140 	Vehicular polish and dressing of the type used for leather, furniture, floor 	
150 	Ammunition of all types 	
151 	Fireworks 	
154 	Plastic material in liquid, powder, blocks, sheets, rods, tubes and other primary forms, n.e.i. 	
156 	Glue, and glue components, viz: casein, albumen, gelatine and preparations thereof, n.e.i. 	
157 	Chemical materials and products, n.e.i., including brake fluid 	
170 	Leather of all kinds, including reconstituted, artificial or composition 	
172 	Manufactures of leather, n.e.i. 	
174 	Rubber fabricated materials, n.e.i., including pastes, plates, sheets, rods, threads and the like 	
177 	Rubber tyres and tubes: for vehicles, n.e.i. 	
178 	Rubber manufactures: consisting of bedding 	
179 	Rubber manufactures, whether of soft or hard rubber, n.e.i. 	
180 	Crude rubber (including synthetic) and reclaimed and waste and scrap of unmanufactured rubber, except waste of hardened rubber 	
190 	Wood manufactures, including plywood, veneers, artificial or reconstituted wood in sheets, blocks or boards, n.e.i. 	
191 	Wood manufactures consisting of household utensils 	
192 	Wood manufactures, n.e.i., including boxes, cases, crates and parts thereof; casks and cooperage products, builders woodwork and the like and excluding fancy goods 	
194 	Cork and agglomerated cork manufactures, n.e.i. 	
195 	Paper and paper manufactures, viz: 	
195.01 	printing, in rolls not less than 10 in. in width or in sheets not less than 161/2 in. x 21 in., or its equivalent, which is imported solely for printing purposes and declared to be imported solely for such purposes 	
197 	Cigarette paper, in bulk rolls or sheets 	
198 	Paper stationery of all kinds, including envelopes, writing, typewriting, duplicating papers and the like, albums (other than fancy), diaries, account and exercise books, filing boxes and the like 
Blotting paper in bulk rolls or sheets; filter paper and blocks in bulk rolls, 
sheets, blocks or slabs 	
199 	Cigarette papers cut to size, in books or packets of 60 papers or the equivalent of 60 papers 	
200 	Playing cards 	
201 	Manufactured articles of papers, paper pulp and paperboard, n.e.i. 	
202 	Paper bags, whether printed or unprinted 	
211 	Cotton textile, including canvas and fabrics of mixed materials of which cotton is the chief component by weight. Textile fabrics, n.e.i., including silk, wool, jute, synthetic fibres, spun glass, fabrics of regenerated or partly regenerated cellulose, protein and similar fibres, including rayon, nylon and artificial silk 	
212 	Lace, including tulle, embroidery ribbons, trimmings, net and netting and the like 	
214 	Manufactures of rope, cordage and twine 	
217 	Textile products, n.e.i., including felts, n.e.i., elastics, webbing and the like 	
218 	Articles made wholly or chiefly of textile materials (excluding apparel and attire), viz: 	
218.02 	Tarpaulins, tents, awnings, sails and made-up canvas articles, n.e.i. 	
218.03 	bed-linen, table-linen, toilet-linen and kitchen-linen, made up curtains, draperies and made up household articles of textiles, n.e.i. 	
218.05 	bunting 	
230 	Floor coverings of all materials including carpets, linoleum, matting and mats, floor rugs and the like 	
231 	Tiles, plastic, rubber or linoleum 	
232 	Tapestry 	
234 	Cement pipes 	
238 	Asbestos manufactures, n.e.i., including yarn thread, cord jointing packing and the like. Non-metallic mineral manufactures, n.e.i., and articles of ceramic materials, n.e.i., excluding building materials 	
250 	Glassware manufactures for household, hotel and restaurant use 	
251 	Glassware manufactures, n.e.i. 	
252 	Pottery, crockery and kitchenware including jugs, jars and articles of ordinary baked clay, stoneware, earthenware, chinaware, porcelainware and the like, consisting of household utensils 	
253 	Pottery, n.e.i. 	
260 	Gold, silver and platinum dental and medical unworked or partly worked 	
261 	Precious metals, n.e.i., worked or unworked 	
262 	Precious and semi-precious stones and pearls unworked or worked 	
263 	Jewellery and goldsmiths' and silversmiths' wares, including set gems 	
264 	Imitation jewellery 	
273.01 	Castings and forgings, n.e.i., consisting of nestible corrugated steel pipes and arches 	
277 	Wire rope or iron and steel, or non-ferrous metals, including slings and similar articles 	
278 	Wire fencing consisting of barbed wire 	
280 	Nails, steel wire other than: 
(a) Galvanized steel wire nails; 
(b) tacks, brads, panel pins; or 
(c) hardboard and wallboard nails, whether of bright steel wire or plated wire or being 16-gauge and finer 	
283 	Firearms being rifles, revolvers, guns and pistols, including air-guns, air-pistols and the like 	
290 	Household or domestic utensils of metal whether enamelled or tinned and of synthetic materials, including cutlery being household domestic cutlery whether plated or not 	
291 	Cutlery, n.e.i., including scissors, razors (except electric), hand operated clippers and the like 	
295.01 	Manufactures of metal being welded fabrics 	
296 	Manufactures of metals, n.e.i. 	
297 	Drums, commonly known as "4-gallon" or "44-gallon" drums, being: 
(a) empty drums; or 
(b) drums containing: 
(i) motor spirit; or 
(ii) kerosene, 
not being containers within the meaning of Item 493 	
303 	Marine engines, viz: 	
303.01 	Outboard engines including parts and accessories 	
303.02 	Inboard engines and inb/outb engines including parts and accessories, viz: 	
303.02.01 	up to and including 30 H.P. 	
305 	Parts for all types of marine engines 	
306 	Motor vehicle and motor cycles engines and parts therefor 	
308 	Agricultural machinery consisting of lawn mowers, hand or power operated and parts therefor 	
311 	Office machinery and fashioned parts, including typewriters, accounting, bookkeeping, calculating and statistical machines, cash registers, dictaphones, micro-film readers and the like 	
314 	Air conditioners and parts therefor and air conditioning equipment 	
315 	Deep freezers and refrigerators, n.e.i. and parts for all types of deep freezers and refrigerators 	
316 	Refrigerating machinery, equipment and parts 	
317 	Sewing machines, domestic 	
318 	Weighing machines 	
321 	Component parts of batteries and accumulators, viz: 	
321.02 	n.e.i. 	
322 	Batteries and accumulators of all kinds when imported assembled 	
323 	Incandescent lamps, arc lamps, tubes and the like for electric lighting 	
324 	Portable transistorised radio receiving sets, not exceeding $20 f.o.b. in value 	
325 	Portable transistorised radio receiving sets, n.e.i. 	
326 	Radio or television receiving sets, including those with record players and/or tape recorders attached, parts and accessories 	
328 	Portable electric appliances, including domestic appliances, n.e.i., domestic vacuum cleaners, washing machines, floor polishers, hair clippers, shavers, food mixers and the like 	
330 	Electric fans 	
341 	Road motor vehicles, viz: 	
341.01 	passenger type (including motor cars, station wagons and panel vans) 	
341.02 	utility trucks (including jeep and land rover types) and the like 	
341.03 	motor cycles, motor scooters, trail bikes including engines, parts and accessories thereof 	
341.04 	trucks, trailers and the like 	
341.05 	omnibuses, minibuses and the like 	
341.06 	n.e.i. 	
344 	Fashioned parts and accessories for motor vehicles, n.e.i., including seat covers of all materials 	
345.02 	Tricycles and other cycles not motorised, including fashioned parts and accessories 	
347 	Road vehicles other than motor vehicles, n.e.i., and fashioned parts 	
349 	Ships and boats not exceeding 9.15 metres in length and vessels designed specifically for pleasure purposes (including hulls thereof not completely fitted out) 	
360 	Prefabricated buildings being dwellings, ware-houses and structures of similar nature and their assembled panels and parts, viz: 	
360.02 	n.e.i. including wooden 	
364 	Lamps, lanterns and torches, including lamp shades and light shades consisting of household utensils 	
365 	Lamps and lightning fixtures, n.e.i., including street lamps, street lamp posts fitted with electric parts and the like 	
366 	Furniture and fixtures, whether or not prefabricated, viz: 	
366.02 	household type, of wood or cane 	
366.03 	blinds of all kinds 	
366.04 	n.e.i. 	
370 	Mattresses, pillows and cushions, n.e.i. 	
380 	Travel goods of all materials, n.e.i., including trunks, suitcases, shopping and handbags and the like 	
381 	Bags, sporting 	
382 	Evening bags, wallets, purses, writing cases, toilet cases and the like 	
383 	Apparel and attire, n.e.i., including outer garments, underwear and night wear of all kinds 	
384 	Footwear, viz: 	
384.01 	plastic and rubber thongs 	
384.02 	other footwear and gaiters, leggings and puttees of all materials 	
391 	Binoculars, opera glasses, telescopes and the like 	
392 	Spectacles, n.e.i., including goggles, sun glasses and the like 	
393 	Projectors and cinematographs, parts and accessories therefor of all kinds including sound equipment where applicable and projection screens 	
394 	Cameras and fashioned parts thereof. Camera accessories of all kinds, including tripods, lightmeters, filters, flashlight outfits and the like and photographic material of all kinds 	
395 	Photographic and cinematographic films unexposed for use in cameras 	
396 	Chemical products for use in photography as put up for resale 	
399 	Films, n.e.i., imported for exhibition and subsequent re-export 	
400 	Chronometers, clocks and watches including pedometers, pocket counters, instrument panel clocks and the like and parts therefor 	
401 	Tape recorders and parts and accessories excluding tapes 	
402 	Sound recording tapes and wires 	
403 	Phonographs and parts and accessories, excluding records 	
404 	Pianos, parts and accessories 	
405 	Musical instruments, parts and accessories, n.e.i. 	
406 	Gramophone records, n.e.i. 	
410.02 	Printed matter, n.e.i., including postcards, wedding cards, greeting cards and the like 	
412 	Candles, tapers and the like 	
413 	Matches and vestas 	
415 	Deep freezers and refrigerators, domestic, whether paraffin, electrically or gas operated, imported assembled 	
430 	Fancy goods of all materials, including articles used for ornamental purposes or partly for use and partly for ornament 	
440 	Games, outdoor, n.e.i., and all articles used therefor, including fishing requisites and other sports goods, n.e.i. and toys and indoor games designed primarily for children 	
450 	Office supplies other than paper, including fountain pens, ball point pens, pencils, ink, nibs, crayons, pencil sharpeners and the like 	
452 	Umbrellas, parasols, walking sticks and similar articles 	
453 	Smokers' accessories (ash trays, pipes, cigarette holders and cigarette lighters, etc) 	
470 	Manufactured articles, n.e.i. 	

SCHEDULE D 
Papua New Guinea 
Tariff Item 	Description of goods 	

AGREED MINUTES
During the course of negotiations between delegations of Papua New Guinea and Australia for the Agreement on Trade and Commercial Relations between the Government of Australia and the Government of Papua New Guinea the following understandings regarding the interpretation and operation of the Agreement were reached: 
1. In view of the administrative and other difficulties in raising revenue in Papua New Guinea in its present stage of development, nothing in Article 3 shall preclude the Papua New Guinea Government from imposing, for revenue purposes, import and export taxes at rates which are not such as to be actually restrictive of commerce. The existing rates of the export taxes levied under the Customs (Export) Tariff and the import taxes levied under the Imports (General Levy) Act and any reasonable variations of those rates are not regarded as being actually restrictive of commerce. 
2. Nothing in Article 3 will preclude either Government from taking measures: 
(a) to regulate the pricing and supply of mineral and energy products exported from one Member State to the other; or 
(b) to impose export controls over primary products exported from one Member State to the other, 
provided that such measures are consistent with the other international rights and obligations of the exporting Member State. However, in cases where one Member State is dependent upon the other for the supply of essential foodstuffs, the exporting Member State will, in the imposition and administration of controls, not unduly prejudice the welfare of the inhabitants of the importing Member State. 
3. Nothing in the Agreement will preclude the Australian Government from continuing to treat sugar, golden syrup and treacle as prohibited imports into Australia. 
4. If as a result of the operation of Article 3 of the Agreement goods specified in the attachment to these Agreed Minutes are being imported into Australia from Papua New Guinea in such quantities or under such conditions as to cause or threaten serious injury to an industry producing like or directly competitive goods, the Australian Government may, as an alternative to taking action under Article 9 of the Agreement, vary Schedule A to the Agreement by the listing therein of the goods concerned, and the Papua New Guinea Government will be deemed to have consented to that variation. 
5. With regard to the provisions of Article 9, and to paragraph 4 of these Agreed Minutes, the following procedures will be applied by the Australian Government. The Australian Government will not suspend obligations pursuant to Article 9 of the Agreement, or list in Schedule A goods specified in the attachment referred to in paragraph 4 above until it has: 
(i) commissioned an official Inquiry, pursuant to the appropriate Australian legislation, into the alleged injury or threat of injury, 
(ii) notified the Government of Papua New Guinea of the terms of the Inquiry, and 
(iii) allowed a reasonable period of time having regard to the circumstances applying in each particular case, and in the case of Article 9 action, 60 days, for the Government of Papua New Guinea to make representations to the Inquiry, or to the Australian Government or to both. 
The foregoing provisions do not preclude the possibility of mutual agreement being reached by the two Governments in specific instances without official inquiry, nor will they apply where they would result in action inconsistent with Australia's other international obligations, or if a state of economic emergency exists in Australia. 
6. The phrase "multilateral international commodity agreement or arrangement" in Articles 7.2(d) and 8(h) of the Agreement includes the GATT Arrangement regarding International Trade in Textiles of 20 December 1973. 
7. It will be consistent with the Agreement for the Papua New Guinea Government to engage in, or regulate, selective purchasing of goods through an exclusive licensing scheme or similar arrangements for the purposes of obtaining advantageous terms for the long term supply of essential commodities, or rationalising the importation and use of vehicles and other equipment by standardisation, provided that the Agreement shall not be interpreted as authorising any such action which would be inconsistent with the obligations of a contracting party to the GATT. 
8. Without implying that such incentives might not be granted as a matter of discretion, nothing in the Agreement shall require either Government to provide incentives to investment through any measures involving income taxation arrangements. 
9. The provisions of Article 22 of the Agreement relating to consultation procedures apply to consultations on any problems which may arise in relation to Australian investment in Papua New Guinea 
10. 	(i) Nothing in Article 3 will preclude (a) Australia from imposing quantitative import restrictions on Schedule A goods or (b) Papua New Guinea from imposing quantitative import restrictions on Schedule C goods, provided that in each case such restrictions are consistent with the importing Member State's other international rights and obligations. 
(ii) Prior to taking action under sub-paragraph (i) of this paragraph, unless critical circumstances prevail in which delay would cause damage which would be difficult to repair, the importing Member State shall inform the other Member State of the proposed action in order to provide the other Member State with the opportunity to consult with the importing Member State under the provisions of Article 22. It is recognised that the importing Member State may find it necessary in certain circumstances to take action before any consultations under Article 22 have commenced or have been completed. 

FOR THE GOVERNMENT OF AUSTRALIA: 

[Signed:] 

JOHN HOWARD
6th November 1976
Port Moresby	FOR THE GOVERNMENT OF PAPUA NEW GUINEA:

[Signed:]

MAORI KIKI
6th November 1976
Port Moresby	
ATTACHMENT TO AGREED MINUTES 
Australian 
Tariff Item 	Brief description of goods 	
		
07.02.200 	Mushrooms 	
09.10.100 	Green ginger, not in liquid 	
09.10.200 	Ginger, dry, unground 	
09.10.300 	Ginger, dry, unground. NSA 	
12.01.100 	Peanuts 	
13.03.300 	Gingerin 	
Ex 15.07.190 	Coconut oil, palm oil, palm kernel oil 	
15.07.200 	Olive oil 	
Ex 15.07.300 	Maize, soya bean, rapeseed oils 	
15.07.900 	Other oil 	
15.08.100 	Epoxidised vegetable oil 	
15.08.200 	Linseed oil and rapeseed oil 	
15.08.300 	Safflower seed and soya bean oil not falling within 15.08.1 	
15.13.1 	Margarine and similar butter substitutes 	
15.13.9 	Other prepared edible fats 	
17.04.9 	Other sugar confectionery 	
20.01 	Vegetables and fruit prepared or preserved by vinegar 	
20.02.5 	Asparagus tips 	
20.02.6 	Vegetables, NSA 	
20.02.9 	Other prepared/preserved vegetables 	
20.05 	Jams, jellies, etc 	
20.07.200 	Citrus fruit juices, NSA - not including lime juice 	
20.07.400} 	Fruit juices, NSA 	
20.07.500} 		
21.07.900 	Food preparations, NSA 	
24.02.400 	Tobacco, manufactured 	
27.09.900 	Petroleum oils, etc 	
27.10.900 	Phosphoric acid 	
28.17.100 	Sodium hydroxide 	
28.56.100 	Calcium carbide 	
29.14.300 	Vinyl acetate 	
38.11.200 	Insecticides, etc 	
38.11.400 	Disinfectants, insecticides, etc 	
39.01.110 	Adhesives 	
39.01.120 	Condensation, etc products 	
39.01.131 	Silicone grease 	
39.01.132 	Silicone fluids 	
39.01.139 	Other silicone goods 	
39.01.140 	Unsaturated polyester type 	
39.01.151 	Polymers of ethylene 	
39.01.152 	Polyols, etc 	
39.01.210 	Laminated sheets 	
39.01.311} 		
39.01.319} 	Coated planar forms 	
39.01.320} 		
39.01.410 	Silicone planar forms, etc 	
39.01.490 	Profile shapes 	
39.01.500 	Polyester planar forms 	
39.01.600 	Profile shapes, polyamide, etc 	
39.01.700 	Planar forms, polyurethane 	
39.02.100 	Adhesives 	
39.02.120 	Polyethylene goods 	
39.02.130 	Other polymerisation, etc. goods 	
39.02.140 	Acrylics 	
39.02.160 	Polypropylene goods 	
39.02.210 	Floor and wall coverings 	
38.02.311} 		
39.02.319} 	Supported sheet 	
39.02.320} 		
39.02.400 	Planar forms - vinyl 	
39.02.520 	Planar forms 	
39.02.610 	Planar forms - ethylene 	
39.02.690 	Other 	
39.02.710 	Styrene - planar forms 	
39.02.720 	Styrene - profile shapes 	
39.02.800 	Acrylic - planar forms and profile shapes 	
39.03.110 	Cellulose, etc - adhesives 	
39.03.120 	Cellulose moulding compounds 	
39.03.140 	Cellulose nitrate goods 	
39.03.160 	Hydroxyethyl - cellulose goods 	
39.03.210 	Laminated sheets 	
39.03.311} 		
39.03.319} 	Coated forms 	
39.03.320} 		
39.03.400 	Profile shapes 	
39.03.500 	Planar forms 	
	Natural resins, etc 	
39.05.100 	Adhesives 	
39.05.200 	Ester gums 	
	Other high polymers, etc 	
39.06.100 	Starches 	
39.06.200 	Alginic acid, etc 	
	Goods of plastic, etc 	
39.07.190 	Goods as prescribed 	
39.07.210 	Bags 	
39.07.290 	Floor coverings, wall tiles 	
39.07.310 	Other 	
40.02.400 	Synthetic rubber 	
40.05.400 	Goods of synthetic rubber 	
40.06.700 	Goods and articles of synthetic rubber NSA 	
40.11.200} 	Motor vehicles tyres 	
40.11.900} 		
42.03.300 	Leather coats, jackets, overcoats 	
48.01.910 	Paper, etc - tissues 	
48.01.921} 	Paper, etc - substance 22 to 205 gsm 	
48.01.929} 		
48.04.900 	Other paper 	
48.05.900 	Other wrapping 	
48.07.620 	Paper and paper-board 	
48.07.630 	Wrapping paper NEI 	
48.07.690 	Pressure-sensitive paper 	
48.07.720 	Wrapping paper 	
Chapter 49 	Products of the printing industry 	
50.09.100 	Silk fabric containing not less than 20 per cent by weight of wool 	
50.09.200 	Printed silk fabrics 	
50.10.100 	Printed noil silk fabrics 	
53.06 	Woollen yarn 	
53.07 	Worsted yarn 	
53.11 	Woven fabrics of sheep's or lambs' wool 	
55.06 	Mercerised cotton yarn for retain sale 	
59.02 	Felt and articles of felt 	
59.06 	Boot laces, pyjama girdling, etc 	
61.05 	Handkerchiefs 	
62.01 	Travelling rugs and blankets 	
62.04 	Tarpaulins, sails, tents, etc 	
65.02} 		
65.03} 	Hats and headgear 	
65.04} 		
66.01 	Umbrellas 	
69.07.900 	Floor and wall tiles 	
69.08.900 	Floor and wall tiles 	
73.24.910 	Containers for compressed or liquefied gas 	
74.01.100 	Unalloyed copper; matte 	
74.03.200} 		
74.04.900} 		
74.05.900} 		
74.05.100} 		
74.07.900} 		
74.08.000} 		
74.09.000} 	Copper and copper based products 	
74.10.900} 		
74.12.000} 		
74.14.000} 		
74.15.000} 		
74.16.000} 		
74.18.100} 		
74.18.200} 		
75.01 	Nickel, unwrought 	
Chapter 76 	Aluminium and articles thereof 	
84.06.2 	Engines for use as original equipment components in the assembly or manufacture of vehicles 	
84.11.200} 		
84.11.310} 	Compressors for refrigerators 	
84.11.390} 		
84.12.000 	Air conditioners 	
84.15.100 	Refrigerating equipment 	
84.15.2 	Refrigerators and freezers 	
84.15.900 	Refrigerating equipment and parts 	
84.40.211} 		
84.40.219} 		
84.40.221} 	Laundry machines 	
84.40.229} 		
84.40.290} 		
84.62 	Ball roller or needle roller bearings 	
84.63 	Transmission shaft, cranks, bearing housings, etc 	
84.64 	Gaskets 	
85.01.110 	Electric motors and generators 	
85.01.120 	Electric motors and generators 	
85.01.130} 	Electric motors 	
85.01.140} 		
85.01.150} 	Electric generators 	
85.01.190} 		
85.01.310 	Rectifying assemblies 	
85.03.900 	Batteries 	
85.06.900 	Domestic electrical appliances 	
85.08 	Electrical starting and ignition equipment 	
85.09 	Electrical lighting and signalling equipment for motor vehicles 	
85.15 	Radios, televisions and parts 	
85.18 	Capacitors 	
85.19.200} 	Relays, etc 	
85.19.300} 		
85.19.440 	Switchgear 	
85.19.450 	Electrical jacks 	
85.19.460 	Valve sockets 	
85.19.470 	Electric apparatus as specified 	
85.19.490 	Fuses, nei connectors, etc 	
85.19.500 	Resistors 	
85.19.600 	Resistors and printed circuits 	
85.19.900 	Resistors, motor starters, etc. nei 	
85.21.100 	Cathode ray tubes 	
85.21.900 	Cathode ray rubes and other parts 	
85.23.920 	Telephone cable 	
87.02.110 	Assembled passenger vehicles 	
87.02.120 	Unassembled passenger vehicles 	
87.02.210 	Assembled cars and station wagons 	
87.02.220} 		
87.02.231} 	Unassembled cars and station wagons 	
87.02.239} 		
87.02.310 	Unassembled vehicles 	
87.04.110} 	Chassis for motor vehicles 	
87.04.190} 		
87.05.210} 	Bodies for motor vehicles 	
87.05.290} 		
87.06.510} 	Original equipment components 	
87.06.590} 		
87.06.900 	Components - original equipment and other 	
89.01.900 	Vessels under 150 tons gross register 	
89.02.900 	Vessels not exceeding 150 tons gross register especially designed for towing (including tugs) or pushing other vessels 	
89.03.900 	Floating dredges, cranes, etc. not exceeding 150 tons gross register 	
89.05.000 	Other floating structures - other than vessels 	
90.09.100 	Slide projectors 	
93.07.100 	Sporting ammunition 	

[Letter from the Minister for Business and Consumer Affairs of Australia to the Minister for Foreign Affairs and Trade of Papua New Guinea] 
I
Minister for Business and Consumer Affairs
Parliament House
Canberra 2600

6 November 1976 
Sir Maori Kiki, KBE, MP
Minister for Foreign Affairs and Trade
House of Parliament
Port Moresby
PAPUA NEW GUINEA
My dear Minister 
I refer to recent discussions between our two Governments on the operation of the new 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 signed today. 
With respect to these new rules, I wish to inform you that the Government of Australia envisages the new origin rules as working in basically the same way as the present rules. This is so because the underlying concept, that of the value of country content as a proportion of factory cost, is the same for both sets of rules. 
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 given a precise meaning under Ministerial determinations in respect of factory or works costs (attached Appendix A) and value of labour and materials attached Appendix B). 
In the great 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; in the United Kingdom and Canada, for example, Australian Customs representatives regularly interview manufacturers and examine costing details. 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 the new rules to treat particular goods or classes of goods as originating in a Member State introduces a desirable flexibility. It allows 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. 
It also allows the present wholly manufactured concept to be dispensed with (ie. the concept that all processes must be performed in the country). Most, if not all, goods manufactured in the Area would probably meet the one-half country content rule if they initially met the wholly manufactured rule. If the one-half rule was not met, but it was considered desirable that preferential treatment be given, the Member States could decide to allow such treatment. 
I suggest that a manufacturer in a Member State who wishes to have his goods treated pursuant to paragraph 2 of Article 4 as originating in that Member State should put his case to the appropriate authority in his country. If no reason existed to do otherwise, a request would be cleared and advice of the clearance sent to the appropriate authority in the other Member State with a request for a clearance from that Member State. An exchange of clearances would constitute agreement under the provisions of the new rules. In Australia such agreements would be formalised by Ministerial determination and details would be notified in the Australian Government Gazette. 
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, with the exception of 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:]
JOHN HOWARD 

APPENDIX A
FACTORY OR WORKS COST 
The factory or works cost of goods shall be determined by taking the sum of the following: 
(a) the cost of materials as 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;
(c) factory overhead expenses; and
(d) inside containers.

APPENDIX B
VALUE OF LABOUR AND MATERIALS 
The value of labour and materials shall be determined by taking 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 - the cost of those materials but not including any duties or other taxes paid or payable in the country of manufacture of the goods in respect of such materials. 
(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; 
(c) factory overhead expenses; and 
(d) inside containers of the manufacture of the country or of Australia. 

[Letter from the Minister for Foreign Affairs and Trade of Papua New Guinea to the Minister for Business and Consumer Affairs of Australia] 
II 
Minister for Foreign Affairs and Trade
Papua New Guinea
Central Government Offices
Waigani 

6 November 1976 
The Hon J W Howard MP
Minister for Business and Consumer Affairs
Parliament House
CANBERRA ACT 2600

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 Australia and the Government of Papua New Guinea signed today. 
The text of that letter reads as follows: 
[Here follows text as printed under I.] 
I wish to confirm that the Government of Papua New Guinea shares the understandings 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:] 
MAORI KIKI 

[Letter from the Minister for Business and Consumer Affairs of Australia to the Minister for Foreign Affairs and Trade of Papua New Guinea]
III
Minister for Business and Consumer Affairs
Parliament House
Canberra 2600 
6 November 1976 
Sir Maori Kiki, KBE, MP
Minister for Foreign Affairs and Trade
House of Parliament
Port Moresby
PAPUA NEW GUINEA
My dear Minister 
With regard to the co-operation that is envisaged in the Agreement on Trade and Commercial Relations between the Government of Australia and the Government of Papua New Guinea signed today, I wish to place on record the understandings of the Government of Australia that: 
(1) where practicable, Australia will keep Papua New Guinea informed of issues arising, and supply documentation, from international meetings at which Papua New Guinea is not represented; 
(2) Australia will assist with Papua New Guinea representation at international meetings by way of secondment of officers from Australia, where appropriate and feasible; and 
(3) Australia, at the request of Papua New Guinea, will: 
(a) provide appropriate information, documentation and advice on matters concerning Papua New Guinea's trade interests; 
(b) make available to Papua New Guinea through its Department of Foreign Affairs and Trade the facilities of the Australian Trade Commissioner Service for a period to be determined by mutual consent; and 
(c) provide training for Papua New Guinea officials in trade policy and promotion. 
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:]
JOHN HOWARD

[Letter from the Minister for Foreign Affairs and Trade of Papua New Guinea to the Minister for Business and Consumer Affairs of Australia]
IV
Minister for Foreign Affairs and Trade
Papua New Guinea
Central Government Offices
Waigani 
6 November 1976 
The Hon J W Howard MP
Minister for Business and Consumer Affairs
Parliament House
CANBERRA ACT 2600 
My dear Minister 
I acknowledge receipt of your letter of today's date on certain forms of co-operation between our two Governments. 
The text of that letter reads as follows: 
[Here follows text as printed under III.] 
I wish to confirm that the Government of Papua New Guinea shares the understandings 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:]
MAORI KIKI

[Letter from the Minister for Business and Consumer Affairs of Australia to the Minister for Foreign Affairs and Trade of Papua New Guinea] 
V
Minister for Business and Consumer Affairs
Parliament House
Canberra 2600
6 November 1976 
Sir Maori Kiki, KBE, MP
Minister for Foreign Affairs and Trade
House of Parliament
Port Moresby
PAPUA NEW GUINEA
My dear Minister 
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 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) provide investment insurance cover through the Australian Export Finance Insurance Corporation; 
(2) disseminate information to potential Australian investors concerning investment opportunities in Papua New Guinea; 
(3) assist investors through facilities of the Trade Commissioner Service. 
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:] 
JOHN HOWARD 

[Letter from the Minister for Foreign Affairs and Trade of Papua New Guinea to the Minister for Business and Consumer Affairs of Australia.] 
VI
Minister for Foreign Affairs and Trade
Papua New Guinea
Central Government Offices
Waigani 
6 November 1976 
The Hon J W Howard MP
Minister for Business and Consumer Affairs
Parliament House
CANBERRA ACT 2600 
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 Australia and the Government of Papua New Guinea signed today. 
The text of that letter reads as follows: 
[Here follows text as printed under V.] 
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:] 
MAORI KIKI 

[Letter from the Minister for Foreign Affairs and Trade of Papua New Guinea to the Minister for Business and Consumer Affairs of Australia] 

VII
Minister for Foreign Affairs and Trade
Papua New Guinea
Central Government Offices
Waigani
6 November 1976
The Hon J W Howard MP
Minister for Business and Consumer Affairs
Parliament House
CANBERRA

My dear Minister 
I wish to place on record the understanding of the Government of Papua New Guinea with regard to paragraph 4 of Article 14 of the Agreement on Trade and Commercial Relations between the Government of Australia and the Government of Papua New Guinea signed today. 
It is the understanding of the Government of Papua New Guinea that the assurance given in that paragraph will be interpreted in the light of the approved policies of the Government on foreign investment, the relevant elements of which are: 
(1) Papua New Guinea, as part of its development strategy, proposes to treat each investment proposal on its merits, within the context of the overall development strategy and policy guidelines. The evaluation of proposals on a case-by-case basis is necessary, even for projects in the same business activity, as they may differ in such respects as size, employment, local content or location. This is particularly important where it may be necessary to limit the number of projects because of, say, market size. 
(2) the terms and conditions, of any incentives attached to a project, may vary from that of another project in the same business activity because of the above factors. More favourable treatment, possibly in the form of incentives, may be offered to a project on the basis of some established need, such as decentralization. Such differentiation is on the basis of the characteristics of the project itself, rather than on any element of nationality. 
(3) Also, where new investment in a specific industry is being promoted alongside existing investments in the same industry, it may be determined that additional benefits should be offered to encourage new investment. The same benefits would not be offered to the existing enterprise, although the owners of the existing enterprise would not necessarily be barred from competing for the right to participate in the new project and to enjoy the special benefits being offered in respect of that new project. In offering such incentives Papua New Guinea would be mindful of the desirability of avoiding serious damage to existing industries. 
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:] 
MAORI KIKI 

[Letter from the Minister for Business and Consumer Affairs of Australia to the Minister for Foreign Affairs and Trade of Papua New Guinea] 
VIII
Minister for Business and Consumer Affairs
Parliament House
Canberra 2600

6 November 1976

Sir Maori Kiki, KBE, MP
Minister for Foreign Affairs and Trade
House of Parliament
Port Moresby
PAPUA NEW GUINEA
My dear Minister 
I acknowledge receipt of your letter of today's date regarding the interpretation of paragraph 4 of Article 14 of the Agreement on Trade and Commercial Relations between the Government of Australia and the Government of Papua New Guinea signed today. 
The text of that letter reads as follows: 
[Here follows text as printed under VII.] 
I wish to confirm that the Government of Australia shares the understandings 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:] 
JOHN HOWARD

[1] Notes to this effect were exchanged 21 January-1 February 1977. The Agreement entered into force on 1 February 1977.