Tariff & Non-Tariff Barriers to Trade

Every product in the world that is either exported or imported is allocated what is known as a Harmonized System (HS) Code. This is a 6 digit code that allows for companies and governments to understand the precise conditions under which a product can be transported and taxed.

hs-code-example

You can find out more information on HS Codes here.

Interesting Note: Humans beings are the only things in the world that do not have an associated HS Code. Instead, all humans whether alive or deceased will always travel on a passport.

For the most part, the Australian and NZ governments support free trade and generally oppose protectionism, hence their low tariff rates (mostly between zero and 10%) and high import quotas for products.

For Australian specific import tariffs click here

For New Zealand specific import tariffs click here

The World Bank ranked New Zealand 1st and Australia 13th out of 189 countries in 2016 for ease of doing business. This index takes into account the time and cost associated with importing cargo into a country and provides a good indicator of the level of difficulty that may be faced to gain entry to a new market.

In addition to import tariffs, other non-tariff barriers can also pose obstacles to importing and exporting products.

Examples of non-tarriers in Australia and NZ include:

Strict & Complex Regulations:

Stringent Australian & NZ Specific Import, Sanitation, Biosecurity, Food Safety, Product Testing & Labelling Requirements; Costly & Bureaucratic Licences, Permits & Registrations (i.e. TGA); Laws Governing Data Retention & Cloud Computing; Decentralised State Regulations (i.e. Tenders, Taxes); etc.

Restrictions on the flow of Financial, Intellectual & Human Capital:

Limited sources of local investment, funding and financial capital; Restricted flow of skilled human capital due strict Visa Restrictions ; Threat of common law precedents over trade marks, designs, patents & copyright; High labour costs & higher company taxes (AU 30%; NZ 28%)

To surmount many of these barriers it is advisable for companies to work closely with local experts who can best help them to navigate the intricacies of both markets.