ODMA Made Aware of Further Planned Tariff Pain for Frame Distributors

The Optical Distributors and Manufacturers Association (ODMA) advises that in Gazette No TC 23/18 on 24 May, the Intention to revoke tariff concession order TC 0315708, which covers metal spectacle frames has been published.

ODMA CEO Amanda Trotman stated, “whilst this news is not entirely unexpected it is very frustrating and I feel for frames suppliers that are already facing many rising costs.” Amanda explained that the reason this announcement was not unexpected is given The Customs Delegate took a very broad view on what constituted producing substitutable goods when the decision was made to revoke the concession on plastic frames in 2022.

ODMA is still waiting on an update from the Minister of Home Affairs Office despite multiple requests. ODMA were advised that the Department has requested that Border Force explain further the decision they made in 2022 beyond their appeal response and that an update would then be provided.

“We have been keeping ODMA members updated on the matter and encouraged members to themselves write to the Ministers office. As recent as last week another letter was sent to the Minister of Home Affairs instigated by an ODMA member via a Federal Member of Parliament”, Amanda said.

ODMA advised that they will be now looking to appeal this latest intention by the stated deadline of 21 June and that ODMA will seek further regulatory advice on other avenues to pursue. Amanda stated, “one further avenue to pursue of course is a broader consumer focused media campaign on the situation given costs often have to be passed on to those selling the eyewear and they often need to pass that increase on to the consumer as there are just so many pressures on costs for every business currently”.

ODMA advises that their work with on the EU Free Trade Agreement continues to help ensure that this agreement will nullify any tariffs imposed by Border Force.

Amanda stated that there is some progress on this front given comments made regarding the EU FTA by our Prime Minister last week when he was in the UK recently. Basically, Mr Albanese said that now that the UK trade deal has been finished, he was turning to discussions with European leaders to drive a free trade deal with the European Union. The PM said he was meeting with EU commission president Ursula Von der Leyen in May and has also invited European leaders to Australia for further discussions. Mr Albanese commented on wanting the EU free trade agreement to come into effect as soon as possible.

ODMA remains in communication with the Department of Foreign Affairs and Trade (DFAT). ODMA has also updated it’s members via bulletins on the EU FTA progress and publicised that there is a way for anyone to be involved directly via the call for input through the EUs ‘have your say’ webpage. Whilst ODMA will review the draft agreement once it is made available for comment, Amanda stated that, “we have encouraged industry to also have their say and provided content that can be used to assist those wanting to have a say and to highlight points such as you operate a business that’s impacted by the TCO decision, that the long-term fix for this is through the ratification of a suitable

FTA with the European Union and that you urge DFAT to ensure this problem is rectified as part of its negotiations with the EU.

ODMA is concerned that these revocation decisions create significant additional red tape and uncertainly for our members who are now faced with further administrative burdens when determining which products and countries the tariff applies to. It is ODMA’s view that the reimposition of these tariffs does little to nothing to assist Australian industry and is to the detriment of Australian consumers.

Background

Our primary interest regarding a potential EU-FTA concerns the 5 per cent tariff that Australia applies to imports of multiple categories of frames and mountings for spectacles, and complete spectacles such as sunglasses. The vast majority of optical frames sold in Australia are imported, with most of these from the EU. The key tariffs with the potential to affect ODMA members have, until recently, been covered by various Tariff Concession Orders (TCOs). These TCOs have been in place for decades, given Australia’s essentially non-existent domestic manufacturing capabilities in our sector. Unfortunately, on 7 July 2022 the Australian Border Force (ABF) made a decision to revoke the TCO for plastic spectacle frames (the Plastic Frames TCO) that has been in place since 2003, with retrospective effect from 13 May 2022. This decision was made following an application from one small Australian eyewear manufacturer operating from regional New South Wales. We understand the production capacity of this manufacturer to be in the low thousands. The effect of revoking the TCO means the $4 billion optical dispensing and eyewear industry, which we estimate sells more than 5 million frames each year, is now faced with a 5 per cent tariff on millions of frames imported annually. This decision has, after decades of nil tariffs for the industry, increased costs for retailers and consumers, exacerbating the cost of living pressures on the millions of Australians who use optical products, as well as putting upward pressure on inflation.

Enquiries – Amanda Trotman amanda@odma.com.au 0427 353 564