This evening I met the Chinese Premier, Mr Wen Jiabao, in Beijing. Premier Wen and I have considered the outcome of the joint feasibility study and have agreed to commence negotiations on an Australia-China Free Trade Agreement.
I was pleased to witness tonight the signing of the Statement of Intent by Australia's Ambassador to China, Dr Alan Thomas, and the Chinese Minister of Commerce, Mr Bo Xilai, agreeing to initiate negotiations as soon as practicable.
Negotiations for a comprehensive free trade agreement will be on the basis of principles agreed in the joint feasibility study. Accordingly, the two sides will negotiate as equal WTO trading partners. Australia will recognise market economy status for China for WTO purposes, and the two countries will seek an FTA consistent with WTO rules. Negotiations will include products across all sectors, will involve liberalisation of goods and services and will address the issue of investment flows with a view to achieving an outcome of benefit to both countries through a single undertaking.
An FTA would build on the already substantial trade and economic relationship between the two countries. China is Australia's third largest trading partner with two-way goods and services trade valued at over $30 billion in 2004. An FTA is a desirable next step in this already very substantial trading relationship. We should not underestimate the complexity of the negotiating process to come.