Today, Australia signed a landmark Free Trade Agreement with China, our largest trading partner, with total trade worth almost $160 billion in 2013-14, and a growing source of investment.
The China-Australia Free Trade Agreement (ChAFTA) will lock in existing trade and provide the catalyst for future growth across a range of areas including goods, services and investment.
The Agreement secures better market access for Australia to the world’s second largest economy, improves our competitive position in a rapidly growing market, promotes increased two-way investment and reduces import costs. It is a win for households and businesses alike.
On day one of the ChAFTA, more than 85 per cent of Australian goods exports will be tariff free, rising to 95 per cent on full implementation.
Australia’s agriculture sector will be able to capitalise on its well-deserved reputation as a clean, green producer of premium food and beverage products. Tariffs will be progressively abolished for Australia’s $13 billion dairy industry. Australia’s beef and sheep farmers will also gain from the phased abolition of tariffs ranging from 12-25 per cent and all tariffs on Australian horticulture will be eliminated.
Tariffs will be removed on almost all Australian resources and energy products, including the 8 per cent tariff on aluminium oxide on the first day of the Agreement, benefitting our exports worth around $1.3 billion a year. The tariffs on coking coal will be removed on day one, with the tariff on thermal coal being phased out over two years.
Tariffs will be also eliminated on a wide range of Australian manufactured goods, including pharmaceutical products and car engines.
ChAFTA completes a historic trifecta of trade agreements with our top three export markets, accounting for more than 55 per cent of our total goods and services exports. Together, these agreements will enhance our vital trade and investment relationships in the region, assist the process of reform, and foster greater prosperity.
Our FTAs with Korea and Japan are only months old and we are already seeing increased exports compared to a year ago – like a 26 per cent increase in frozen beef prime cuts to Korea and a massive 84 per cent increase in the same product to Japan. Macadamia exports to Korea have more than doubled, and Japan is importing 82 per cent more of our rolled or flaked oats. Increases have also been seen in wine, lamb, horticulture and many other products, and we look forward to further positive outcomes once ChAFTA comes into force.
Today’s signing by Minister for Trade and Investment Andrew Robb and his counterpart, Chinese Commerce Minister Gao Hucheng, is yet further proof that Australia is open for business, and is a testament to the strength of the Australia-China relationship.
The Agreement will enter into force after the completion of domestic legal and parliamentary processes in China and Australia, including review by the Australian Parliament’s Joint Standing Committee on Treaties, and the Senate Foreign Affairs, Defence and Trade References Committee. Both countries are working to complete these steps and bring the Agreement into force as soon as possible.
The full text of the Agreement is now publicly available online at: dfat.gov.au/chafta, along with materials to assist in understanding the Agreement.
17 June 2015