China, Australia conclude FTA talks, pledge zero tariffs
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China and Australia on Monday signed a declaration of intent on practically concluding bilateral negotiations on a free trade agreement (FTA).According to the results of the nine-year-long talks, Australia will eventually remove tariffs on all goods imported from China, and a vast majority of Australian products will enter China tariff-free.
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China, Australia conclude FTA talks, pledge zero tariffs. As regards investment, the pair agreed to grant each other the most favored nation status once the FTA takes effect. They will greatly lower the review thresholds for corporate investment, and increase market access opportunities, predictability and transparency for such investment.
The two sides also committed themselves to opening up numerous service sectors to each other with high quality.The China-Australia FTA will be another comprehensive, high-level free trade deal China has finalized with a major economy in the Asia-Pacific region. A week ago, Beijing and Seoul announced the conclusion of their substantive FTA talks.
Visiting Chinese President Xi Jinping and Australian Prime Minister Tony Abbott witnessed the signing of the declaration of intent by Chinese Commerce Minister Gao Hucheng and Australian Minister for Trade and Investment Andrew Robb.The China-Australia FTA will cover more than 10 areas, including trade in goods and services, investment and trade rules, as well as such subjects as e-commerce and government procurement.According to the Chinese Ministry of Commerce, the China-Australia FTA talks have realized the goal of comprehensiveness, high quality and balance of interests.
The signing of the FTA will complement each other's economic advantages, boost win-win cooperation, bring mutual benefits and promote the in-depth development of bilateral economic and trade ties, said the ministry.Australia is attempting to transition from a reliance on exports of minerals such as coal and iron ore to expanding its food and agricultural exports to a growing Asian middle class, moving from a "mining boom" to a "dining boom".
Paul Glasson, the National vice President of the Australia China Business Council, hailed the much-improved access for up to 40 service industries including health, law and aged care, as well as for agricultural products such as dairy, rice, wheat, wool and cotton."Up to 95 percent of our exports over time will enter the Chinese market tariff free," parliamentary secretary Josh Frydenberg said in a television interview on Sunday.
The agreement will give Australian dairy farmers tariff-free access within four years to China's infant formula market, minus any of the "safeguard" caps that currently restrict competitors from New Zealand, the Sydney Morning Herald reported, citing sources.
"Australia has been marginalized from being a major exporter to China in the last few years, one of the reasons being that milk production (there) has been going down over the last decade," said Sandy Chen, dairy analyst at Rabobank in China.Wine makers, currently selling more than A$200 million worth of goods to China each year despite tariffs of between 14 and 30 percent, will also see tariffs eliminated over four years, it reported.
Tariffs on horticultural products, seafood and other goods accounting for 93 percent of Australian exports by value will also be reduced to zero by 2019, according to the newspaper.The Minerals Council of Australia said it understood that the agreement would eliminate a 3 percent coking coal tariff immediately and a 6 percent tariff on thermal coal within two years.
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